Trump and Biden both sent stimulus checks, known as Economic Impact Payments (EIPs), after the outbreak of the COVID-19 pandemic occurred.
Those with low and moderate incomes received $1,200 in April 2020, another $600 in December 2020, and a final $1,400 in March of last year as part of three separate stimulus payments.
Even if some families still haven’t claimed all of the stimulus money they were eligible for. There is still time, as these families may be able to retroactively apply for stimulus funds.
Taxpayers who haven’t received stimulus payments or received less than the full amount may be able to claim a Recovery Rebate Credit on their federal tax returns for 2020 or 2021.
What Is the Recovery Rebate Credit?
In-depth details about the Recovery Rebate Credit can be found on the IRS’s official website.
According to the IRS, “you may be eligible to claim the 2021 Recovery Rebate Credit when you file your 2021 tax return, even if you don’t usually file a tax return if you didn’t qualify for a third Economic Impact Payment or received less than the full amount.”
Any third Economic Impact Payments you receive will reduce the amount of the credit you’re eligible for because the credit is based on your 2021 tax year information.
Your 2021 Recovery Rebate Credit will be deducted from any tax you owe in 2021 or included in any refund you receive in the following year.
To be eligible for the 2021 Recovery Rebate Credit, you must submit the full amount of your third Economic Impact Payment, plus any additional payments.
There are four possible explanations for why you may be entitled to an additional stimulus payment this fiscal year.
In addition, families who did not claim the payment they were entitled to during the time are now eligible for additional stimulus checks because their circumstances have changed.
This could happen in any of the following four scenarios:
- In 2021, if you had a baby last year and claimed the child as a dependent, you will have to pay taxes on the child as well.
- To claim a new dependent on your 2021 tax return, you may have added a new family member, such as a parent or a grandchild, or even a foster child.
- To qualify, you must be a single filer who earned at least $80,000 in 2020, a married couple who earned at least $160,000, or a family filing who earned at least $120,000 in 2020 but fell short of those requirements earlier in 2019.
- Single filers earning between $75,000 and $80,000 in 2020, married couples earning between $150,000 and $160,000, and family filers earning between $112,500 and $120,000 in 2020 are all eligible for a lower tax rate than those earning between $112,500 and $120,000.