Investments

Optima Tax Relief looks into the Recovery Rebate Tax Credit

The Recovery Rebate Credit was authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Those who were eligible for the Economic Impact Payment, also known as the stimulus payment, but did not receive or only received a portion of the total amount in 2020, now have the option to claim the Recovery Rebate Credit on their 2020 tax return.

Optima Tax Relief provides information taxpayers need to know before claiming the Recovery Rebate Credit.

How do I qualify for the Recovery Rebate Credit?

The Recovery Rebate Credit is based off:

  • Individual’s filing status
  • Your adjusted gross income in 2018 or 2019
  • The number of dependents that received the full amount on the initial stimulus payment in 2020

If a taxpayer has received their full amounts from the stimulus payments, then they will not need to complete any information on their 2020 taxes.

For those who did not receive the full amount of their stimulus check, they have the option to claim the Recovery Rebate Credit for any recovery rebate amount that is more than the stimulus payment received. This means that taxpayers may be able to increase their refund or lower the total tax amount that they owe.

Do I qualify for the Recovery Rebate Credit?

Generally, an individual can claim the Recovery Rebate Credit if they:

  • Were a U.S. citizen or U.S. resident alien in 2020.
  • Were not claimed as a dependent.
  • Have a Social Security number valid for employment that was issued before the due date of your 2020 tax return.
  • Your 2020 Tax Information makes you eligible, but you were not issued a stimulus check in 2020.
  • You are single, your adjusted gross income is less than $75,000 and your stimulus payment was less than $1,200.
  • You are married and filed jointly, your adjusted gross income is less than $150,000 and your stimulus payment was less than $2,400.
  • You didn’t receive $500 for each qualifying child.

What information do I need in order to claim the Recovery Rebate Credit?

Taxpayers who did not receive the full stimulus payment and want to claim more through the Recovery Rebate Credit on their 2020 taxes, will need to know the amount of stimulus payment that was issued in 2020.

The IRS issued Notice 1444 which reflects the amount that was issued to an individual before any offsets in 2020, this notice needs to be used when a taxpayer is filing their taxes.

Related posts

5 Positive Sayings That Will Drive Your Business to the Top

Rebecca wilson

The Things That Killing Your Ability to Focus

John Mcneotis

How Companies Can Boost Business By Using Pay By Text Virtual Terminals For ‘Buy Here, Pay Here’ Payment Collection

John Mcneotis

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy