How to Claim Your Recovery Rebate Credit
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Have you filed your taxes for 2020 yet? If you have, you may be wondering how to claim your Recovery Rebate Credit . Find out how to do so in this blog post!
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Introduction
If you were eligible for the Recovery Rebate Credit, you may receive it:
-As a lump-sum credit when you file your 2020 tax return.
-As an advance payment through direct deposit to your bank account if you received the rebate in 2020.
-As a check in the mail if you did not receive the rebate in 2020 and did not provide bank account information on your tax return.
If you choose to receive the credit as an advance payment, the IRS will send you a letter informing you of the amount of your credit and how it was calculated. The letter will also provide instructions on how to report any changes that may affect your credit.
What is the Recovery Rebate Credit?
The Recovery Rebate Credit is a refundable tax credit for eligible individuals and couples equal to the amount of their economic stimulus payment, or EIP. This credit can be claimed on your 2020 tax return, even if you didn’t receive an EIP.
To be eligible for the credit, you must have been a U.S. citizen or resident alien on January 1, 2020, and you must not have been claimed as a dependent on another person’s return. In addition, your adjusted gross income must not have exceeded:
$75,000 for single filers
$112,500 for head of household filers
$150,000 for joint filers
Who is Eligible for the Recovery Rebate Credit?
To be eligible for the Recovery Rebate Credit, you must have:
-A valid Social Security number
-Filed a U.S. individual income tax return for 2020
-Been a U.S. citizen or permanent resident resident alien for the whole of 2020, or a nonresident alien married to a U.S. citizen or permanent resident and filing a joint return
If you received an advance payment of the credit in 2020, it will be reconciled when you file your 2020 tax return. You may receive additional money if you were eligible for more than the amount that was paid out in advance, or you may owe money if you were not eligible for the full amount of the advance payment.
How to Claim the Recovery Rebate Credit
If you didn’t receive the full economic impact payment (EIP) to which you were entitled, you may be able to claim the recovery rebate credit when you file your 2020 taxes.
The Internal Revenue Service (IRS) began issuing the first round of EIPs in early April 2020. If you didn’t receive the full amount of your EIP, or if you didn’t receive an EIP at all, you may be eligible to claim the recovery rebate credit when you file your taxes for 2020.
To claim the credit, you’ll need to file a Form 1040 or 1040-SR for tax year 2020. You’ll calculate the credit on Schedule R – Recovery Rebate Credit and attach it to your return.
If you’re not required to file a tax return for 2020, but would like to claim the credit, you can file a Form 1040-X – Amended U.S. Individual Income Tax Return.
Be sure to keep records of any EIP payments you received in 2020, as well as any correspondence from the IRS or other government agencies regarding your EIP payment(s). These records will help you correctly calculate the amount of credit to which you’re entitled.
Conclusion
By now, you should have received your economic stimulus payment. If you haven’t, don’t worry – the IRS is still processing payments and you should receive your rebate soon.
If you’re like most people, you’re probably wondering how to claim your Recovery Rebate Credit on your tax return. The process is actually quite simple. Here’s what you need to do:
1. Get a copy of your most recent tax return. You’ll need this to determine how much stimulus money you’re entitled to receive.
2. Look for Form 1040 or Form 1040-EZ on the IRS website. These are the forms you’ll need to file in order to claim your credit.
3. Fill out the form and include your stimulus payment information. Be sure to include the amount of money you received, as well as the date on which you received it.
4. Mail your form to the address indicated on the form instructions. Be sure to keep a copy of your completed form for your records.
5. Wait for your stimulus money to arrive! You should receive your payment within 8 weeks of mailing your form.
If you have any questions about how to claim your Recovery Rebate Credit, be sure to consult with a tax professional or visit the IRS website for more information.
