Is my stimulus check taxable income?
No. When you win the lottery or collect certain legal settlements for example, the IRS will factor those income sources into what you’ve made during the year, and that can bump you to a higher tax bracket with a higher tax rate. But that won’t happen here.
“The payment is not income and you will not owe tax on your payment,” the IRS said, adding that the money also “will not affect your income for purposes of determining eligibility for federal government assistance or benefit programs.”
There are also rules on the stimulus money when it comes to bankruptcy, a legal process where indebted consumers pay back their creditors. Judges will not consider the money as income when people apply for a common form of bankruptcy. And if someone’s in a bankruptcy case’s repayment plan, the stimulus check doesn’t count as “disposable income” that could be applied to things like credit card debt.