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Recovery Rebate Credit – How to Claim Missing Stimulus Payments

Recovery Rebate Credit – How to Claim Missing Stimulus Payments
Ryan McInnis
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If you’re wondering where your government stimulus payment is, you’re not alone. More than 8 million taxpayers are still waiting for their money. If you’re one of them, here’s everything you need to know to make sure you get your stimulus check or direct deposit. Starting with the Recovery Rebate Credit.

If you’re wondering where your government stimulus payment is, you’re not alone. More than 8 million taxpayers are still waiting for their money. If you’re one of them, here’s everything you need to know to make sure you get your stimulus check or direct deposit. Starting with the Recovery Rebate Credit.

What is the Recovery Rebate Credit?

When looking for missing stimulus money, it’s important to distinguish between a stimulus payment and the Recovery Rebate Credit (RRC), so let’s start there. In 2020, the government sent two stimulus checks to taxpayers. If they had your bank account information on file, the IRS may have made a direct deposit into your account rather than sending a paper check.

If you never received one or both of these stimulus checks, your first step is to visit the IRS Get My Payment webpage. On this page, you can check the status of your payment. If the IRS sent your payment but you never received it, you need to ask the IRS to track the payment for you.

If the IRS didn’t send you a payment but you believe you are eligible for one, your next course of action is to file for an RRC. You will request this credit as part of your 2020 tax return, specifically on line 30 of the Form 1040. Remember that the RRC is ONLY for taxpayers who were not sent an economic impact payment. If your payment was sent but never received, you must track it through the IRS.

Who Qualifies for the Recovery Rebate Credit and Stimulus Payments?

The IRS based your eligibility for the two 2020 relief payments on your 2018 and 2019 tax filings. If your adjusted gross income in these years was $75,000 or below ($150,000 for married couples) you were eligible for the payments. The first payment was $1,200 ($2,400 for married couples) and the second round of payments was $600 ($1,200 for married couples).

If you earned more than $75,000 ($150,000 if married) but less than $99,000 ($198,000 for married couples), you may have received a partial or pro-rated economic impact payment.

How to Claim Your Stimulus Check

Theoretically, taxpayers were required to do nothing in order to claim their stimulus money. The IRS automatically calculated and sent payments to those who were eligible to receive them. If you’re still waiting for your money, however, then you know that this system didn’t work for everyone.

Again, we remind you to check the status of your payment with the IRS before taking any other action. If a payment was sent to you but never received, the IRS will need to track your payment down for you and correct any problems, such as erroneous bank account numbers, incorrect addresses or checks presumed lost in the mail.

If you’re due a payment but none was sent to you, it could be because you weren’t required to file taxes in 2018 and 2019. In that case, you’ll need to file a return for 2020 even if you aren’t normally required to do so. You can get your money by claiming the RRC on that return. The IRS will issue your credit just as it would a tax refund, by direct depositing the money in your account or, if you prefer, by sending you a paper check.

There are also a few other issues that may necessitate filing a return and claiming the RRC to get your money. One is if you lost income in 2020. Let’s say, for example, that you’re single and made a very comfortable $100,000 in 2018 and 2019. In this case, you would have made too much money to qualify for stimulus checks. But if you were furloughed for part of 2020 due to the virus and your income dropped, you could now be eligible for the RRC.

Having a baby or adopting a child in 2020 could also change your payment eligibility status. Qualifying taxpayers received $500 per child in the first round of payments and $600 per child in the second round. If you had a child the IRS didn’t yet know about, you may be eligible for more stimulus money under the RRC.

A change in dependency status is also worth a look. If, for example, you were an 18- or 19-year old college student in 2018 and 2019, your parents may have claimed you as a dependent. If so, you weren’t eligible for the stimulus. (Your parents wouldn’t have received any stimulus money for you, either, since you were over the age of 17.)If your parents didn’t claim you in 2020, you can now claim yourself and possibly qualify for the RRC.

How to Get Your Stimulus if You Aren’t Required to File Taxes?

We touched on this earlier, but it’s important and bears repeating. There is absolutely no way for you to claim your stimulus money without filing a tax return. If you qualify for economic stimulus money but didn’t get any, you must file a return in 2020 and fill out line 30 on your Form 1040. This is where you request the RRC, which will retroactively pay you now for the payment or payments you should have received in 2020.

The Third Stimulus Check

As the nation keeps fighting COVID, moving forward and adapting, things are constantly changing. The Biden administration has already approved and begun distributing a third round of stimulus money for 2021.

To be eligible, married taxpayers must have an adjusted gross income of not more than $150,000. Those filing as head of household can not exceed $112,500 and single taxpayers are limited to $75,000 of income. As before, stimulus money payments will be phased out gradually for those with higher incomes.

If you’re planning to file or have already filed a 2020 return you need not do anything. Your payment will come to you automatically if you’re eligible. If you haven’t yet received your payment, don’t worry — the IRS is generating the payments as they process 2020 tax returns. It’s possible they simply haven’t gotten to you yet, so sit tight or check the status of your account on the IRS website.

If you aren’t required to file a tax return in 2020 but feel you’re eligible for the third economic stimulus payment, file a return even though it’s not required. Filing will get your information into the IRS system and help make sure you get the money you’re due without having to jump through any hoops or specifically ask for it.

If you think there is any possibility that you might be missing out on your economic stimulus money, don’t hesitate to take action. At Picnic Tax, we’ll be happy to review your situation with you and help determine if you may have more money coming to you. If you do, together we’ll take the necessary steps to make sure you get every penny you’re due.

We could all use a few more dollars in our pockets as we navigate the ever-changing COVID landscape, and we’re happy to help you make sure that you’re not leaving any money on the table. Sign up for Picnic Tax today for help tracking down your stimulus money.