CLARITY ON THE RECOVERY REBATE CREDITS ON YOUR 2020 TAX RETURN

February 24, 2021

Many are unclear how the Stimulus payments will effect on your 2020 tax return so we wanted to summarize a few important reminders.

Frequently Asked Questions about the Stimulus Payments

  1. Recap of the Stimulus payments

a. First Stimulus payment amount was $1200 Single Taxpayer ($2400 Married Filing Jointly, MFJ) plus $500 per qualifying child.

b. Based on 2020 income.  Adjusted Gross Income (AGI) limitation phase out begins at $150,000/MFJ or Surviving Spouse, $112,500 Head of Household or $75,000 Single individuals.  It is reduced by 5% for every dollar above threshold

c. Second Stimulus was $600 Single ($1200 MFJ) plus $600 per qualifying child; same income thresholds as above.

2. Is The Stimulus Taxable? No

3. Will I Have to Pay the Stimulus Back? If you received too much of a stimulus in 2020, you do NOT have to pay it back…consider it a free lunch.

4. Will the Government Send Taxpayers 1099Like Forms Showing Amounts Received?

a. IRS will issue Forms 1444 (for first payment) and 1444B (for second payment).  Your rebates are available on your Internal Revenue Service tax transcripts but they will not reissue these forms if you misplace them or need an additional copy. 

b. Individuals with an account on IRS.gov/account will be able to view the amounts of the Economic Impact

5. Is there a specific form to claim the rebate credit on my 2020 tax return?

a. There is not an official form to claim credit on 2020 tax returns.  Any Recovery Rebate, credit not received but entitled to, will be reported on Line 30 of 1040 based on how the questions are answered when your tax return is prepared.  

b. The first and second stimulus payments are treated as two separate credits when answering questions.

6. If I received the full stimulus payment amounts already, will I qualify for additional credits? 

a. You will not qualify for any additional credits.  However, partial stimulus payments received may still be eligible for recovery rebates (the difference)  if your 2020 income is lower than 2019 or 2018 (depending on which year was used by IRS)

7. I Didn’t Receive My 1st Stimulus Check Because of Unpaid Child Support, Can I Claim the Credit?

a. No

b.  Taxpayers who didn’t receive their first check because of unpaid child support will not be eligible to recoup the garnished amount through the tax credit.

c. The second stimulus check cannot be garnished due to unpaid child support

8. My 1444 and or 1444-B show that I Received the Stimulus Check But I Never Received It, What Do I Do?

a. If your payment was issued by direct deposit, your first step is to check with your bank and make sure they didn’t receive a deposit.

b. You should only request a payment trace to track your Payment if you received Notice 1444 or if Get My Payment shows your payment was issued and you have not received it.

c. Call the IRS at 800-919-9835

d. Mail or fax a completed Form 3911, Taxpayer Statement Regarding Refund 

9. My Child Was Born/Adopted in 2020, Do I Get A Credit For Them?

a. Yes, but Children born or adopted in 2020 are eligible for the credit

b. You’ll need to report their SS# or adoption taxpayer identification number

c. You have until the due date (including extension) to

report their valid identification number.

10. My Child is No Longer a Dependent For 2020, Can They Get a Credit?

a. Yes, qualifications are based on 2020

b. If they meet all the other qualifications, they can claim an additional credit

c. “Can be claimed” not “Is claimed”

11. Does Someone Who Died Qualify?

a. No, a payment made to someone who died before receiving the payment should be returned to the IRS

b. For payments made to joint filers with a deceased

spouse who died before receiving the payment, return

the decedent’s portion of the payment

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