What is the Recovery Rebate Credit?

Many taxpayers received Economic Impact Payments during 2020 and 2021  in response to difficult economic conditions caused by the COVID-19 pandemic. If you have not yet received the first or second stimulus payments from 2020, you may be eligible to claim the Recovery Rebate Credit on your 2020 tax return. Additionally, if you did not receive the third payment from the 2021 stimulus, you should be able to claim it on your 2021 tax return.

Due to the coronavirus epidemic, the U.S. Treasury Department issued an Economic Impact Payment (EIP) to eligible taxpayers twice during the 2020 tax year. The amount of each EIP (also called stimulus) was based on your tax return for 2019 or 2018:

  1. In the first EIP, eligible individuals received $1,200 plus $500 per qualifying child on their tax return. Married couples who filed a joint return received $2,400 plus $500 per qualifying child.
  2. The second round of EIPs provided individuals with $600, married couples filing jointly with $1200, and all eligible filers with an additional $600 for each qualifying child on the return. 

Similarly, the U.S. Treasury distributed a third stimulus in the 2021 tax year, following approval of the American Rescue Plan Act, which was based on tax return for the previous two years. Most families will get $1,400 per person, including all dependents claimed on their tax returns in 2019 and 2020. Unlike the first two payments in 2020, the third payment  is not restricted to children under 17. Qualifying dependents include college students, disabled adults, parents and grandparents who have been claimed on their tax returns as dependents.

EIP amounts phased out as adjusted gross income rose above $75,000 for single filers and $150,000 for joint returns.

If you did not file a return for 2018, 2019 or 2020 and you did not request your payment directly from the IRS, you might not have received all the stimulus for which you were eligible. In some cases, even taxpayers who did file a tax return did not receive their EIPs. 

You may be eligible for additional payments based on changes to income or dependents that occurred after you filed the tax return used to calculate one or both EIPs. You do not need to repay any excess EIP you received, even if you reported more income or fewer dependents on your 2020 or 2021 tax return than on the return used to calculate your EIP. 

If you are eligible for more EIP than you received, you can request the difference by claiming the Recovery Rebate Credit on your tax return. The amount of your credit will be based on the filing status, income and number of dependents you report on your 2020 or 2021 tax return. 

If you are not sure whether you should have received the full amount of EIP you qualify for, you can complete the Recovery Rebate Credit Worksheet found in the Instructions for Form 1040 and Form 1040-SR.  

To be eligible to claim the Recovery Rebate Credit you must:

  • Be a U.S. citizen or resident alien in 2020
  • Not be the dependent of another taxpayer
  • Have a social security number valid for employment 

Important: If you did not receive the full EIP you are eligible for and you are not required to file a tax return, you may wish to file anyway in order to receive these payments.