2021 Recovery Rebate Credit — Topic C: Eligibility for claiming a Recovery Rebate Credit on a 2021 tax return

 

These FAQs were released to the public in Fact Sheet 2022-04 PDF, January 13, 2022.

If you didn't get the full amount of the third Economic Impact Payment, you may be eligible to claim the 2021 Recovery Rebate Credit and must file a 2021 tax return – even if you don't usually file taxes - to claim it. Your 2021 Recovery Rebate Credit will reduce any tax you owe for 2021 or be included in your tax refund.

If your income is $73,000 or less, you can file your 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 have your refund direct deposited into your bank account, prepaid debit card or mobile app and will need to provide routing and account numbers.

If you didn't get the full amount of the first and second Economic Impact Payments, you may be eligible to claim the 2020 Recovery Rebate Credit and must file a 2020 tax return – even if you don't usually file taxes - to claim it.

A1. The eligibility requirements for the 2021 Recovery Rebate Credit are the same as they were for the third Economic Impact Payments, except that the credit eligibility and amount are based on your 2021 tax year information. Third Economic Impact Payments were based on your 2019 or 2020 tax year information.

If you didn’t qualify for third Economic Impact Payment or did not receive the full amount, may be eligible to claim the 2021 Recovery Rebate Credit based on your 2021 tax information. If you received the full amount for the third Economic Impact Payment, you won’t need to include any information about it when you file your 2021 tax return.

You received the full amount of your third Economic Impact Payment if the total amount was:

  • $1,400 for an eligible individual who has a valid Social Security number (SSN) ($2,800 for married couples filing a joint return if both spouses have a valid SSN or if one spouse has a valid SSN and one spouse was an active member of the U.S. Armed Forces at any time during the taxable year) plus
  • $1,400 for each qualifying dependent who has a valid SSN or Adoption Taxpayer Identification Number (ATIN) issued by the IRS

Generally, if you were a U.S. citizen or U.S. resident alien in 2021, you were not a dependent of another taxpayer, and you either have a valid SSN or claim a dependent who has a valid SSN or ATIN, you are eligible to claim the 2021 Recovery Rebate Credit.  You may also be eligible if you file a joint return with your spouse, you or your spouse were a U.S. citizen or U.S. resident alien in 2021, and either you, your spouse, or both of you, have a valid SSN or you claim a dependent who has a valid SSN or ATIN.

Your credit amount will be reduced by the amount of your third Economic Impact Payment. It is then reduced if the adjusted gross income (AGI) amount on line 11 of your 2021 Form 1040 or Form 1040-SR is more than: 

  • $150,000 if married and filing a joint return or filing as a qualifying widow or widower
  • $112,500 if filing as head of household or
  • $75,000 for all others.  

No credit is allowed when AGI is at least the following amount:

  • $160,000 if married and filing a joint return or if filing as a qualifying widow or widower
  • $120,000 if filing as head of household or
  • 80,000 for all others.

For example, a single person with no dependents and an AGI of $77,500 will have a maximum credit of $700 (half the full amount). Married taxpayers who file a joint return that claims two qualifying dependents and an AGI of $155,000 will have a maximum credit $2,800 (again, half the full amount).

You aren’t eligible to claim the 2021 Recovery Rebate Credit if any of the following apply:

  • You could be claimed as a dependent on another taxpayer’s 2021 tax return
  • You’re a nonresident alien.
  • You don’t have a valid SSN issued to you by the due date of your tax return and you don’t claim a dependent who has a valid SSN or ATIN.

Also, estates, trusts, and individuals who died before January 1, 2021 do not qualify for the 2021 Recovery Rebate Credit.

If your income is $73,000 or less, you can file your 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 have your refund direct deposited into your bank account, prepaid debit card or mobile app and will need to provide routing and account numbers.

A2. If you were not eligible for the full third Economic Impact Payment, you may be eligible to claim the 2021 Recovery Rebate Credit since it’s based on your 2021 tax return information. Third Economic Impact Payments were based on your 2019 or 2020 tax information.

Factors that may affect eligibility for the 2021 Recovery Rebate Credit include:

Income change: Some people may have received less than the full third Economic Impact Payment because their adjusted gross income was too high. Lower income in 2021 could make you eligible to claim the 2021 Recovery Rebate Credit.

Qualifying dependent: If an individual became your dependent in 2021, including by birth or adoption, you may be eligible to claim the 2021 Recovery Rebate Credit for the dependent on your 2021 tax return that you file in 2022.

No longer a dependent: Individuals who were claimed or could be claimed as a dependent on someone else’s tax return for 2019 or 2020 may now be eligible if they can’t be claimed as a dependent on someone else’s tax return for 2021.

Social Security number: Individuals who did not have a Social Security number in 2021 but are issued one by the due date of their 2021 tax return (including an extension if the extension was requested by the due date) may now be eligible.

You’ll claim the 2021 Recovery Rebate Credit when you file your 2021 tax return.

If your income is $73,000 or less, you can file your 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 have your refund direct deposited into your bank account, prepaid debit card or mobile app and will need to provide routing and account numbers.

A3. No, if you qualified for a third payment based on your 2019 or 2020 tax return, the law doesn’t require you to pay back all or part of the payment you received based on the information reported on your 2021 tax return.

A4. Generally, yes. One eligibility requirement for the 2021 Recovery Rebate Credit is that you must have a valid SSN or claim a dependent who has a valid SSN or Adoption Taxpayer Identification Number issued by the IRS.

A valid SSN for the 2021 Recovery Rebate Credit is one that is issued by the Social Security Administration by the due date of your 2021 tax return (including an extension if you requested the extension by the due date).

If you file jointly with your spouse and only one individual has a valid SSN, you can claim up to $1,400 for the spouse who has a valid SSN and up to $1,400 for each qualifying dependent claimed on the tax return.

If neither spouse has a valid SSN, you can claim only up to $1,400 for each qualifying dependent claimed on the tax return.

Active Military: If either spouse is an active member of the U.S. Armed Forces at any time during the taxable year, only one spouse needs to have a valid SSN for the couple to receive up to $2,800 for themselves, plus up to $1,400 for each qualifying dependent.

A5.  If you file jointly with your spouse and only one individual has a valid SSN, you can claim up to $1,400 for the spouse who has a valid SSN and up to $1,400 for each qualifying dependent claimed on the tax return.

If neither spouse has a valid SSN, you can claim only up to $1,400 for each qualifying dependent claimed on the tax return.

A valid SSN for the credit is one that is issued by the Social Security Administration by the due date of your tax return (including an extension if you request the extension by the due date).

Active Military: If either spouse is an active member of the U.S. Armed Forces at any time during the taxable year, only one spouse needs to have a valid SSN for the couple to receive up to $2,800 for themselves, plus up to $1,400 for each qualifying dependent.

A6. If either spouse is an active member of the U.S. Armed Forces at any time during the taxable year, only one spouse needs to have a valid SSN for the couple to claim up to $2,800 for themselves, plus up to $1,400 for each qualifying dependent

If spouses file separately, the spouse who has an SSN may claim the 2021 Recovery Rebate Credit; the other spouse without a valid SSN will not qualify unless claiming a qualifying dependent on the tax return.

A7. If you can be claimed as a dependent on someone else’s 2021 tax return, then you cannot claim a dependent on your tax return. You also can’t claim the 2021 Recovery Rebate Credit.

The 2021 Recovery Rebate Credit includes up to an additional $1,400 for each qualifying dependent you claim on your 2021 tax return. A qualifying dependent is a dependent who has a valid Social Security number or Adoption Taxpayer Identification Number issued by the IRS. A valid SSN for the 2021 Recovery Rebate Credit is one that is issued by the Social Security Administration by the due date of your 2021 tax return (including an extension if you requested the extension by the due date).

To claim a person as a dependent on your tax return, that person must be your qualifying child or qualifying relative.

A child is your qualifying child if the following conditions are met:

  • Relationship to you: 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).
  • Age: The child was:
    • under age 19 at the end of the tax year and younger than you,
    • under age 24 at the end of the tax year, a student, and younger than you, or
    • any age and permanently and totally disabled.
  • Citizenship: The child’s a U.S. citizen, U.S. national, U.S. resident alien, or a resident of Canada or Mexico.
  • Residency: The child lived with you for more than half of the tax year. For exceptions to this requirement, see Residency Test PDF in Publication 501, Dependents, Standard Deduction, and Filing Information.
  • Support: The child didn’t provide over half of his or her own support for the tax year.
  • Tax return: The child doesn’t file a joint return for the year (or files it only to claim a refund of withheld income tax or estimated tax paid).

A person is your qualifying relative if the following conditions are met:

  • The person can't be your qualifying child or the qualifying child of any other taxpayer.
  • The person either is related to you in one of several ways or lived with you all year as a member of your household (and your relationship must not violate local law).
  • The person is a U.S. citizen, U.S. national, U.S. resident alien, or a resident of Canada or Mexico.
  • The person's gross income for the year must be less than $4,300. (Exceptions exist if the person is disabled.)
  • You must provide more than half of the person's total support for the year. (Exceptions exist for multiple support agreements, children of divorced or separated parents, and parents who live apart.)
  • The person doesn’t file a joint return for the year (or files it only to claim a refund of withheld income tax or estimated tax paid).

To claim a person as a dependent on your tax return, that person must be your qualifying child or qualifying relative. See Whom May I Claim as a Dependent? to determine if you can claim someone as a dependent.

A8. Yes. The third Economic Impact Payment in 2021 did not include payments for these children because it was based on information from your 2020 or 2019 tax return, but you may claim a 2021 Recovery Rebate Credit for them if they are a qualifying dependent and you’re eligible for the credit. You may claim a 2021 Recovery Rebate Credit for the qualifying dependent, if you’re eligible, on your 2021 tax return that you will file in 2022. 

To claim a person as a dependent on your tax return, that person must be your qualifying child or qualifying relative. See Whom May I Claim as a Dependent? to determine if you can claim someone as a dependent.

A9. Maybe. If you were claimed as a dependent on someone else’s tax return for 2020, you were not eligible for the third Economic Impact Payment. If no one can claim you as a dependent for 2021 and you are otherwise eligible, you can claim the 2021 Recovery Rebate Credit on your 2021 tax return.

Married persons who didn’t receive the third Economic Impact Payment should determine their eligibility for the Recovery Rebate Credit when filing their 2021 tax return.  You and your spouse can’t be claimed as a dependent on someone else’s return for the 2021 tax year if you claim the 2021 Recovery Rebate Credit on a joint tax return that you and your spouse file together. See Joint Return Test PDF under Dependents in Publication 501, Dependents, Standard Deduction, and Filing Information.

If you file electronically, the tax preparation software will help you figure your 2021 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 2021 Form 1040 and Form 1040-SR instructions can also help calculate the credit.

A10. Yes. Individuals will not be denied the 2021 Recovery Rebate Credit solely because they are incarcerated.  An incarcerated individual may claim a 2021 Recovery Rebate Credit if all eligibility requirements are met and the individual files a 2021 tax return – even if not required to file - to claim the credit. 

A11. An individual who died in 2021 or in 2022 and did not receive the full amount of the third Economic Impact Payment may be eligible for the 2021 Recovery Rebate Credit if the individual met the eligibility requirements while alive.

An individual who died prior to January 1, 2021 does not qualify for the 2021 Recovery Rebate Credit. 

A12. A dependent who has a valid SSN is a qualifying dependent. You can claim up to $1,400 for each qualifying dependent claimed on your tax return, even if you do not have a valid SSN, but you must meet all other eligibility and income requirements.

For example, if you file as head of household and your adjusted gross income is $120,000 or more you would not qualify for any credit for you or your qualifying dependent. If your income was under $120,000, you are a U.S. resident alien and not a dependent on another taxpayer’s 2021 return, you can’t claim $1,400 for yourself, but you may still claim up to $1,400 for each dependent you claimed on your return who has a valid SSN.

You can claim the 2021 Recovery Rebate Credit for your qualifying dependent by filing a 2021 tax return.

If you file electronically, the tax preparation software will help you figure your 2021 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 2021 Form 1040 and Form 1040-SR instructions can also help calculate the credit.

A13. No, you may not claim the credit from the IRS. Instead, tax authorities in U.S. territories will provide the Recovery Rebate Credit to eligible residents. Individuals who were territory residents in 2021 should direct questions about the third Economic Impact Payments received or the 2021 Recovery Rebate Credit to the tax authorities in the territories where they reside.