What is a Recovery Rebate Tax Credit?

Tax Deductions and Credits Learn what a recovery rebate tax credit is

With all the information covering the stimulus checks and payments you may have heard the phrase Recovery Rebate Credit thrown around and are wondering, “what is the Recovery Rebate Credit?” or “Do I qualify for the Recovery Rebate Credit?” 

Don’t worry about knowing answers to these questions. We have you covered and are here to share some information regarding Recovery Rebate Credits so you can feel more informed and possibly save money on your 2020 or 2021 taxes.

What is a Recovery Rebate Credit?

The Recovery Rebate Credit is a credit that was authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. So, if you were eligible for an Economic Impact Payment (EIP), commonly referred to as a stimulus payment, but did not receive one or you received less than the full amount as an advanced payment in 2020 then you can claim the Recovery Rebate Credit on your 2020 tax return. For payments made in 2021, you can claim the Recovery Rebate Credit on your 2021 tax return. 

If you did not receive a first or second stimulus check or received less than the full amount you may be eligible for the 2020 Recovery Rebate Credit (RRC). 

Generally, the credit can increase your refund amount or lower the taxes you may owe. When the IRS processes your 2020 tax return, if you are claiming the Recovery Rebate Credit, the IRS determines your eligibility and amount based on your 2020 tax return information. 

What does the Recovery Rebate Have to do With My Stimulus Payment? 

Depending on your filing status, your adjusted gross income in 2018 or 2019, and the number of dependents you have, you may have received the full amount of the first stimulus payment in 2020 ($1,200 single, $2,400 married filing jointly) plus $500 for each qualifying child and the full amount of the second stimulus payment ($600 single, $1,200 married filing jointly) plus $600 for each qualifying child. If that is the case, you do not need to complete any information on your 2020 taxes.

If you did not receive the full amount of the third stimulus payment in 2021 ($1,400 single, $2,800 married filing jointly) plus $1,400 for each qualifying dependent under the American Rescue Plan then you may be able to claim the Recovery Rebate Credit when you file your 2021 tax return. This is the return you will file in 2022. 

Do I qualify for a Recovery Rebate Tax Credit? 

Generally you are eligible to claim the Recovery Rebate Credit if you:

  • 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 is issued before the due date of your 2020 tax return.

You can take the Recovery Rebate Credit for any recovery rebate amount that is more than your stimulus payments you received in 2020 if you did not receive the full amounts.

The IRS figures out the amount of the Recovery Rebate Credit similar to how they calculated your stimulus payment, except your credit eligibility and the amount of the credit are based on new information from your 2020 tax return (that will be filed in 2021) instead of using your 2018 or 2019 information for the first and second stimulus. For the third stimulus payment, your credit will be based on information in your 2021 tax return (that will be filed in 2022). 

Some common possible reasons why the IRS corrected the credit amount are: 

  • The taxpayer was claimed as a dependent on someone else’s 2020 tax return 
  • The taxpayer did not provide a social security number that is valid for employment purposes
  • The qualifying child was age 17 or older on January 1, 2020 
  • A math error relating to the calculating adjusted gross income and any stimulus check amounts already received 

If there’s a mistake with the stimulus credit amount, the IRS will calculate the correct amount and make the correction and continue to process the tax return. If a correction is needed, this will cause a delay in processing the tax return and the IRS will send the taxpayer a letter or notice explaining any change. 

So, you may be able to claim the Recovery Rebate Credit for the first or second stimulus payments if one of the following applies to you: 

  • 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 
  • Or if you didn’t receive $500 for each qualifying child 

Keep in mind that these amounts noted above phase out if your adjusted gross income for 2020 exceeds $150,000 if you are married filing a joint return, $112,500 if you are using the head of household filing status, or $75,000 if you are using single or any other filing status. 

For the third stimulus payment, you may be able to claim the Recovery Rebate Credit if one of the following applies to you: 

  • Your 2021 Tax Information makes you eligible but you were not issued a stimulus check in 2021
  • You are single, your adjusted gross income is less than $80,000 and your stimulus payment was less than $1,400
  • You are married and filed jointly, your adjusted gross income is less than $160,000 and your stimulus payment was less than $2,800 
  • Or if you didn’t receive $1400 for each qualifying child 

If I want to Claim the Recovery Rebate Credit What Information Will I Need?

If you didn’t receive the full stimulus payment and want to claim more in the form of a Recovery Rebate Credit on your 2020 taxes you will need the amount of stimulus payment you were issued in 2020. The IRS issued Notice 1444 and Notice 1444B that shows the amount you were issued before any offsets in 2020 so have that form in front of you when you sit down to do your taxes.

I’m a College Student. Can I Claim the Recovery Rebate Credit?

If you meet the eligibility requirements and you are not claimed as a dependent on your parents’ 2020 taxes or anyone else’s then you can file a tax return and claim the Recovery Rebate Credit if you didn’t receive a stimulus payment. Many college students worked in 2020 to help make ends meet, whether it was for an employer or a side gig. If you had federal taxes withheld from your pay you may be able to get some of your withholding back in the form of a tax refund, claim education tax benefits, and boost your refund with the Recovery Rebate Credit.

Do I Claim the Recovery Rebate Credit for the Additional Stimulus I Didn’t Receive for My Dependents?

Yes, if you did not receive the additional $500 per qualifying child in your first stimulus check or the additional $600 per qualifying child in your second stimulus check, you can claim the additional stimulus amounts in the form of a Recovery Rebate Credit on your 2020 tax return. If you did not receive the additional $1,400 per qualifying in your third stimulus check, you can claim the additional stimulus amounts in the form of a Recovery Rebate Credit on your 2021 tax return (filed in 2022). 

TurboTax Has You Covered

Don’t worry about knowing these tax provisions. TurboTax has COVID-19 specific guidance to help you with impacts that happened this year and through coronavirus relief. TurboTax will ask you upfront if you received a stimulus payment and help you claim the Recovery Rebate Credit and other tax deductions and credits you’re eligible for based on your entries.

If you have questions, you can connect live via one-way video to a TurboTax Live tax expert with an average 12 years experience and get your tax questions answered. TurboTax Live tax experts are available in English and Spanish, year round and can also review, sign, and file your tax return or you can fully hand over your taxes with TurboTax Live Full Service. All from the comfort of your home.

TurboTax will continue to keep you updated on coronavirus relief as more details and guidance come out. Be sure to check back with the TurboTax Blog and our TurboTax Coronavirus Tax Center for the latest information.

Comments (29) Leave your comment

  1. Hello

    I need help with the following scenario.

    Brother was claimed as a dependent on parent 2019 taxes. He is over 17 and was a part time student so parent did not get any extra for the qualifying child. He worked all of 2020 and will file taxes independently and no one will claim him. Would he be eligible for the recovery rebate credit?

    1. Hi Carlos,

      Based on the information you provided, if your brother files his 2020 tax return independently and is not going to be claimed on someone else’s tax return and is eligible for the recovery rebate credit he will be able to claim the credit when completing his 2020 tax return. TurboTax will ask simple question when completing the return to make sure all eligible credits are claimed.

      Hope this helps.
      Sincerely,
      Katharina Reekmans

  2. If you had a baby in 2020, will people be able to file to collect $500 from the first and $600 dorm the second on their taxes?

    1. Hi Chauntelle,

      The IRS is responsible for determining taxpayer eligibility for receiving a stimulus and, if a taxpayer is eligible, how and when the stimulus payments will be delivered to them.

      According to the IRS, they will issue payments using the most recent information they have on file, likely from your 2019 tax return. Therefore stimulus payments will likely not include a payment for a child born in 2020. But you can use the Recovery Rebate Credit when you file your 2020 tax return if you were eligible to recover the first and second additional stimulus payment for that qualifying child born in 2020.

      Hope this helps.
      Best,
      Katharina Reekmans

  3. I received my first stimulus check thru my bank account,But my payment portal said this one was sent thru the mail on Jan 6.Nothing has changed .I don’t understand,

  4. I changed my bank info and my second stimulus got sent to a bank account that is closed. How do I claim the $600 on my tax returns?

  5. So I have not received both first ($1,200) and second ($600) stimulus checks. I am eligible to receive the stimulus checks since I had no income during 2020 and was not claimed as a dependent on someone else’s return. However, when I tried to claim Recovery Rebate Credit on my return through Turbo Tax, I only get $1,200. Will Turbo Tax update the amount later possibly? or maybe I need to wait until I file 2021 return to claim $600 since the second stimulus check is being distributed in 2021 unlike the first stimulus check that was distributed in 2020?

  6. When will turbotax update to reflect those of us who have to claim the recovery credit because we were not chosen to receive the direct deposit now but have to claim the credit on our taxes. Currently turbotax online does NOT walk you through claiming the credit for the second payment …only the first..so no, turbotax does not allow you to file now, the program is not updated correctly and what about those who are not aware of this issue or never questioned the process they go through on turbotax…they are losing money….

  7. Hello,

    I did not receive the most recent $600 stimulus, and have qualified for it, but Turbo Tax is saying that $1,200 (the first stimulus) is the correct amount I am eligible for and not anything more. How do I claim the $600 I am eligible to still receive?

  8. I received the relief money the first time and have received the second go around. Nothing has changed for me. Unsure why I haven’t received my check.

  9. How come I got the first stimulus check for filing jointly with 1 dependent. But the 2nd round the IRS says on the Get Pmt page they are checking things out and I might not qualify. That makes no sense

  10. How to i get my stimulus check that was deposit from IRS to turbo tax account instead of my bank account on file.

  11. We didn’t get the 2nd stimulus payment but we are eligible for it. Turbotax says we’ve gotten everything already from the 1st payment and won’t let me file the rebate credit. It only lists the information from the 1st payment.

  12. I never got the first or second stimulus payment and fed my taxes with Turbo Tax every year for the last 7 years. I only make $26k a year and claim as single no dependents. I had the turbo tax card from 2017 that was issued but no payment and no letters. I owe back taxes, so if I have to file my stimulus as a rebate and OWE taxes, would the Rebate Credit be applied to the taxes I owe, essentially giving the “stimulus” BACK to the US Govt, although anyone else who owed taxes, and got one or both payments, without having the payments held back? To clarify my question, rather than IRS issuing a actual rebate check for the missed stimulus, if you owe back taxes, the IRS will apply the rebate to back taxes, correct?

    If this is true, what legal standard would apply here to argue “fairness and equally” for someone who was eligible but the government made mistakes that caused a person to not get a stimulus payments, but now are forced to apply their money to taxes owed vs. others who could spend it as they wanted (even if they too owed back taxes).

    Thank you.

  13. I never received the first nor the second stimulus check. What do I do? Worked for NASA and retired on disability.

  14. My son was my dependent in 2019 but not in 2020. Can he get the stimulus money he missed out on, once he files his taxes for 2020?

  15. What are the guidelines for your children to receive stimulus payments? Why would my 17 year old junior not receive a payment? Now she’s 18 and a senior and I’m assuming I will not receive a payment for her this time around either. Just curious.

    Thank you!
    Kristin

  16. I got married in March 2020 how do I file my taxes and will my husband get the stimulus bc I have him down under dependent on my taxes? He hasn’t got the first one and now I don’t know if he will get this second one either.

    1. Hi Misty,
      The IRS is responsible for determining taxpayer eligibility for receiving a stimulus and, if a taxpayer is eligible, how and when the stimulus payments will be delivered to them. According to the IRS, they will issue payments using the most recent information they have on file, likely from your 2019 tax return.

      If you were married in 2020, you will file your 2020 taxes as either married filing jointly or married filing separately. Most people benefit from filing married filing jointly because there are more tax benefits when you file married filing jointly. If your husband did not receive the first stimulus he can claim a Recovery Rebate Credit when you file your 2020 taxes. TurboTax will guide you through this to make sure you get every dollar you deserve.

      I hope this helps.

      Best,
      Lisa Greene-Lewis

  17. I have the turbo tax and so far haven’t seen where to enter information regarding recovery rebate credit as my 2020 income is less than 2019

  18. This is great information but why are they going by 2018 and 2019 taxes. My daughter graduated from high school in 2019 so I carried her on my taxes. However she got her own place in November 2019 and has been working the entire year. She was not eligible bc I carried her. In 2020 she and her fiancé has had a baby and maintained. I will not be carrying her on my 2020 taxes because she didn’t live with me. If they are going by 2019 taxes her family which needs the stimulus will not get anything. How are they making an exception for these situations? Are they going to created an app that will ask specific questions that will help these situations?

    1. Hi Wanda,

      Under the eligibility rules by the IRS, the child must be under the age of 17 at the end of the year for the tax return on which the IRS bases the payment in order to receive the additional payment. Any dependent who is over age 17 and claimed on someone else’s tax return is not be eligible for the additional stimulus check.

      Hope this helps.
      Best,
      Katharina Reekmans

  19. Hi Katherine, I am single and made over 100,000 dollars in 2019. Therefore I did not receive the first stimulus check of 1,200 dollars. This year I have made less than 40,000 dollars. Am I going to be eligible for the rebate credit for either the first or second stimulus payments. Thanks

    1. Hi David,

      Based on the information you provided, when you file your taxes for the 2020 return year you will be able to use the rebate recovery credit for the second stimulus payment. The maximum adjusted gross income for a single taxpayer is $75,000 and the information for the first stimulus payment was based on information from 2019 tax return.

      Hope this helps.
      Sincerely,
      Katharina Reekmans

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