Following the outbreak of the COVID-19 epidemic, both Donald Trump and Joe Biden’s administrations issued Economic Impact Payments, which are essentially stimulus handouts.
Americans with low and moderate incomes received three distinct stimulus checks: a $1,200 payment in April 2020, a $600 payment in December 2020, and a $1,400 payment in March last year.
Despite this, some families have yet to collect the full amount of the stimulus payment to which they are entitled. However, it is not yet too late, since these families may still be able to backdate their stimulus payments.
“People who are missing a stimulus payment or received less than the entire amount may be entitled to claim a Recovery Rebate Credit on their 2020 or 2021 federal tax return,” according to the IRS.
What Is the Recovery Rebate Credit?
The IRS website has a detailed section that explains how the Recovery Rebate Credit works.
“If you didn’t qualify for a third Economic Impact Payment or received less than the full amount,” the IRS says, “you may be entitled to claim the 2021 Recovery Rebate Credit when you submit your 2021 tax return.”
Because the credit is calculated using information from your 2021 tax year, any third Economic Impact Payments you get will diminish the amount of credit you’re entitled to.
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Your 2021 Recovery Rebate Credit will either diminish or be included in your tax refund for 2021. To claim the 2021 Recovery Rebate Credit, you’ll need the whole amount of your third Economic Impact payment, plus any top-up payments.”
There are four reasons why you could be due an additional stimulus check this year.
In addition, since their circumstances have changed, families that did not claim the payment they were entitled to at the time are now eligible to extra stimulus payments.
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There are four basic scenarios where this might happen, as listed below:
- If you had a kid last year and want to claim the youngster as a dependant on your 2021 tax return.
- If you added a new dependant to your family last year, such as a parent, grandchild, or foster kid, you may claim them as a dependent on your 2021 tax return.
- If you are a single filer who earned more than $80,000 in 2020 but less last year; if you are a married couple who earned more than $160,000 in 2020 but less last year; or if you are ahead of a family filer who had to earn more than $120,000 in 2020 but less this year.
- If you are a single filer who earned between $75,000 and $80,000 in 2020 but less earlier this year; if you are a married couple who earned between $150,000 and $160,000 in 2020 but less last year; or if you are a family filer who earned between $112,500 and $120,000 in 2020 but less previous year.