If you missed out on one or more stimulus payments during the COVID-19 pandemic, there’s still a way to claim the money owed to you through the Recovery Rebate Credit (RRC). This credit is available to individuals who didn’t receive the full amount of their stimulus checks or who were overlooked entirely during the distribution. Here’s a detailed breakdown of how to check your eligibility and claim the credit through your federal tax returns.
Background on the Stimulus Payments
In response to the financial hardship caused by the COVID-19 pandemic, the U.S. government issued three rounds of direct payments to eligible individuals and families. These payments were meant to help Americans cope with the economic challenges that arose. The first two rounds were distributed in 2020 under the Trump administration, while the third round came in 2021 under the Biden administration.
Despite the widespread distribution, some people may not have received the full amount or any payments at all due to various factors, such as incorrect tax information or changes in financial status. The good news is that these missed payments can still be claimed.
Who Can Claim the Recovery Rebate Credit?
The Recovery Rebate Credit (RRC) is designed for individuals who did not receive the full amount of stimulus checks they were eligible for. This credit applies to the tax years 2020 and 2021, depending on which round of stimulus payments you missed.
- Missed First and Second Stimulus Payments (2020 Tax Year): The first two rounds of payments were considered advance payments of the 2020 Recovery Rebate Credit. If you didn’t receive these or received less than you were eligible for, you can claim the RRC on your 2020 tax return.
- Missed Third Stimulus Payment (2021 Tax Year): The third round, issued in 2021, is tied to the 2021 tax return. If you didn’t get the full amount, you can claim the remaining amount on your 2021 tax return.
Steps to Claim the Recovery Rebate Credit
Claiming the RRC is straightforward, but it’s essential to follow the proper steps to ensure your claim is processed correctly. Here’s how to do it:
- Determine the Amount of Stimulus Payments You Received: Before filing your tax return, gather information on the Economic Impact Payments (EIP) you’ve received. This ensures accuracy when claiming the credit. You can find this information by reviewing IRS Letter 6475, which was sent to recipients of the third stimulus payment, or by checking your IRS Online Account.
- Calculate the Credit Using IRS Forms: Use the Recovery Rebate Credit Worksheet provided with IRS Form 1040 to calculate how much credit you’re eligible for. This step is crucial, as errors can lead to delays in processing your claim.
- File Your Tax Return: Even if you don’t usually file a tax return, you must file one for the applicable tax year to claim the RRC. If you’re missing the first two payments, claim the credit on your 2020 tax return. If the third payment is incomplete, file it on your 2021 return.
Documentation Needed for Claiming the Credit
The IRS recommends having certain documents on hand to simplify the process:
- IRS Letter 6475: This letter outlines the amount of the third Economic Impact Payment you received.
- IRS Online Account: If you don’t have the letter, you can log in to your IRS Online Account to find the information you need.
- When filing for the 2021 RRC, be sure not to include the amounts from the first two stimulus payments, as they pertain to the 2020 tax year.
Why Filing Electronically is the Best Option
Filing your tax return electronically is highly recommended when claiming the Recovery Rebate Credit. Not only does this method help avoid errors that could slow down your refund, but it also ensures a faster processing time. Additionally, if you are eligible for a refund, you can opt to have it deposited directly into your bank account, which is both secure and efficient. All you need is your bank’s routing number and account number.
What if You’ve Already Received the Full Payment?
If you’ve already received the full amount of your stimulus payments, there’s no need to take any further action when filing your tax return. However, if you received less than expected, you may still be eligible for the RRC, and it’s worth filing a claim.
Final Thoughts
The Recovery Rebate Credit offers an opportunity for individuals who missed out on stimulus payments to still receive what they’re entitled to. By following the correct process, gathering the necessary documentation, and filing electronically, you can ensure a smooth and swift experience in claiming your credit. If you’re eligible, don’t delay—file your return and get the funds you deserve.
