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This article discusses Economic Impact Payments/RRC and how to enter them on their respective returns.
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What is an Economic Impact Payment?
Economic Impact Payments also called stimulus checks, were one-time direct payments paid to qualifying individuals by the federal government during COVID by the passage of the CARES Act (2020) and , the Consolidated Appropriations Act (2021), and the American Rescue Plan Act (2021).
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When Were The EIP Payments Issued?
EIP 1 ($1,200 per taxpayer/spouse, $500 for qualifying children): Created by the CARES ACT in March of 2020 and issued shortly afterAct (2020), issued April 2020. This had to be claimed on a 2020 return prior to May 17, 2024.
EIP 2 ($600 per taxpayer/spouse, $600 for qualifying children): Created By by the Consolidated Appropriations ACT in December of 2020 and issued shortly afterAct (2021), issued January 2021. This had to be claimed on a 2020 return prior to May 17, 2024.
EIP 3 ($1,400 per qualifying person): Created by the American Rescue Plan Act (2021), issued March 2021. This has to be claimed on a 2021 return prior to April 15, 2025.
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How Do I Know If I Received Economic Impact Payment 1 or 2?
Taxpayers can check the status of their EIP's in their online IRS account
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How Much Was The First Economic Impact Payment?
Without regards to phase-out thresholds the payment amounts were as follows:
$1,200 for each taxpayer ($2,400 for MFJ)
$500 for each qualifying child (under 17)
Stimulus Phase-Out Ranges
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using the IRS instructions below.
”Your online account: This is an online IRS application that allows you to securely access your individual account information. The amounts of your Economic Impact Payments are found under the Tax Records tab/page. The Tax Records tab/page will show two separate amounts: the amount of your first economic impact payment (some received multiple payments so the amount shown will be the total) and the amount of your second payment. Even if you and your spouse received joint payments, your accounts online will show each spouse’s portion of the joint payments. Therefore, you and your spouse will need to sign into your own account to retrieve your separate amounts” (https://www.irs.gov/newsroom/2020-recovery-rebate-credit-topic-f-finding-the-first-and-second-economic-impact-payment-amounts-to-calculate-the-2020-recovery-rebate-credit).Their IRS notice 1444 (1st payment), 1444-B (2nd payment), or 1444-C (3rd payment).
By requesting an account transcript for 2020 (1st and 2nd payments) or 2021 (3rd payment) at 800-908-9946 or by submitting IRS Form 4506-T.
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Can I Still Claim the RRC?
Taxpayers had until May 17, 2024 to claim missing EIP payments 1 and 2 on their 2020 tax returns.
Taxpayers have until May 15, 2025 to claim missing EIP payment 3 on their 2021 tax return.
See IR-2024-60 for more information.
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Stimulus Phase-Out Ranges
EIP 1 and 2 Phaseout Ranges:
The stimulus payment amount begins to be reduced when an individual’s AGI reaches the following:
$75,000 for single filers (reduced to zero with income over $80,000)
$150,000 for married filing joint filers (reduced to zero with income over $180,000)
$112,500 for Head of household filers (reduced to zero with income over $120,000)
How Much Was The Second Economic Impact Payment?
Without regards to phase-out thresholds the payment amounts were as follows:
$600 ($1,200 for MFJ)
$600 for each qualifying child (under 17)
Stimulus Phase-Out Ranges
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(Single/MFS)
$112,500 (HOH)
$150,000 (MFJ)
The stimulus payment will be $0 if a taxpayer’s AGI reaches the following and they have no qualifying children:
*For individuals with qualifying children, these total-phaseout amounts increase by $10,000 for each qualifying child.
$99,000 (Single/MFS)
$136,500 (HOH)
$198,000 (MFJ)
EIP 3 Phaseout Ranges:
The stimulus payment amount begins to be reduced when an individual’s AGI reaches the following:
$75,000 for single filers (reduced to zero with income over $80,000(Single/MFS)
$112,500 (HOH)
$150,000 for married filing joint filers (reduced to zero with income over $180,000)$112,500 for Head of household filers (reduced to zero with income over $120,000(MFJ)
The stimulus payment will be $0 if a taxpayer’s AGI reaches the following:
$80,000 (Single/MFS)
$120,000 (HOH)
$160,000 (MFJ)
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Completing The Recovery Rebate Credit Worksheet
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When completing a 2020 or 2021 tax return, you must complete the RRC Worksheet , or select the box on 1040 Line 30 that no worksheet entries are needed.
Only select the no entries needed box, if the taxpayer received the full amount of stimulus for everyone on the return, and did not have any new children born in tax year 2020.
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Entering Recovery Rebate Credit On A 2020 Tax Return
Our tax software will assist you with the calculation of this credit, by having you complete the Recovery Rebate Credit Worksheet. You can access this worksheet through the Verify, or to determine if the taxpayer is eligible to receive any Recovery Rebate Credit.
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Access the RRC Worksheet by selecting worksheets from 1040, Line 30.
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Enter the amount of EIP received, in
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the correct EIP section for the taxpayer and the spouse.
If the taxpayer received no EIP, checkmark the no stimulus received boxes as needed.
2020 Return EIP 1 and EIP 2
*This had to be claimed on a 2020 return prior to May 17, 2024.
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2021 Return EIP 3
*This has to be claimed on a 2021 return prior to April 15, 2025.
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Upon completing the Recovery Rebate Credit Worksheet you can view the amount of the taxpayer's Recovery Rebate Credit on 1040, Line 30. |
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