Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment. For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible.
Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.
Most individuals eligible for the Recovery Rebate Credit have already received the full amount in two rounds of payments, known as Economic Impact Payments.
If you received the full amount of each Economic Impact Payment, you won’t need to claim the Recovery Rebate Credit or include any information related to it when you file your 2020 tax return because the IRS already issued your Recovery Rebate Credit as Economic Impact Payments. See * below
If you’re eligible for the credit, and either the IRS didn’t issue you any Economic Impact Payments or the IRS issued less than the full amounts, you must file a 2020 tax return to claim the Recovery Rebate Credit even if you are not required to file a tax return for 2020.
Economic Impact Payments were based on your 2018 or 2019 tax year information. The Recovery Rebate Credit is similar except that the eligibility and the amount are based on 2020 information you include on your 2020 tax return.
You will need to know the amount of any Economic Impact Payments issued to you to claim the Recovery Rebate Credit. If you’re eligible for the Recovery Rebate Credit on your 2020 tax return, it will be reduced by any Economic Impact Payments we issued to you.
The Recovery Rebate Credit Worksheet in the Form 1040 instructions will help with the determination of eligibility for the credit.
You should have received IRS Notice 1444 for the first Economic Impact Payment, and Notice 1444-B for the second Economic Impact Payment. Please include these in your tax file for your tax preparer.
Contact Tax Attorney Abtin Barzin for help with calculating the full amount of recovery rebate credit you may qualify for.
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Individuals who didn’t qualify for the Economic Impact Payments or did not receive the full amount of the recovery rebates as Economic Impact Payments may be eligible for the Recovery Rebate Credit based on their 2020 tax situation. If you received the full amount for each Economic Impact Payment, you won’t need to include any information about either when you file your 2020 tax return. You received the full amount if:
Your first Economic Impact Payment was $1,200 ($2,400 if married filing jointly) plus $500 for each qualifying child; and
Your second Economic Impact Payment was $600 ($1,200 if married filing jointly) plus $600 for each qualifying child.
If you either didn’t receive any Economic Impact Payments or received less than these full amounts, you may be eligible to claim the Recovery Rebate Credit based on your 2020 tax information and must file a 2020 Federal tax return.
Generally, if you were a U.S. citizen or U.S. resident alien in 2020, were not a dependent of another taxpayer and have a Social Security number that is valid for employment, you are eligible for the Recovery Rebate Credit. Your credit amount will be reduced if your adjusted gross income (AGI) is more than:
$150,000 if married and filing a joint return or filing as a qualifying widow or widower
$112,500 if filing as head of household or
$75,000 for eligible individuals filing as a single or as married filing separately.
Your payment will be reduced by 5% of the amount by which your AGI exceeds the applicable threshold above.
You are not eligible for the Recovery Rebate Credit if any of the following applies:
You may be claimed as a dependent on another taxpayer’s 2020 return
You do not have a Social Security number that is valid for employment issued before the due date of your 2020 tax return (including extensions).
You are a nonresident alien.
You are an estate or trust.
Also, individuals who died prior to January 1, 2020 are not eligible for the Recovery Rebate Credit.