Recovery Rebate Credit
2020 was a year for full of changes and those changes are being reflected on your tax return. The Coronavirus Aid, Relief, and Economic Security (CARES) Act and the COVID-related Tax Relief Act provided many Americans with stimulus checks, known as Economic Impact Payments. However, not everyone that was eligible for these payments received them due to various reasons.
This year, eligible individuals who did not receive these payments or the full amount may claim them as a credit, known as the Recovery Rebate Credit, on their tax return for 2020.
Who Can Claim the Recovery Rebate Credit?
To claim the Recovery Rebate Credit, you must have been eligible to get the Economic Impact Payment. To be eligible, you must:
Be a U.S. citizen or U.S. resident alien in 2020
Not be claimed as a dependent of another taxpayer for tax year 2020
Have a Social Security number that is valid for employment issued before the due date of your 2020 tax return (including extensions).
You can claim the Recovery Rebate Credit if you met the eligibility criteria in 2020 and the following applies to you:
You didn’t receive an Economic Impact Payment in 2020
You filed single for 2018 or 2019, and your payment was less than $1,200
You are married, filed jointly for 2018 or 2019, and your payment was less than $2,400
You didn’t receive $500 for each qualifying child on your tax return in 2018 or 2019
To find out if you’re eligible, you can use the Recovery Rebate Credit Worksheet provided on the IRS website.
How Do I Claim the Recovery Rebate Credit?
If you are eligible, you can claim the credit when you file your 2020 tax return. Even if you are not normally required to file a tax return, you must file a Form 1040 or Form 1040-SR to claim the Recovery Rebate Credit. This credit can either increase the amount of your refund or decrease the amount of tax you owe.
Need Help Claiming the Credit?
At Northside Tax Service, we keep up with all the tax law changes to help our clients get all the credits and deductions they deserve. Give us a call at (360) 922-0235 to get started with one of our experienced tax preparers.
To learn more about this credit, visit the IRS page: Recovery Rebate Credit
Disclaimer: This material is prepared for informational purposes only, and is not tax advice. Please speak with a tax professional to see how this information may apply to you.
