Recovery Rebate Credit: Who Qualifies in 2021-2022

The recovery rebate credit can help you to claim any stimulus money you didn't receive but were entitled to.
Jan 21, 2022

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The IRS sent out the third round of stimulus payments (also referred to as economic impact payments, or EIPs) to eligible taxpayers from March through December of 2021. Those who received the third payment should be on the lookout for Letter 6475, which will come in the mail from the IRS. This document summarizes how much money was disbursed to you (including "plus-up payments") as part of the third EIP drop.

If you believe you qualified for the third payment and didn't receive it, or if you think you received less than you were eligible for, there's some good news. You'll get a chance to claim the funds via the recovery rebate credit when you file your 2021 tax return.

How much was the third stimulus payment?

The U.S. Treasury disbursed up to $1,400 per adult and $1,400 per qualifying tax dependent. A qualifying married couple with two kids was eligible for up to $5,600, for example.

Who qualifies for a stimulus check?

Not everyone. Here's the income criteria:

  • Single filers whose adjusted gross income does not exceed $75,000 are eligible for the full $1,400 stimulus payment. The amount begins to shrink after that and phases out completely at $80,000.

  • Married couples who file jointly and whose AGIs do not exceed $150,000 are eligible for a full $2,800 stimulus payment. The amount begins to shrink after that and phases out completely at $160,000.

  • Heads of household whose AGI does not exceed $112,500 are eligible for the full $1,400 stimulus payment. The amount begins to shrink after that and phases out completely at $120,000.

No matter your IRS filing status, the stimulus payment should have included up to $1,400 for every qualifying tax dependent you might have.

Who doesn't qualify for a stimulus check?

  • People who don't have valid identification numbers. Everybody involved must provide a valid Social Security number (there are special rules for adopted children and members of the military).

  • Certain dependents. If you are a tax dependent on someone else’s tax return, the person who claims you as a tax dependent claims the stimulus check.

  • Nonresident aliens.

  • People who died before January 1, 2021.

When did stimulus checks arrive? And in what form?

The IRS distributed the third stimulus payments from March through December 2021 via direct deposit, check or a preloaded debit card.

Recovery rebate credit: What it is and how to claim it

The third stimulus payment was technically an advance on the 2021 tax credit. And because the IRS did not yet have access to your 2021 tax information when the advance payments were sent out, they relied on the most recent information they had on file for you (likely your 2020 or 2019 return) to determine how much to send.

When you receive Letter 6475, compare the amount you received against how much you were eligible for based on your 2021 tax information. If you think you received less than you were entitled to, you might be able to recover those funds by claiming the balance via the recovery rebate credit (line 30 of Form 1040) on your 2021 tax return. This could happen if, for example, you welcomed a newborn in 2021 or will be claiming a new qualifying dependent on your 2021 taxes.

On their website, the IRS states that most people who were eligible for the third round of payments have already received the funds. But if for some reason you were eligible for the payment but never received it, you also might be able to recover that money via the recovery rebate credit.

Page 59 of the instructions for Form 1040 has a worksheet to help you calculate how much to claim, and many quality tax-prep software programs will help you to claim the credit if you're eligible. Do make sure you carefully review the information you supply to the IRS; math errors or miscalculations can delay your refund.

Will stimulus checks be taxed as income?

No. It's what's called a refundable tax credit. You will have to report having received it on your 2021 return, though.

Is the stimulus check a loan?

No.

Do I have to repay my stimulus money?

No, unless you obtained your stimulus check fraudulently.

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