2021 Recovery Rebate Credit — Topic E: Calculating the 2021 Recovery Rebate Credit

 

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 Payment, 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. You must file a 2021 tax return to claim a 2021 Recovery Rebate Credit, even if you usually don't file a tax return. See the 2021 Recovery Rebate Credit FAQs — Topic B: Claiming the Recovery Rebate Credit if you aren't required to file a tax return.

To figure the credit on your tax return, you will need to know the amount of any third Economic Impact Payments you received. This includes any plus-up payments.

Log into your online account to find your Economic Impact Payment amounts. You can also refer to IRS Notice 1444-C mailed to your address of record. In January 2022, we'll send Letter 6475 confirming the total amount of the third Economic Impact Payment and any plus-up payments you received for tax year 2021. See: Where can I find the amount of my Third Economic Impact Payment?

The fastest and most accurate way for you is to file is electronically where the tax preparation software will help you figure your 2021 Recovery Rebate Credit.

You can also use the Recovery Rebate Credit Worksheet in the 2021 Form 1040 and Form 1040-SR instructions to help determine if you are eligible for the credit.

A2. If you're eligible, you'll need to file a 2021 tax return to claim the 2021 Recovery Rebate Credit even if you aren't required to file a tax return. Line 30 on 2021 Form 1040 and Form 1040-SR is used to claim the Recovery Rebate Credit. File a complete and accurate return – even if you don't usually file taxes - to avoid processing delays that slow your tax refund.

The IRS will not calculate the Recovery Rebate Credit for you or correct your entry if you enter $0 or leave the line blank for the credit.

If you make a mistake on the Line 30 amount ($1 or more), we will calculate the correct amount of the Recovery Rebate Credit, correct your tax return, and continue processing it. This will delay the processing of your return. We will send you a notice explaining any changes we make.

To calculate and claim the Recovery Rebate Credit, you'll need the amounts of any third Economic Impact Payments, including plus-up payments that you received. Log into your online account to find your third Economic Impact Payment amounts. You can also refer to IRS Notice 1444-C mailed to your address of record. In early 2022, we'll send Letter 6475 confirming the total amount of the third Economic Impact Payment and any plus-up payments you received for tax year 2021. See: Where can I find the amount of my Third Economic Impact Payment?

File electronically and 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 or finding a trusted tax professional. The Recovery Rebate Credit Worksheet in the2021 Form 1040 and Form 1040-SR instructions can also help determine if you are eligible to claim the credit and the amount to enter on line 30.

Your 2021 Recovery Rebate Credit will reduce any tax you owe for 2021 or be included in your tax refund.

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. There is no need to claim the 2021 Recovery Rebate Credit or complete the worksheet if you received the full amount of the third Economic Impact Payment.

If you didn't receive the full amount of the third Economic Impact Payment, then the 2021 Recovery Rebate Credit Worksheet will help you find out how much of the credit you qualify for when filing your 2021 tax return. Completing the worksheet is not required, but it may be helpful for you to use it and keep it for your records.

To calculate and claim the 2021 Recovery Rebate Credit, you'll need to know the amounts of any third Economic Impact Payments you received. This includes any plus-up payments. Log into your online account to find your third Economic Impact Payment amounts. You can also refer to IRS Notice 1444-C mailed to your address of record. In early 2022, we'll send Letter 6475 confirming the total amount of the third Economic Impact Payment and any plus-up payments you received in 2021. See: Where can I find the amount of my Third Economic Impact Payment?

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.

A4. Your 2021 tax refund will include your 2021 Recovery Rebate Credit.

To claim any refund, you generally must file your tax return within 3 years from the date the return was due (including extensions if you requested the extension by the due date) to get that refund. This includes any amount of the 2021 Recovery Rebate Credit included in your refund.

A5. The only way to get a Recovery Rebate Credit is to file a 2021 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 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 or finding a trusted tax professional. The Recovery Rebate Credit Worksheet in the 2021 Form 1040 and Form 1040-SR instructions can also help determine if you are eligible to claim the credit.

Your 2021 Recovery Rebate Credit will reduce any tax you owe for 2021 or be included in your tax refund.

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.

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, 2021, and you received third 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 amount for the third Economic Impact Payment, you may be eligible to claim the 2021 Recovery Rebate Credit. Do not include your deceased spouse's portion of the Economic Impact Payment (no more than $1,400) on the worksheet when filing your 2021 tax return. You should only include your portion of the payment and the amount for any qualifying children on the worksheet.

If your 2021 tax return has been processed and you didn't claim the credit on your return but are eligible for it, you must file an amended return to claim the credit. See the 2021 Recovery Rebate Credit FAQs — Topic G: Correcting issues after the 2021 tax return is filed.

A7. If you are filing your 2021 return with your deceased spouse as married filing jointly, you should enter $2,800 on line 6 of the worksheet and $1,400 on line 8 of the worksheet (if you answered "Yes" to question 2 or 3 in the worksheet). Also include the amount of any third Economic Impact Payments you both received on lines 16 and 19 of the worksheet. Please refer to the 2021 Form 1040 and Form 1040-SR instructions for more information.

A8. If you did not receive the full amount for the third Economic Impact Payment and you and your spouse meet all the eligibility requirements based on your 2021 tax return, you may claim the 2021 Recovery Rebate Credit.

The only way to get a 2021 Recovery Rebate Credit is to file a 2021 tax return, even if you are otherwise not required to file a tax return. When you answer the tax preparation software questions or complete the 2021 Recovery Rebate Credit Worksheet for a joint tax return with your spouse, enter the combined third Economic Impact Payment amounts you and your spouse received.

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.

A9. The only way to get a 2021 Recovery Rebate Credit is to file a 2021 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 preparation software will help you figure your Recovery Rebate Credit. Visit IRS.gov/filing for details about IRS Free File, Free File Fillable Forms or finding a trusted tax professional. The Recovery Rebate Credit Worksheet in the 2021 Form 1040 and Form 1040-SR instructions can also help determine if you are eligible to claim the credit.

Your 2021 Recovery Rebate Credit will reduce any tax you owe for 2021 or be included in your tax refund.

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.

A10. No, the third payment is not includible in your 2021 gross income. You should not include the payments as income on your Federal income tax return or pay income tax on them. They will not affect your income for purposes of determining eligibility for federal government assistance or benefit programs.

A11. When third Economic Impact Payments were jointly issued to two spouses, each spouse must claim half the payment when calculating the 2021 Recovery Rebate Credit if they are not filing their 2021 tax return jointly. Each spouse must enter half the payment in the tax preparation software or on the 2021 Recovery Rebate Credit Worksheet. If filing a joint return, you will include the total amount of the third payment issued to you and your spouse.

The fastest and most accurate way for you is to file is electronically where 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 or finding a trusted tax professional. The Recovery Rebate Credit Worksheet in the 2021 Form 1040 and Form 1040-SR instructions can also help determine if you are eligible for the credit.

Log into your online account to view the amounts of your third Economic Impact Payments. You can also refer to your Notice 1444-C, Your Third Economic Impact Payment, which shows the amount of the third payment. In early 2022, we'll send Letter 6475 confirming the total amount of the third Economic Impact Payment and any plus-up payments you received in 2021. See: Where can I find the amount of my Third Economic Impact Payment?

A12. When a third Economic Impact Payment was issued jointly to two spouses, each spouse is treated as receiving half the payment. When determining any 2021 Recovery Rebate Credit, each spouse must enter half the payment in the tax preparation software or on the 2021 Recovery Rebate Credit Worksheet.

NOTE: If the third Economic Impact Payment was based on a return was filed without your consent, refer to Missing Economic Impact Payment: If I didn't receive the third Economic Impact Payments because a 2019 or 2020 joint return was filed in my name without my consent, can I claim the 2021 Recovery Rebate Credit?

The fastest and most accurate way to file is electronically where 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 or finding a trusted tax professional. The Recovery Rebate Credit Worksheet in the 2021 Form 1040 and Form 1040-SR instructions can also help determine if you are eligible for the credit.

Log into your online account to view the amounts of your third Economic Impact Payments. You can also refer to your Notice 1444-C, Your Third Economic Impact Payment, which shows the amount of the third payment. In early 2022, we'll send Letter 6475 confirming the total amount of the third Economic Impact Payment and any plus-up payments you received in 2021. See: Where can I find the amount of my Third Economic Impact Payment?

A13. No, you must reduce your 2021 Recovery Rebate Credit amount by the amount of third Economic Impact Payments that were loaded on the EIP cards. Whether you have activated your card is not relevant to the requirement that your 2021 Recovery Rebate Credit amount be reduced by the amount of the third Economic Impact Payment.

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. 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.

A14. Maybe. When a third Economic Impact Payment was issued jointly to two spouses, each spouse is treated as receiving half the payment.

If your filing status for 2021 changed to or from Married Filing Jointly or if you remarried in 2021, each spouse should include their half of the third Economic Impact Payment when entering information into the tax preparation software or completing the worksheet to determine the amount of the 2021 Recovery Rebate Credit.

A15. Yes, if you meet the eligibility requirements to claim the 2021 Recovery Rebate Credit. The amount of your credit may include up to $1,400 for a qualifying dependent you are claiming on your 2021 return.

Note: Qualifying dependents expanded for 2021 Recovery Rebate Credit. Unlike the 2020 Recovery Rebate Credit, the 2021 credit includes additional amounts for all dependents, not just children under 17. Eligible individuals can claim the 2021 credit based on all of their qualifying dependents claimed on their return, including older relatives like college students, adults with disabilities, parents, and grandparents.

When you answer the tax preparation software questions or complete the 2021 Recovery Rebate Credit Worksheet, include only the third Economic Impact Payment amounts issued to you (and your spouse, if filing a 2021 joint return). Do not include third Economic Impact Payment amounts issued to anyone else, even if their payments included amounts for an individual who is your qualifying dependent for 2021. See: Where can I find the amount of my Third Economic Impact Payment?

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.

A16. 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 (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).

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

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.

See Topic C: Eligibility for claiming a Recovery Rebate Credit on a 2021 tax return for more information.

A17. The third Economic Impact Payment was an advance payment of the 2021 Recovery Rebate Credit. To issue the Economic Impact Payments as quickly as possible, applicable laws allowed the IRS to use your 2020 tax information. If your 2020 tax return was not on file, the IRS used your 2019 tax return information.

Generally, if you had the same number of qualifying dependents on your 2020 tax return that you'll have on your 2021 tax return – even if they are not the same dependents – it's likely we already issued you the full amount of the 2021 Recovery Rebate Credit as the third Economic Impact Payment.

If you were issued the full amount of the third Economic Impact Payment, you won't be eligible to claim the 2021 Recovery Rebate Credit for your dependent born in 2021 even though that child is a qualifying dependent for the credit.

You were issued the full amount of the Recovery Rebate Credit if the third Economic Impact Payment was $1,400 ($2,800 if married filing jointly for 2021) plus $1,400 for the number of qualifying dependents you had in 2021.

If you didn't receive the full amount of the third Economic Impact Payment and you meet all the eligibility requirements based on your 2021 tax return, you may claim the 2021 Recovery Rebate Credit.