The IRS has now provided instructions to help people claim missing stimulus check for themselves and their dependents.
If you haven’t got your missing stimulus payment (economic impact payment) for yourself or your dependents by the start of 2022 the IRS is recommending claiming the payments as recovery rebate credits when filing your tax return (using Form 1040 or 1040-SR).
IF you didn’t use the IRS online portal during the year or get paid via 2021 Catch-up payments, then your tax filing allows you to update dependent information and payment details to ensure missing payments are paid correctly.
Note: You only make an entry on Line 30 of your 1040 tax return form if you are actually claiming the recovery rebate credit for missing or partial stimulus payments for yourself or for any eligible child dependents. Otherwise, you leave it blank. If you already got the full amount of stimulus payments then there is no point in trying to claim this again. It will be rejected and could in fact delay your return.
2021 Tax Returns – What if you claimed an incorrect amount?
If you and your dependents received the full amount of the third Economic Impact Payment (EIP) then no action is needed for your 2021 tax filing in 2022. This last payment won’t need to be included, even if your income went up in 2021.
If however you didn’t qualify for a third stimulus payment or got less than the full amount, you may be eligible to claim the missing amounts as a 2021 Recovery Rebate Credit (RRC) when you file your tax return. You must file a return to claim the credit, even if you don’t usually file a tax return.
The same process should be used when claiming the remaining amount of your child tax credit (CTC).
If you made a mistake on your filing for these credits, DO NOT file an amended tax return . While the IRS has sent letters and provide online tools to see how much of these credits you have been paid, if you made a mistake in calculating the amount, the IRS will generally calculate the correct amount of the credit due, make the correction to your tax return, and continue processing your return.
If a correction is needed, there may be a delay in processing your tax return and the IRS will send you a notice explaining any change made. You will also be given instructions on appealing any changes made by the IRS, that you don’t agree with.
Your 2021 RRC will reduce any tax you owe for 2021 or be included in your tax refund.
Claiming your missing Stimulus Check payments as a Recovery Rebate Credit
The IRS has provided a recovery rebate worksheet to help you figure how much of your missing stimulus payments you can claim in your tax return. While the recovery rebate worksheet may look complicated its not that bad as most of the questions are around trying to determine your eligibility to ensure you get your missing stimulus payments.
If you already got the two stimulus check payments prior to filing your tax return then you don’t need to complete this form. Alternatively you can use tax software from leading providers like Turbo Tax or Tax Act, to file for the recovery rebate credit to get your missing stimulus payments.
First its important to understand that stimulus checks, also known as Economic Impact Payments (EIP), were actually an advance payment against your subsequent year tax returns. In tax terms the stimulus check is classified as recovery rebate credit.
2020 Stimulus Checks Income Ranges – Same logic for 2021 Stimulus Checks claimed in Tax Filings
But there is one key difference between how these payments are treated when they were automatically paid in 2020 by the IRS versus claiming it via your tax return. The stimulus checks paid in 2020 were based on your 2018 or 2019 tax year information. The recovery rebate credit instead is based on 2020 tax year information. This is a big deal because thousands more may actually qualify for the stimulus payment via a recovery rebate credit based on lower 2020 incomes due to pandemic job losses or income reductions.
The first round of stimulus checks were initially sent out beginning in April 2020 but due to several processing issues and allowing non-filers to update details it took several months to get payments out. Some people reporting getting payments as late as December 2020 and many are still waiting. The second stimulus check (economic impact payment – EIP 2) was sent out from late December 2020 until January 15th, 2021 for initial processing. Checks, debit card and known exception payments (e.g. due to incorrect bank accounts) will likely be paid later in January 2020 ahead of IRS processing 2020 tax returns.
If you received one or both of these stimulus check/economic impact payments you would have also received IRS Notice 1444 and/or Notice 1444-B, which would show how much you were paid. Notice 1444-B, outlining your second stimulus check (EIP 2) payment may take several weeks to receive as those payments were recently made.
You may be able to claim the recovery rebate credit only if your stimulus check/economic impact payments are less than your credit. This would only happen if you were eligible for payment but didn’t get one or both payments for yourself or your dependents. You can also claim this rebate if your payment was less than what you expected. Note the maximum payment you receive cannot exceed maximum of $1200/$2400 (singles/couple) for the first stimulus payment or $600/$1200 for the second stimulus check.
Missing Dependent Stimulus Check Payments
One of the most common issue with missing stimulus payments were related to the $500 and $600 dependent payments. I have received over 1000 comments and this video highlighted the many issues around the dependent stimulus payments. Many got their adult stimulus payment but never received their first and/or second payment. Note this excludes babies born this year who would not have been on 2019 tax returns. Instead you have to claim children born after you filed your 2019 return (or born in 2020) to get a potential $1,100 recovery rebate credit.
Exceptions to Note
There are some other exceptions to note when claiming the recovery rebate via your 2020 tax return:
- If someone else claimed your dependent in their tax return (e.g. an ex-spouse) you cannot claim them as well and get an extra payment unless you can prove that they were incorrectly claimed on someone else’s return.
- If your stimulus check eligibility was based on a joint return, you and your spouse are each treated as having received half the payment that was issued.
- If only one of you has a valid social security number, and neither you nor your spouse was a member of the U.S. Armed Forces at any time during 2020, your credit amount will be limited
Per the 1040 form instructions, you are eligible to claim the recovery rebate credit if in 2020 you were a U.S. citizen or U.S. resident alien, weren’t a dependent of another taxpayer, and have a valid social security number. You can also see more details and information on the recovery rebate credit at IRS.gov/RRC.
You’ll need to file the standard 1040 federal tax return form, or the 1040-SR tax return for people 65 or older, to get your missing stimulus money in the form of a tax credit that will either lower the amount of tax you owe or increase the size of your refund.
Can Child Support or Other Offsets be Deducted from my Recovery Rebate (Stimulus Check Claim)?
The answer is Yes. A new provision in the CAA COVID-19 relief bill allows the IRS to withhold/garnish funds from the RRC for items like child support or other federal offsets. This has caught many people claiming their missing or partial stimulus check, which was not subject to this claw back when first paid via the IRS during the normal processing cycle. So even if you owed back taxes or some other type of government debt, you still got the full stimulus check when originally paid.
Note that the first stimulus payment was a little murky around offsets due to some unclear provisions in the CARES act. Many had their dependent payment offset due to injured spouse claims. See the following summary from a reader who left the comment below:
The problem is that the Rebate Credit is like any other refundable tax credit and can be garnished/offset for debts owed (including child support) and is not protected from being offset like the payment would have been if received as a Stimulus payment. My whole family’s 1st payment was taken to pay my husband’s child support debt, even though I filed injured spouse and that was supposed to be the solution to get my half. As of March 1, 2021 I still don’t have my MUCH NEEDED part of the payment and after reviewing the form for the Recovery Rebate Credit, this new “solution” (that’s being widely pumped as the end-all solution to this problem) won’t help at all (because the offset money is considered received by the IRS, the Rebate Credit doesn’t apply, and if it did, the Rebate Credit (my share only) would be subject to be re-offset as part of our tax return and filing injured spouse would only possibly get me a portion of the half of the payment that was supposed to be all mine). The IRS phone number to call actually says (on their website) it’s hard to get through due to low staff and plenty paperwork to process so I don’t know what to suggest from here. This is where I’m stuck too, which is preventing me from accurately completing my family’s 2020 taxes too.