Client didn't receive 1st stimulus payment because of large capitol gains on 2019 tax return. My understanding is 1st stimulus is refund of 2020 tax. If when I file 2020 return and income is much lower, would this make client eligible for 1st stimulus payment?
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Yes. The stimulus payment was an advance payment of individuals' 2020 credit. The credit is refundable, so they will get it even if they owe no taxes. Back in the 80's we had a similar advance payment. On the next year's tax return, there was a box to check if taxpayer claims they did not get their advance payment and this triggered the additional credit calculation on the 1040.