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10 Myths About Stimulus Checks

What to believe — and not to believe — about the coronavirus relief payments

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| A number of misconceptions are flying around about the three rounds of stimulus checks called for by the CARES Act, the Consolidated Appropriations Act and the American Rescue Plan Act, which together have given a maximum $3,200 per person. Here's a closer look at several of these erroneous claims surrounding what the Internal Revenue Service (IRS) refers to as economic impact payments. Consider yourself warned.

1. Donald Trump signed the stimulus checks

Millions of paper stimulus checks issued by mail in the first two rounds of stimulus do bear the ex-president’s name but not his signature. The checks were actually signed by Vona Robinson, an official with the Treasury Department’s Bureau of the Fiscal Service. The president’s name does, however, appear in all caps on the face of the first two stimulus checks, next to the image of the Statue of Liberty. If you receive a stimulus check with Donald Trump’s signature, it’s a fake. The third stimulus check does not display the name of Trump’s successor, President Joe Biden.

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2. You had to file a tax return to get a stimulus payment

Absolutely not. The IRS used the most recent tax return you filed to determine your eligibility to receive a stimulus check. But the IRS also went to great lengths to ensure that those not required to file tax returns also got their checks. At the urging of AARP, the IRS worked closely with the Social Security Administration (SSA) and the Department of Veterans Affairs (VA) to make sure that non-filers who received benefits from SSA — including benefits for survivors, the disabled (SSDI) and Supplemental Security Income (SSI) recipients — or the VA got a check. It also rolled out a tool on called, logically, “Non-Filers: Enter Payment Info Here.” The tool is not active for the third stimulus check.

3. You owe income tax on your stimulus payment

Nope. To quote the IRS coronavirus economic impact information center: “No, the payment is not income and taxpayers will not owe tax on it. The payment will not reduce a taxpayer's refund or increase the amount they owe when they file their 2020 tax return next year. A payment also will not affect income for purposes of determining eligibility for federal government assistance or benefit programs.”

4. College students aren't eligible for stimulus payments

For the first two rounds of stimulus checks, as long as you were 17 or older and weren’t claimed as a dependent on someone else’s tax return, you were eligible for a stimulus check. Whether or not you were in school didn’t matter. You also had to meet the income requirements. To receive a full stimulus payment, your adjusted gross income (AGI) had to be at or below $75,000 for individuals and $150,000 for married couples filing joint returns.

Most college students didn’t have to worry about this. What they did have to worry about is being claimed as a dependent by their parents. That negated their eligibility to receive a first or second stimulus check. The third stimulus payment removed the age restriction, so if your parents claim you as a dependent and you’re 20 years old, they could get extra stimulus money because of you. It’s up to your parents whether they choose to give you the $1,400 they received on your behalf. The same applies to elderly dependents – the $1,400 goes to the person who claimed the elderly dependent, not directly to the dependent.

5. It's too late to get a stimulus check

The IRS has already pushed out millions of stimulus payments, either by paper check, direct deposit or prepaid debit card. Nevertheless, some people who were entitled to a stimulus payment haven't gotten one, possibly because their income was too low for them to file taxes. If you didn't receive a payment last year, or your payment is in the wrong amount, you can claim the missing money when you file a tax return for tax year 2020.

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6. Millionaires qualified for stimulus payments

This one is tricky. Anyone with an annual income of $1 million certainly did not get a stimulus payment. Far from it. Eligibility for the first two stimulus payments phased out once AGI hit $99,000 for individuals and $198,000 for couples filing jointly. Congress reduced the upper limit on the third check to $80,000 for individuals and $160,000 for couples. There is, however, no criteria surrounding net assets. So, for example, a retiree who had little income but substantial assets such as a home and retirement accounts could qualify.

7. You need a bank account to get a stimulus payment

Not true. Stimulus payment are being distributed by paper check and prepaid debit card, in addition to direct deposit into a bank account. Still, the IRS strongly urges you to get your stimulus payment via direct deposit, which not only arrives faster than a check, but is more secure as well. If you don't have a bank account, the Federal Deposit Insurance Corp. can help you find one.

8. Your stimulus check will reduce your 2020 tax refund

The stimulus payment you get is technically an advanced refundable tax credit. Tax credits reduce your tax bill dollar for dollar. The refundable part means that you get the full value of the credit, even if you don't owe as much as the credit. If you have a $600 tax bill and a $1,000 refundable credit, you'll get a check from Uncle Sam for $400 (1,000-600=400). But this tax credit comes after all your credits and deductions for 2020, meaning that it will only increase your tax refund if you're eligible, and never lower it.  

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9. You can't get a stimulus payment if you don't live in one of the 50 states or Washington, D.C.

False. U.S. citizens living abroad are eligible for stimulus payments. The same is true for eligible residents of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands. However, payments to residents of U.S. territories are being administered by local tax authorities, not the IRS.

10. Relatives can keep stimulus payments sent to dead people

While some payments have gone out to the deceased, heirs can't keep the money. The IRS announced that stimulus checks sent to the dead must be returned to the government. 

Editor’s note: This story was originally published on May 20, 2020. It’s been updated with the latest information.

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