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Claiming the recovery rebate credit on 1040 2020 Individual Tax Return

Feb 14, 2021 | IRS - Internal Revenue Service, US Tax Return 1040 / 1040NR | 12 comments

If you were eligible for the economic impact payment (EIP 1) and the second round at the end of December 2020 (EIP 2), known as the “Stimulus checks” but did not receive any of those or were eligible for a larger payment than you received, may be able to claim a Recovery Rebate Credit when you file your Form 1040 Individual Income Tax Return for 2020.

How much were the Economic Impact Payments EIP1 & EIP2?

The economic impact payments were part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. In the first round all eligible individuals were entitled to a payment or credit of up to $1,200 for individuals or $2,400 for married couples filing jointly. Eligible individuals also receive $500 for each qualifying child, in the second round the payment was $600 for individuals or $1,200 for married couples filing jointly.

The Recovery Rebate Credit in Form 1040 2020

To claim a recovery rebate credit, taxpayers will need to reconcile their economic impact payments with any recovery rebate credit amount for which they are eligible on their 2020 Form 1040. The credit will be added to any refund or reduce any tax due on the 2020 individual return.

Common reasons why taxpayers may claim a recovery rebate credit include reduced income in 2020, a change in marital filing status, a change in the number of dependents, and not having received any of the economic impact payments for which they were eligible, or even those individuals that had no filing requirement in 2018 or 2019 and did not request a payment.

If you have received more that you should, do you have to return it to the IRS?

If an eligible individual was entitled to an economic impact payment and received a payment greater than the recovery rebate credit calculated on the 2020 return, s/he still in most cases gets to keep the original payment. The excess does not need to be repaid to the IRS. However, in the case of the death of the taxpayer or a jointly filing spouse before receipt of the payment, or nonresident alien status for 2020, the FAQs direct the payment or portion of it allocable to the decedent or issued to the nonresident alien to be returned or repaid.

Are the EIPs taxable?

The economic impact payments are not taxable income to the recipient. If the IRS adjusts a taxpayer’s recovery rebate credit calculation, it will do so as a “math error adjustment.”

Are you eligible even if you lived abroad?

Generally, if you are a U.S. citizen or U.S. resident alien, you should have received an Economic Impact Payment of $1,200 ($2,400 for a joint return) in the first round and $600 in the second round (since December 2020), if you (and your spouse if filing a joint return) are not a dependent of another taxpayer and have a Social Security number valid for employment and your adjusted gross income (AGI) does not exceed:

  • $150,000 if married and filing a joint return.
  • $112,500 if filing as head of household or
  • $75,000 for eligible individuals using any other filing status
    Your payment will be reduced by 5% of the amount by which your AGI exceeds the applicable threshold above.

You may be eligible for a payment even if you are living outside the US. Nonresident aliens who file or would file Form 1040-NR or Form 1040-NR-EZ are not eligible for the payment.

You are not eligible for a payment if any of the following apply to you:

  • You may be claimed as a dependent on another taxpayer’s return (for example, a child or student who may be claimed on a parent’s return or a dependent parent who may be claimed on an adult child’s return).
  • You do not have a Social Security number that is valid for employment.
  • You are a nonresident alien.
    The following are also not eligible: a deceased individual or an estate or trust.

Typical cases of non-eligible for payment include:

  • Decedents who received an economic impact payment after death. A surviving spouse who received a payment amount based on a 2018 or 2019 jointly filed return with a spouse who died before the payment was received needs to return only the portion allocable to the decedent.
  • Nonresident aliens and resident aliens who do not have SSNs that qualify them for work in the United States.
  • Persons who can be claimed by someone else as a dependent.

If you have any doubt about the Economic Impact Payments (EIP 1 &EIP2), the stimulus checks and or the Recovery Rebate Credit, please write you question or doubt below and we will answer you as soon as possible.

12 Comments

  1. Velvet Williamson

    My son is in prison he filed 2019 tax form for non-filers and still has not

    got 1 or 2 EIP check so how can he or a family member file the recovery

    rebate tax credit.

    Thank you.

    Reply
    • Antonio Rodriguez

      He must file Form 1040 2020 to claim the Recovery Rebate Credit for both EIPs.

      Antonio

      Reply
  2. John Clark Sepulveda

    The accept button is not working. Anyhow, I’m in agreement to the terms for service. Note that, nor I or my wife received stimulus checks in 2020. Not sure I was eligible given my NR status and income level.

    Reply
  3. Antonio Rodriguez

    When filing your Form 1040 2020, you can figure out if you are elegible and in that case you can claim the Recovery Rebate Credit of both EIPs

    Reply
  4. Mary Brown

    My brother is incarcerated and hasn’t received the first, second or third Stimulus Checks..
    While in prison, his spouse died.. How should he file?

    Reply
    • Antonio Rodriguez

      He should file the Individual Tax Return of 2020 and 2021, just to calim the Recovery Rebate Credit and the check from the American Rescue Plan Act

      Reply
  5. Sarah Maestas

    I I haven’t received any stimulus check at all and when I filed my taxes they said they were going to give me 1800 back that only covers 1 stimulus so I don’t know I filed my taxes almost 3 months ago what should I do

    Reply
  6. P TIPTON

    I ALREADY FILED MY 2020 TAX RETURN AND STILL HAVE NOT RECIEVED THE EIP2 PAYMENT OF $600. SHOULD I AMMEND MY 2020 TAX RETURN?

    Reply
  7. Monica

    hi. I wasn’t suppose to get those checks, but I cashed it, and now want to return. I’m not US citizen, i live in Europe. I can’t write check and don’t have american bank acocount. How should i give back money?
    I can’t reach IRS directly, becouse the waitting time is absurd.. I already pay 60 euros for waitting..

    Reply
    • Antonio Rodriguez

      Monica,
      We do not know the reason the makes you think that you were not suposed to receive the Stimulus Checks. The IRS stated at the very beginig that those that recieve the checks based on the estimation of the previous years should keep them, even if they were not supoused to receive them based on the actual tax return of 2020 and 2021. So, without knowing the reason, it is difficult for us to suggest any action, but I am sure that the IRS has not created any procedure to retun the corresponding amounts of the Stimulus Checks.

      Reply

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