The Recovery Rebate Credit is a tax credit for eligible individuals and couples equal to the total of the rebates they received under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
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Overview of the Recovery Rebate Credit
The Recovery Rebate Credit is a refundable credit for eligible taxpayers who filed their 2020 tax return. The credit is based on the economic impact payments (stimulus checks) that were sent out in 2020. If you didn’t receive the full amount of the stimulus check, you may be eligible for the Recovery Rebate Credit.
Who is eligible for the credit?
To be eligible for the credit, you must have been a U.S. citizen or resident alien at the end of 2019 and you must not have been claimed as a dependent on another person’s return. You also must have valid Social Security numbers for yourself and any qualifying child.
Qualifying children include sons, daughters, stepchildren, foster children, brothers, sisters, half brothers, half sisters, stepsiblings, and descendants of any of them (for example, nieces or nephews). A qualifying child must have lived with you for more than half of 2020 and must not have provided more than half of his or her own support for the year.
You may be able to take the credit even if you do not have a qualifying child. This is sometimes called the “childless tax credit.”
If your filing status is married filing jointly and only one spouse meets the qualifying criteria above, then only that spouse can take the credit.
How is the credit calculated?
The credit is based on the total amount of qualifying rebates received, not to exceed $1,200 for individual taxpayers or $2,400 for taxpayers filing a joint return. To receive the full credit, a taxpayer’s AGI must be less than:
$75,000 if single or head of household
$112,500 if filing as qualifying widow(er)
$150,000 if married filing jointly
How to Claim the Recovery Rebate Credit
The Recovery Rebate Credit is a tax credit for eligible taxpayers who did not receive the full economic impact payment (stimulus check) authorized by the CARES Act. If you were eligible for the stimulus check but did not receive the full amount, you can claim the credit when you file your 2020 taxes. In this article, we’ll walk you through how to claim the credit and what you need to know about eligibility.
Who can claim the credit?
If you were a U.S. citizen or resident alien throughout 2020 and you didn’t receive the full amount of the first or second economic impact payments, you may be able to claim the recovery rebate credit when filing your 2020 federal income tax return. The credit is refundable, which means you’ll receive it even if you don’t owe any taxes.
The credit is based on the information included on your 2019 tax return (or 2018 tax return if you haven’t yet filed for 2019). The IRS will use this information to calculate the amount of the credit you’re eligible for and send it to you in the form of a direct deposit or paper check.
If your circumstances changed in 2020 (for example, if you had a baby or got married), you may be eligible for a larger credit than what was calculated based on your 2019 tax return. In this case, you’ll need to file a 2020 tax return to claim the additional credit.
How to claim the credit
If you were eligible for the credit in 2020 but did not receive it because you did not file a 2020 tax return, you can still claim the credit by filing a 2020 tax return.
You will need to complete ScheduleRCV and attach it to your Form 1040 or Form 1040-SR. The instructions for Schedule RCV will help you determine if you are eligible and how to calculate your credit.
If you have already filed your 2020 tax return and did not claim the credit, you can file an amended return using Form 1040-X. You will need to include Schedule RCV with your Form 1040-X.
Impact of the Recovery Rebate Credit
The Recovery Rebate Credit is a refundable credit for eligible taxpayers. It is based on the economic stimulus payments that were sent out in 2020. The credit is available for those who did not receive the full economic stimulus payment, or who are eligible for a higher credit amount. The Recovery Rebate Credit can be claimed on your 2020 tax return.
What is the maximum credit amount?
The maximum credit amount is $1,200 for single filers and $2,400 for joint filers. The credit is also increased by $500 for each qualifying child.
How will the credit be paid out?
The credit will be paid out in two installments, with the first being paid out in 2020 and the second in 2021. The credit will be paid as a refundable tax credit, which means that if you owe no taxes or if the credit is more than the taxes you owe, you will receive a refund for the difference.
The Recovery Rebate Credit is a refundable credit for eligible taxpayers. The credit is based on the economic impact payments (EIPs) that were sent out earlier this year. If you received an EIP, you may be eligible for the Recovery Rebate Credit.
What if I didn’t receive a stimulus payment?
If you didn’t receive a stimulus payment, it could be for a few reasons. The IRS has said that some payments may have been sent to an old or incorrect address, or your payment may have been intercepted by a bank or credit card company.
If you think you should have received a payment but didn’t, the IRS has set up a tool where you can enter your information to check the status of your payment. The tool will also tell you how to report any missing or incorrect stimulus payments.
Do I need to file a separate return to get the credit?
No. The IRS will figure the credit for you and send you the additional refundable amount, if any, with your regular tax refund. If you owe taxes, any credit will reduce what you owe.
I’m not required to file a tax return. Can I still get the credit?
The answer is yes, you can still get the credit even if you’re not required to file a tax return. You will need to file a return in order to receive the credit, but if you’re not required to file otherwise, you can do so by filing a Form 1040 or Form 1040-SR for 2020. The instructions for these forms will have more information on how to claim the credit.