Case Study #9: Grad student - Spidell

Case Study #9: Grad student

LuAnn is single and was a fulltime grad student in 2018 and 2019; she doesn’t have any dependents and had no earned income, and as such, she did not file a return for either 2018 or 2019.

If LuAnn doesn’t file those returns, she will not receive an economic impact payment. But if she files a 2020 return in 2021, she’ll get a credit against her 2020 tax liability. Or, if she files a 2019 return with zero tax liability, she should receive the payment in 2019.

Unanswered question: Again, we don’t know how long the IRS will make payments to taxpayers who file 2019 returns. However, we believe they will make payments up until December 31, 2020.

Practice Pointer

The IRS has provided information to tax software providers as to how to process and e-file these zero returns. So keep your software updated. Or, taxpayers can go online to enter payment info at:

Subscribers to Spidell’s Federal Taxletter or Spidell’s Online Research Package can read the full article here >>