Some individuals by no means obtained or didn’t get their full stimulus fee quantity in 2021. If this is applicable to you, or when you gained any dependents in 2021, you would possibly be capable of declare the 2021 Restoration Rebate Credit score — even when you don’t normally file taxes.
Try our FAQs beneath for basic data on who’s eligible for this essential tax aid and the way to declare the credit score in your return this tax 12 months.
What’s the Restoration Rebate Credit score?
The third Financial Affect Fee (stimulus fee) was an advance fee of the 2021 Restoration Rebate Credit score given to eligible people.
Whereas most individuals obtained their third stimulus verify in 2021, some People solely obtained a partial fee or by no means obtained their entitled stimulus fee as a result of IRS not figuring out their up to date tax state of affairs.
If you’re lacking all or a part of your third stimulus fee, you possibly can declare the quantity as a Restoration Rebate Credit score in your 2021 earnings tax return.
How is the 2021 Restoration Rebate Credit score totally different from 2020?
The third Financial Affect Fee (EIP) differed from the primary two stimulus funds from 2020 in 3 ways:
- The max fee quantity elevated to $1,400 per individual (together with all qualifying dependents).
- Qualifying dependents had been expanded to incorporate extra quantities for all dependents, not simply youngsters below 17.
- Revenue limitations modified — this 12 months’s Restoration Rebate Credit score absolutely reduces to $0 extra rapidly as soon as your adjusted gross earnings (AGI) exceeds the earnings threshold.
How do I do know if I’m eligible to assert the tax credit score?
It’s possible you’ll qualify for the 2021 Restoration Rebate Credit score when you by no means obtained the third stimulus fee final 12 months or didn’t obtain the complete quantity.
Eligibility for the tax credit score additionally relies on the next necessities:
- You’ll be able to’t be claimed as a dependent of one other taxpayer
- You could have a Social Safety quantity or Adoption Taxpayer Identification Quantity (ATIN)
- You can’t be a nonresident alien
Your credit score quantity will probably be lowered in case your AGI exceeds the next earnings thresholds:
- $150,000 for married joint filers or qualifying widows and widowers (ineligible for credit score if AGI is $160,000 or extra)
- $112,500 for head-of-household filers (ineligible for credit score if AGI is $120,000 or extra)
- $75,000 for all different filers (ineligible for credit score if AGI is $80,000 or extra)
I don’t must file taxes with the IRS this 12 months. Can I nonetheless declare the Restoration Rebate Credit score?
Everybody eligible for this credit score ought to file a 2021 federal tax return, even when you don’t normally file taxes. When you don’t owe taxes, you’ll obtain the credit score quantity as a tax refund.
Can I declare the Restoration Rebate Credit score even when I wasn’t eligible for the third stimulus fee?
Presumably! You would possibly nonetheless be capable of declare the tax credit score if any of the next situations apply to you:
- You had a change in earnings: In case your earnings was decrease in 2021, the IRS might have used an incorrect AGI to calculate your third stimulus fee, which means you would possibly qualify for greater than you obtained (check with the earnings thresholds we listed above).
- You gained a qualifying dependent: You’ll be able to declare the Restoration Rebate Credit score for any qualifying little one born, adopted, or positioned into foster care with you in 2021.
- You’re not a dependent: If another person claimed you as a depending on their tax return in 2019 or 2020 and are not thought-about a dependent for 2021, you could possibly declare the credit score in your tax return.
- You had been issued a Social Safety quantity earlier than the due date of your 2021 tax return (together with any extensions).
I qualify for the Restoration Rebate Credit score. How will I get my fee?
Claiming the Restoration Rebate Credit score will both scale back any tax you owe for 2021 or be included in your tax refund after you file.
I can’t bear in mind the EIP quantity I obtained final 12 months. How do I look that up?
You’ll be able to log in to your IRS on-line account to view your third Financial Affect Fee. When you obtained the third stimulus fee final 12 months, the IRS must also ship you Letter 6475, which is able to provide help to decide when you qualify to assert the Restoration Rebate Credit score.
I obtained the third stimulus fee final 12 months regardless that I wasn’t eligible. Do I’ve to pay it again?
Nope! You don’t must pay again any of the third Financial Affect Fee, even when you obtained an overpayment from the IRS in error as a consequence of outdated data.
What is going to occur if I enter the improper quantity for the Restoration Rebate Credit score on my tax return?
When you figured your credit score incorrectly, the IRS requests that you simply don’t file an amended return. The IRS will appropriate the Restoration Rebate Credit score quantity for you and proceed processing your return. You gained’t want to supply any extra data, however there could also be a processing delay.
Be sure to don’t declare $0 or go away that area clean in your return — when you do, the IRS will take this as your resolution to not declare the credit score.
I’m eligible for a 2021 Restoration Rebate Credit score, however I already filed and didn’t declare the credit score. What ought to I do?
If you didn’t declare the credit score in your unique tax return, it’s essential to file an amended return utilizing Type 1040-X.
When you file your amended return, you need to use the The place’s My Amended Return? on-line instrument from the IRS to verify its standing. The instrument works for each e-filed and paper amended returns.
The IRS remains to be experiencing important processing delays as a result of pandemic, so if you want to file an amended return, simply maintain that in thoughts!
