Coronavirus: Is your stimulus check taxable, and other financial questions, answered

With so many facing economic uncertainty, we asked a certified public accountant for advice on what you should know about your stimulus check and other pressing financial issues.
LOS ANGELES (KABC) -- There are still questions about stimulus checks as many still haven't received them and others are wondering if they will be taxed on them.

Certified public accountant Wendy Barlin joined Eyewitness News to answer some of your financial questions during the pandemic.

1. Is your check taxable or reportable as income to the Internal Revenue Service?

"The stimulus package you receive, that is not taxable, but your unemployment insurance, even the $600 piece from the federal government, that is at this time going to be taxable on your 2020 income," Barlin explained. "I think it's really important to understand the distinction."

Less than half of eligible Californians have received their stimulus checks, IRS data shows
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Nine million stimulus checks have been sent out to Californians as of April 17, according to federal data. Officials say it could take up 20 weeks for all the checks to be mailed out.

2. What will happen to credit ratings if someone defaults or doesn't pay their mortgage for a month or longer? Will that have a negative effect on their credit rating?

"It's very important to call your mortgage company or your landlord and let them know that you'd like to wait a month or two or three to make that payment," Barlin said. "Then they will not hit your credit."

Barlin added if you do nothing and lay low, you may get dinged on your credit.

"We have been assured by the mortgage lenders and the banks that they will not ding people's credit during this time as long as we let them know that we're not able to make that payment," she said.

Stimulus checks: Americans without bank accounts must wait for federal relief
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More than half the states in the country move ahead with plans to reopen this week, but some are having second thoughts.

3. Are accountants anticipating a wave of people trying to file their taxes if they haven't yet?

Barlin said most of her work right now is helping people figure out the best path forward with the money they do have.

"Tax filings themselves seems to have taken a backseat to the anxiety of this time," she said.

4. What's the one piece of advice you would give to people that might be struggling right now?

"Even though your unemployment insurance is taxable, at this point, I really want you to use it to pay for groceries, pay for your medications and we will figure out the taxes down the road," Barlin said.
"So much is going to change with the IRS over the next three, six and nine months, that taxable piece - fingers crossed - may change in the future. For now, use every penny to take care of yourself."

Barlin also says to take it one day at a time and do the best you can.
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