A client won $25,000 in the lottery and didn’t get a stimulus check.

“The optimist sees the donut, the pessimist sees the hole.” ― Oscar Wilde

I am a CPA and I do taxes for people as a side gig. All of my clients are family and friends, or people referred by family and friends. This individual was referred to me by a family member to do their 2019 tax return because they didn’t know to put a $25,000 lottery prize on their tax return.

“ I did not get any of the stimulus payments. Can you see if you can figure out why? As you know I am not wealthy and don’t understand why I haven’t gotten any payments.” — This note was included with the W-2’s and 1099’s they sent me for their 2020 tax return.

I am one of the fortunate people that did not have my income affected by the pandemic. Because of this I do not have to worry about getting the stimulus payments. Consequently, I didn’t pay a lot of attention to who did or didn’t get them and why.

A quick Google search and I was able to find out that the payments for 2020 were based on 2019’s income as reported on your tax return. Individuals that had income between $75,000 and $99,000 got reduced payments. If your income was over $99,000 you did not get a payment. The second payment had similar rules.

This person is retired and draws a pension. They also work part time because they enjoy what they do. In addition to this they get a small amount of social security income. All of these added together does not put them over the income threshold to qualify for a payment. However, add in a $25,000 lottery prize and they exceed the limit.

When I explained this to them, their initial reaction was anger. Anger at the realization they were not going to get $1200 and anger that other people who didn’t pay as much in taxes were going to get payments.

I don’t know this person very well, but I was not expecting this type of reaction. They were not throwing a tantrum, but they were upset. Upset that they were not going to get $1200 because they got $25,000.

When I pointed this out, they didn’t say anything for a moment and then said “I didn’t think of it that way.” They were no longer upset and felt much better about the whole thing.

Changing your perspective really can be the difference between having a bad day and a good day.