You Can Claim the Recovery Rebate Credit on Your Taxes!

How to Claim the Recovery Rebate Credit on Your 2020 Tax Return

recovery rebate credit 2020

The recovery rebate credit can be claimed as part of your 2020, 2021 tax return, so you can use it to increase your tax refund or decrease the amount you owe to Uncle Sam for the 2020 tax year.

The Recovery Rebate Credit is a product of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Tax Relief Act. This credit is designed to support Americans throughout the pandemic.

This tax credit was paid in two installments in 2020 and early 2021. It is considered to be an advance payment. Those who did not receive their stimulus checks but were eligible can still claim the recovery rebate credit on their 2020 tax returns.

The majority of qualifying individuals will have already received their economic impact payments and do not need to fill in any forms or worksheet. Alongside each stimulus check, the IRS will have also provided a receipt confirming the payment.

Information regarding stimulus does not need to be filled out on 2020 tax returns. This is an automatic stimulus payment.

Can I Claim the Recovery Rebate Credit With TurboTax?

How Recovery Rebate Credit TurboTax

If you received each stimulus check in full, you have already received the government support you are entitled to.

If, however, you have yet to receive the stimulus you were entitled to, you may still be able to claim the Recovery Rebate Credit through TurboTax when you file your tax returns during 2021.

The IRS provides a Recovery Rebate Credit Worksheet on its website and with Form 1040/1040-SR to help you if you file with paper and pen.

Taxpayers who are eligible to claim this tax credit must have been either a U.S. citizen or a U.S. resident alien during 2020. They also cannot have been claimed as someone else’s dependent for the 2020 tax year. Finally, eligible taxpayers must hold a valid Social Security number for employment purposes.

The Recovery Rebate Credit is claimed through either Form 1040 or Form 1040-SR. This applies to everyone, even those who are not usually required to submit a Federal tax return.

To get your tax refund faster, you are advised to use electronic filing and Direct Deposit as your payment method of choice.

Did You Receive the Full Economic Impact Payment?

The first stimulus check was valued at $1,200 for individual taxpayers, or $2,400 if married and filing jointly. It also included $500 per qualifying child.

The second stimulus check was worth $600 to individual taxpayers, or $1,200 if married and filing jointly. Households received $600 per qualifying child.

In the event you have received both of these stimulus checks, you have received the full economic impact payment you were entitled to.

You will still get a stimulus check even if you owe taxes. The IRS will not offset any unpaid taxes against the stimulus provided by the government.

What if I Reside in a U.S. Territory?

The U.S. territories of Puerto Rico, Guam, American Samoa, the Northern Mariana Islands, and the U.S. Virgin Islands have not been excluded from the Recovery Rebate Credit.

Eligible residents within these territories do not need to input an amount on line 30 of their Form 1040/1040-SR or complete the Recovery Rebate Credit Worksheet. Instead, their local tax authorities will provide them with any stimulus payments residents are entitled to.

Recovery Rebate Credit Worksheet

recovery rebate credit worksheet online

If you are eligible for the Recovery Rebate Credit this year, you will file with either Form 1040 or Form 1040-SR. If you file your taxes online, the correct forms will be filled in and filed for you.

Paper tax returns for 2020 will include a worksheet for taxpayers to fill out to see if they are eligible to claim this tax credit.

To fill in the worksheet you will need to know about any stimulus payments you have already received.

Under the terms of the Recovery Rebate Credit, the stimulus amount phases out if your income exceeds $75,000 if you are a single taxpayer, or $150,000 if married and filing jointly. The phase-out limit is $112,500 if filing your tax returns as a head of household.

How to File Taxes Online in 3 Simple Steps With TurboTax

Remember, with TurboTax Online Tax Filing we’ll ask you simple questions and fill out the right forms for you. We’ll find every tax deduction and credit you qualify for to get you the biggest tax refund, guaranteed!