The Recovery Rebate Credit aka Economic Stimulus Payment was authorized by the CARES ACT and the related COVID TAX RELIEF ACT that were both passed in 2020. These stimulus payments are actually a credit against your 2020 income tax and were paid out in two separate installments (referred to as EP1 and EP2)
Who Is Eligible for the Stimulus Payment?
The Economic Stimulus Payment (First Round EP1) was sent out beginning April 1, 2020 to eligible individuals based upon either their 2019 or 2020 Adjusted Gross Income (AGI).
The EP1 payment was $1,200 or $2,400 if married filing joint and your AGI was under $75,000 if filing single or married filing separately; $112,500 if filing as head of household and $150,000 if filing married filing joint. An individual's payment is reduced by 5% of the excess that their AGI is over the threshold.
EP2 – If you are a U.S. Citizen or U.S. resident alien and your (AGI) is under $75,000 for single; $150,000 for married filing joint or qualifying widow; or $112,500 as head of household then you are eligible for the stimulus payment. This stimulus payment amount would be $600 for filing as a single and $1,200 as married filing joint.
If you have qualifying child then you are eligible for an additional $600. A qualifying child must be under the age of 17 as of December 31, 2019.
If your AGI is over these thresholds, then your EP2 is reduced by 5% and once your AGI reaches $87,000 for single; 174,000 for married filing joint or qualifying widow and $124,500 Head of Household, then the EP2 payment will be fully phased out.
Since the income thresholds are different for each round of stimulus payment, it is possible for an individual to have qualified for the first payment but not the second payment.
Did not Get Stimulus Payment
If you did not receive either the EP1 or EP2 Stimulus Payment or did not receive the full amount that you were entitled to, then you may be able to claim the recovery rebate credit on your 2020 tax return.
IRS Mailing Stimulus Notices
The IRS will be mailing out two notices to taxpayers which are Notice 1444 and Notice 1444-B. These notices will indicate the stimulus payment received be the taxpayers and will be need for the taxpayer to file their 2020 tax returns. In the event that a taxpayer does not receive these notices, then the information can be obtained via the IRS website.
