Americans who think they were eligible for one or both rounds of stimulus checks but either didn't get them or didn't receive the right amount can now claim those payments on their 2020 tax returns.
As part of the first round of $1,200 stimulus checks, 160 million payments were sent to Americans in the spring, while 147 million payments were distributed in the winter as part of the second round of $600 stimulus checks. As of February 16, "all legally permitted" payments had been issued, according to the Internal Revenue Service. Taxpayers now can only claim an outstanding payment using the Recovery Rebate Credit when filing their 2020 taxes.
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"Now as people are filing their tax return, they have the opportunity to file for the Recovery Rebate Credit," Kathy Pickering, H&R Block’s chief tax officer, told Yahoo Money. "If you didn't get the first or second stimulus, or you didn't get as much as you were entitled to, then you want to file that Recovery Rebate Credit."
The credit applies to both rounds of stimulus checks. It can lower your tax bill and potentially result in a tax refund. If you're not eligible for a stimulus payment adjustment, you don't need to fill in that part of the tax return.
A change in income may be a reason to claim the credit.
For example, if you lost your job or experienced an income drop in 2020, you may be eligible for the payment or a bigger check than the one you got. Stimulus payments were based on 2018 and 2019 tax returns and a drop in income from those years may mean you now qualify for the payments.
Taxpayers who had significant life changes may also want to look into the credit. For instance, parents who welcomed a baby in 2019 or 2020 may be able to claim the additional money available for dependents.
College students and other young adults may be eligible for the payments, too, if their parents don't claim them as a dependent on this year's tax returns, but did so in previous years.
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People who didn't have a valid Social Security number in 2018 and 2019, but received one before the due date for their 2020 taxes — April 15 or later if an extension was requested — may be eligible for the credit.
Under the CARES Act, joint filers where only one spouse had a Social Security number were ineligible for the first round of stimulus checks. Now, they can claim the first payment when filing their taxes.
If you were eligible but never received your payment because you changed your address or the IRS didn't have your banking information on file, you can also claim the credit.
Even if you don't usually file a tax return, filing your 2020 return is the only way to get the stimulus payments that have been sent so far.
How to claim it?
If you’ve received any direct payment, include the amount on your tax return when completing tax documents Form 1040 or Form 1040-SR. You can find the amount on your Notice 1444, a form that shows the amount of the Economic Impact Payment (EIP). You should’ve received Notice 1444-A for the first payment and Notice 1444-B for the second one.
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If you didn't receive the notice or can't locate the forms, you can check the amount online at the IRS website. You may also find the amount on your bank statements showing the direct deposit of the payment.
The IRS has a worksheet to help you calculate the amount you're owed, but if you use online software, the process should be automated.
When to expect it?
If you are eligible for a refund on your 2020 tax return, you'll get your part of the stimulus payment included in your 2020 tax refund. The credit won't be issued as a separate payment.
You can expect your return in three weeks if you file electronically and in eight weeks if you mail your return, according to the IRS. If the IRS identifies an error in the credit calculation, processing the return may take longer.
Denitsa is a writer for Yahoo Finance and Cashay, a new personal finance website. Follow her on Twitter @denitsa_tsekova.
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