Earlier this year, the government issued roughly 160 million Economic Impact Payments — or stimulus checks — to eligible Americans. The problem is, some people have fallen through the cracks and are still awaiting the first much-needed COVID payment.
If you are in this category and have yet to receive your check, you can claim it on your 2020 taxes. Claiming the payment you were eligible for will lower your tax bill and may result in a cash refund. You will receive it in the form of a Recovery Rebate Credit on your taxes.
Qualifications For A Recovery Rebate Credit
Individuals who are a U.S. or permanent citizen, have a social security number, make less than $99,000 a year and are not claimed as a dependent on someone else’s tax return in 2018 or 2019 likely qualify for the Recovery Rebate Credit.
The exact amount depends on your adjusted gross income. If you are filing single with an average gross income of $75,000 or are a single parent with an adjusted gross income of $112,500, you are eligible for the full amount. Also entitled to the full amount are married couples with a combined adjusted gross income of $150,000 or less.
For every $100 more than the adjusted gross income, the payment is reduced by $5 until it reaches a threshold of $99,000 for single users, $136,000 for heads of household and $198,000 for married couples filing jointly.
So it’s possible that single filers would have been eligible for $1,200 plus $500 for each qualifying dependent; and married couples filing jointly could have been eligible for $2,400 plus $500 for each qualifying dependent.
How To Claim Your Money
According to the IRS, you can claim your Recovery Rebate Credit on your 2020 Form 1040 or 1040-SR. If you received a partial payment, you will need to reference the IRS’s calculated amount from the “Notice 1444 Your Economic Impact Payment” letter when you file. You can also claim any missing payments for a dependent child.
Depending on the amount of stimulus money you’re eligible to receive, your money will either show up on the 2020 tax return as an additional refund, or the amount of tax you owe will be lowered.
We understand that most individuals find the details and nuances of tax season confusing, particularly during unprecedented years like 2020. When you are ready to file your 2020 tax return, reach out to Donohoo Accounting Services. Working with our tax professionals will save you time, frustration and headaches. We would be happy to schedule a complimentary consultation to help you get the cash relief you are entitled to. Give us a call today at 513-528-3982! For more tips and our latest updates, check us out on Facebook, Twitter or LinkedIn!