Stimulus Payments

What's the deal with the stimulus payments? There has been much confusion around the three Economic Impact (stimulus) Payments issued to most Americans over the last 12 months or so. Technically the first two payments are an advance on a refundable credit to be reported on your 2020 tax return and the third payment is an advance on a refundable credit to be reported on your 2021 tax return. So, although they are not taxable income, you will need to know the amount of payment you received so that you can claim any additional credit you might be entitled to when you file your next tax return. Also, even though most people received the second stimulus in January of 2021, it still goes on the 2020 return so that any additional credit you're entitled to will be added to your 2020 refund rather than having to wait for your 2021 refund. Also, if you got more stimulus than you ended up being entitled to (for example if your income increased above the limits in 2020), you don't have to pay the difference back.