2020 Recovery Rebate Credit — Topic D: Calculating the Credit

A1. You must file a 2020 tax return to claim a Recovery Rebate Credit even if you are otherwise not required to file a tax return.

To figure the credit, you will need to know the amount of any Economic Impact Payments you received in order to claim any amount of the Recovery Rebate Credit you may be eligible for on your 2020 income tax return.

The fastest and most accurate way for you is to file is electronically where the tax software will help you figure your Recovery Rebate Credit. The Recovery Rebate Credit Worksheet in the Form 1040 and Form 1040-SR instructions can also help  determine if you are eligible for the credit.

If you need your Economic Impact Payment amounts, you can view them at IRS.gov/account. If you have questions about how to create an account or need to reset your username or password, see Secure Access: How to Register for Certain Online Self-Help Tools.

You may also refer to Notice 1444, Your Economic Impact Payment, which shows the amount of the first EIP and, the IRS is mailing Notice 1444-B which shows the amount of the second EIP.

A2. If you’re eligible, you’ll need to file a 2020 tax return and claim the Recovery Rebate Credit, even if you aren’t required to file a tax return. Line 30 on Form 1040 and 1040-SR is new this year for the Recovery Rebate Credit. To avoid refund delays, you must file a complete and accurate return.

The IRS will not calculate the Recovery Rebate Credit for people but if you make a mistake on the Line 30 amount, the IRS will calculate the correct amount of the Recovery Rebate Credit, make the correction to your tax return and continue processing your return. If a correction is needed, there may be a slight delay in processing your return and the IRS will send you a notice explaining any change made.

To calculate and claim the Recovery Rebate Credit, you’ll need the amounts of any Economic Impact Payments that you received. You can view the amounts of your first and second Economic Impact Payments through your online account. Visit Secure Access: How to Register for Certain Online Self-Help Tools for more information about how to create an account or how to reset your username or password. You can also refer to Notice 1444, Your Economic Impact Payment, which shows the amount of the first EIP and the IRS is mailing Notice 1444-B, Your Second Economic Impact Payment, which shows the amount of the second EIP.

File electronically and the tax software will help you figure your Recovery Rebate Credit. Visit IRS.gov/filing for details about IRS Free File, Free File Fillable Forms, free VITA or TCE  tax preparation sites in your community or finding a trusted tax professional. The Recovery Rebate Credit Worksheet in the Form 1040 and Form 1040-SR instructions can also help determine if you are eligible for the credit and the amount to enter on line 30.

The fastest way to get your tax refund that will include your Recovery Rebate Credit is to file electronically and have it direct deposited - contactless and free - into your financial account. You can use a bank account, prepaid debit card or mobile app for your direct deposit and will need to provide routing and account numbers.

A3. There is no need to claim the Recovery Rebate Credit or complete the worksheet if you received the full amount of the recovery rebates as Economic Impact Payments.

The Recovery Rebate Credit Worksheet will help you determine if you are eligible for the RRC and how much when filing your 2020 tax return. Completing the worksheet is not required, but it may be helpful for you to use it and keep it for your records. 

The fastest and most accurate way for you is to file is electronically where the tax software will help you figure your Recovery Rebate Credit. Visit IRS.gov/filing for details about IRS Free File, Free File Fillable Forms, free VITA or TCE  tax preparation sites in your community or finding a trusted tax professional. Have your refund direct deposited - contactless and free - into your financial account. You can use a bank account, prepaid debit card or mobile app for your direct deposit and will need to provide routing and account numbers.

A4.  Yes, you can still claim the Recovery Rebate Credit when you file your tax return by the extended due date of your return. An extension to file request must be submitted by May 17, 2021 along with payment of any tax you owe. Do not file an incomplete return to claim the Recovery Rebate Credit since this may cause you to later amend it and possibly owe if you received more credit than you are allowed. 

A5.  The only way to get a Recovery Rebate Credit is to file a 2020 tax return even if you are otherwise not required to file a tax return.  The fastest and most accurate way for you is to file is electronically where the tax software will help you figure your Recovery Rebate Credit. Visit IRS.gov/filing for details about IRS Free File, Free File Fillable Forms, free VITA or TCE  tax preparation sites in your community or finding a trusted tax professional.  The Recovery Rebate Credit Worksheet in the Form 1040 and Form 1040-SR instructions can also help  determine if you are eligible for the credit.

Anyone with income of $72,000 or less can file their Federal tax return electronically for free through the IRS Free File Program. The fastest way to get your tax refund is to file electronically and have it direct deposited - contactless and free - into your financial account. You can use a bank account, prepaid debit card or mobile app for your direct deposit and will need to provide routing and account numbers.

See the Claiming the Recovery Rebate Credit if you aren’t required to file a tax return FAQ section.

A6.  If your spouse died before January 1, 2020, and you received one or both Economic Impact Payments that included an amount for your deceased spouse, return the decedent’s portion of the payment as described in Does someone who died qualify for the payment?  If you did not get the full amounts for the Economic Impact Payments, you may be eligible for the Recovery Rebate Credit. Do not include your deceased spouse’s portion of the Economic Impact Payment (no more than $1,200 for the first Economic Impact Payment and $600 for the second Economic Impact Payment) on the worksheet when filing your 2020 tax return.  You should only include your portion of the payment and the amount for any qualifying children on the worksheet.  You are not entitled to a Recovery Rebate Credit for an individual who died prior to January 1, 2020.

A7. If you are filing your 2020 return with your deceased spouse as married filing jointly, you should enter $2,400 on line 5 of the worksheet and $1,200 on line 8 of the worksheet (if you answered “Yes” to question 2 or 3 in the worksheet) . Also include the amount of any Economic Impact Payments you both received on lines 16 and 19 of the worksheet.

Recovery rebate credits may be claimed for individuals who died in 2020 or 2021 when filing the decedent’s 2020 tax return. This includes someone who filed joint tax returns with a spouse who died in 2020 or 2021. Please refer to the Form 1040 and 1040-SR instructions for more information.

A8.  Yes. If your first Economic Impact Payment was offset for past due child support, you are still treated as receiving that payment and should include it on the worksheet when calculating a Recovery Rebate Credit.

A9.  When you answer the tax software questions or complete the Recovery Rebate Credit Worksheet for a joint tax return with your spouse, enter the combined Economic Impact Payment amounts you and your spouse received.  If you did not receive an Economic Impact Payment and you and your spouse meet the eligibility requirements based on your 2020 tax return, you may be entitled to an additional amount as the Recovery Rebate Credit.

Anyone with income of $72,000 or less can file their Federal tax return electronically for free through the IRS Free File Program. The fastest way to get your tax refund is to file electronically and have it direct deposited - contactless and free - into your financial account. You can use a bank account, prepaid debit card or mobile app for your direct deposit and will need to provide routing and account numbers.

A10.  The only way to get a Recovery Rebate Credit is to file a 2020 tax return even if you are otherwise not required to file a tax return.  The fastest and most accurate way for you is to file is electronically where the tax software will help you figure your Recovery Rebate Credit. Visit IRS.gov/filing for details about IRS Free File, Free File Fillable Forms, free VITA or TCE  tax preparation sites in your community or finding a trusted tax professional.  The Recovery Rebate Credit Worksheet in the Form 1040 and Form 1040-SR instructions can also help  determine if you are eligible for the credit.

Anyone with income of $72,000 or less can file their Federal tax return electronically for free through the IRS Free File Program. The fastest way to get your tax refund is to file electronically and have it direct deposited - contactless and free - into your financial account. You can use a bank account, prepaid debit card or mobile app for your direct deposit and will need to provide routing and account numbers.

A11. No, the payments are not includible in your gross income. Therefore, you will not include the payments in your taxable income on your Federal income tax return or pay income tax on your payment.  They will not reduce your refund or increase the amount you owe when you file your 2020 Federal income tax return.

These payments will not affect your income for purposes of determining eligibility for federal government assistance or benefit programs.

A12.  When joint Economic Impact Payments are issued to two spouses, each spouse must claim half the payment when calculating the Recovery Rebate Credit. Each spouse must enter half the payment on the Recovery Rebate Credit Worksheet. You can view the amounts of your first and second Economic Impact Payments through your online account. Visit Secure Access: How to Register for Certain Online Self-Help Tools for more information about how to create an account or how to reset your username or password. You can also refer to your Notice 1444, Your Economic Impact Payment, which shows the amount of the first EIP and, the IRS is mailing Notice 1444-B which shows the amount of the second EIP.

A13.  When a joint Economic Impact Payment is issued to two spouses, each spouse is treated as receiving the payment and each spouse must enter half the payment on the Recovery Rebate Credit Worksheet.

A14.  No, you must reduce your Recovery Rebate Credit amount by the amounts of Economic Impact Payments that were loaded on the EIP cards. Whether you have activated your card is not relevant to the requirement that your Recovery Rebate Credit amount be reduced by the amount of the Economic Impact Payments. 

Your EIP card will continue to be available for use once you properly activate it.  If not activated, no action will be taken on the card until it expires in 2023.  The funds will remain valid on the card and accessible once you activate the card.  The funds will not be returned to the IRS, unless you return the card to MetaBank®. If your card is lost or destroyed, you can request a replacement by contacting MetaBank®, N.A., at 800-240-8100 (option 2 from the main menu).

For more information, visit EIPcard.com.

A15.  Maybe. When a joint Economic Impact Payment is issued to two spouses, each spouse must claim half the payments when calculating the Recovery Rebate Credit. So, if your filing status for 2020 changed to or from Married Filing Jointly or if you remarried in 2020, each spouse should include their half of the Economic Impact Payments when completing the worksheet to determine the amount of the Recovery Rebate Credit. 

A16. Yes, if you meet the eligibility requirements for the Recovery Rebate Credit, the amount of your credit may include up to $1,100 for a qualifying child you are claiming as a dependent on your 2020 return. The child must be under the age of 17 at the end of 2020 to be a qualifying child for the credit.

When you answer the tax software questions or complete the Recovery Rebate Credit Worksheet, include only the Economic Impact Payment amounts issued to you (and your spouse, if filing a joint return for 2020). Do not include Economic Impact Payment amounts issued to anyone else, even if their payments included amounts for an individual who is your qualifying child for 2020.

Anyone with income of $72,000 or less can file their federal tax return electronically for free through the IRS Free File program. The fastest way to get your tax refund is to file electronically and have it direct deposited - contactless and free - into your financial account. You will need to provide the routing and account numbers no matter which option you choose - bank accounts, prepaid debit cards or mobile apps.

A17. A qualifying child is a child who meets the following conditions:

  • Relationship to the individual who is eligible for the credit: The child is your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of them (for example, grandchild, niece or nephew).
  • Child's age: The child was under age 17 on December 31, 2020.
  • Dependent of the individual who's eligible for the credit: The child’s claimed as a dependent on your 2020 tax return.
  • Child’s citizenship: The child’s a U.S. citizen, U.S. national or U.S. resident alien.
  • Child's residency: The child lived with you for more than half of 2020.
  • Support for child: The child didn’t provide over half of own support in 2020.
  • Child's tax return: The child doesn’t file a joint return for the 2020 tax year (or files it only to claim a refund of withheld income tax or estimated tax paid).

To be claimed for the Recovery Rebate Credit, the child must have a Social Security number that is valid for employment issued by the Social Security Administration before May 17, 2021 (or October 15, 2021, if there is an approved extension to file) or have an Adoption Taxpayer Identification Number issued by the IRS.

A18.  The Economic Impact Payments were advance payments of the Recovery Rebate Credit. To issue the Economic Impact Payments as quickly as possible, applicable laws allowed the IRS to use your 2019 tax information. The IRS used your 2018 tax return information for the first Economic Impact Payment if your 2019 tax return was not on file.
Generally, if you had the same number of qualifying children on your 2019 tax return that you’ll have on your 2020 tax return – even if they are not the same children – it’s likely we already  issued you the full amount of the Recovery Rebate Credit as two Economic Impact Payments.

If you were issued the full amounts of Economic Impact Payments, you won’t be eligible to claim the Recovery Rebate Credit for your child born in 2020 even though that child is a qualifying child for the credit.

You were issued the full amount of the Recovery Rebate Credit if

  • the first Economic Impact Payment was $1,200 ($2,400 if married filing jointly for 2020) plus $500 for each qualifying child you had in 2020; and
  • the second Economic Impact Payment was $600 ($1,200 if married filing jointly for 2020) plus $600 for each qualifying child you had in 2020.

Example:

For 2019, you filed a joint tax return with your spouse and claimed two dependents who were qualifying children for the Economic Impact Payments. Based on your 2019 information, your adjusted gross income was less than $150,000 and therefore you received $3,400 for the first Economic Impact Payment and $2,400 for the second Economic Impact Payment. 

In 2020, you had a baby and one of the children who was a qualifying child for the Economic Impact Payments turned 17 years old. The 17-year old is no longer a qualifying child for the Recovery Rebate Credit. For 2020, you file a joint tax return with your spouse, and claim three dependents but only the two children under age 17 are your qualifying children for the Recovery Rebate Credit. Even though your adjusted gross income for 2020 is less than $150,000, you are not entitled to the Recovery Rebate Credit for your qualifying child born in 2020 because you received the maximum amount as Economic Impact Payments based on two qualifying children.

When calculating the Recovery Rebate Credit, using tax prep software or the Recovery Rebate Credit Worksheet in the Form 1040/1040-SR Instructions can help you determine if you may be eligible to claim a Recovery Rebate Credit. To claim the credit, you must file a 2020 tax return even if you are otherwise not required to file.