The IRS and Treasury Department issued more than $250 billion in stimulus payments to Americans at the start of the Covid-19 shutdown.
The checks were meant to give immediate relief directly to people and help boost the economy in the process, but the finer details of the program may be lost on some who received the payments.
One example is that the payments are technically considered a tax credit, but they will not affect your future tax returns, according to Garrett Watson, a senior policy analyst at the Tax Foundation. Some people were under the impression the checks were part of their tax refund.
More from Invest in You:
Quarantine spending was more than just hoarding canned goods
Prices go up every year. That doesn’t mean you have to pay more
If you need cash, try these less-obvious sources
The technicality helps the IRS and the Treasury Department issue payments with an existing system and calling the checks a credit streamlined the process, Watson said.
Check out this video to learn more about how the stimulus checks work and to see what we know about eligibility requirements for the potential second round of payments being debated in Congress.
SIGN UP: Money 101 is an 8-week learning course to financial freedom, delivered weekly to your inbox.
CHECK OUT: ‘Shark Tank’ winning CEO recommends 3 high-paying side hustles you can do from home via Grow with Acorns+CNBC.
Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.
