Congress has been arguing back and forth for months on whether or not the second round of COVID-related stimulus checks, turned “economic impact payments”, will be forthcoming. At the exact time of this writing, most Americans stand to receive a $600 check. This time, many taxpayers’ children will receive government stimulus payments as well. The capitol-hill bickering continues, and many Americans may receive up to $2000 this round.

Not only does confusion reign in Washington on what to do, but there is also confusion in the minds of many Americans about the taxability of these government checks. As it stands now, just as with the first round of stimulus checks, which were formally termed “recovery rebates,” these new payments won’t be taxed as income.

Here are the main points:

1. The maximum payment is $600 for unmarried filers with an AGI below $75,000 or single parents with an AGI below $112,500. Taxpayers who file jointly with an AGI below $150,000 will get a $1,200 check.

2. Again, you will not owe taxes on these funds. But here’s the kicker: You’ll need to report the amount you will get on next year’s tax return to make sure, according to the IRS, that your payment was correct.

3. Just for fun, here’s some more technicalities regarding the round of stimulus: The IRS is declaring this stimulus as a “refundable tax credit” meant to offset your 2020 (next year’s filing) federal taxes. This adds a layer of confusion because taxpayers don’t claim tax credits until filing time. However, because of the severe economic impact of the pandemic, the government is distributing the credits early in the form of an upfront cash payment.

Yes, you won’t have to pay taxes on the money you receive. Nonetheless, a quick peek under the hood reveals the enormous machinations of the federal autocracy. In this case, no tax damage done. But in many other situations where money is involved, there are numerous, confusing, and often competing tax implications. You don’t want to run afoul of the IRS. That’s why, for more and more people these days, it is prudent to partner with a tax-savvy firm for your personal and business tax-preparation situation.