What is the Recovery Rebate Credit?
You can claim your missing stimulus payment with the Recovery Rebate Credit. The IRS introduced the Recovery Rebate Credit for eligible taxpayers who did not receive the first or second stimulus payment.
This credit was authorized for COVID-19 assistance under the CARES Act. It is an advanced payment that will increase your refund or lower your tax due to the IRS.
What are the requirements?
Be advised, you do not need to complete any information for this credit if your payment in 2020 was the full payment required by the IRS. For example, for the first payment, $1,200 for single filers, $2,400 for joint filers, plus the additional $500 per qualifying child you had in 2020. For the second payment, $600 for single filers and $1,200 for joint filers.
Take a look below at the requirements:
- You were a U.S. citizen or U.S. resident alien in 2020
- Cannot be a dependent of another taxpayer for tax year 2020
- Have a valid social security number for employment before the due date (including extensions) of your 2020 tax return
You can take the Recovery Rebate Credit for any recovery rebate amount that is more than the Economic Impact Payment you received in 2020 by completing line 30 of your 2020 Form 1040 or 1040-SR.
You may be able to claim the credit if you meet the following.
- You are eligible but were not issued an Economic Impact Payment (in the case you didn’t file a 2018 or 2019 tax return)
- Your Economic Impact Payment was less than $1,200 or $600 ($2,400 or $1,200 if married filing a joint return) plus $500 or $600 for each qualifying child you had in 2020
How do I find the payment amount I received in 2020?
You can either look for Notice 1444 for the amount the IRS has issued or check your IRS account online. Your economic stimulus account will have your payment amount received.
How do you claim this credit?
You can claim this credit by completing the Recovery Rebate Credit Worksheet located on the 2020 instructions of your 1040 form to figure the credit you’re eligible for. The final calculation will then be located on line 30 of your tax return.
Are there limitations?
Like many other credits, there is a limitation on the income threshold. Your recovery rebate amount phases out if your adjusted gross income (AGI) for 2020 exceeds $150,000. If you are married filing a joint return, your AGI must be under $112,500. For the head of household status, you cannot exceed $75,000.