The IRS has stopped making catch-up or retroactive stimulus payments for individual adults and their dependents.
Eligible tax tax filers who didn’t get the full amount of the third Economic Impact Payments for themselves or their dependents (existing and new) must file a 2021 tax return – even if you don’t usually file taxes – to claim the payment as a 2021 Recovery Rebate Credit (RRC).
This was the same process for 2020 EIP (stimulus check payments) as discussed in the sections below. Any payments will reduce any tax you owe for 2021 or be included in your tax refund.
If you already got the third stimulus check as an advance payment in 2021, which would be reflected on IRS notice 1444-C mailed to you earlier this year, you do not need to take any action or declare receipt of this payment. Put $0 or leave recovery rebate line blank in your 2021 return.
The IRS has it on their records and will automatically account for it when you file your return. You can only see payments on your transcript or online IRS account.
The IRS has provided these considerations to keep in mind if claiming the RRC for missing or underpaid stimulus checks:
- To find the amount of your past Economic Impact Payments, check your IRS online account
- You should also have received a series of 1444 Notices in the mail around your. Letter 6475 was sent a few months ago confirming the total amount of the third Economic Impact Payment and any plus-up payments you received for tax year 2021. You will need this for your tax return worksheets
- It is important that you claim the correct RRC amount. Any errors in the credit amount on your tax return will be corrected, unless you entered $0 or left the line blank for the Recovery Rebate Credit. If you are due a refund it may be delayed while we make any necessary corrections.
- If you qualified for a third stimulus check 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.
- Yes, if you didn’t claim the credit on your original tax return you will need to file a Form 1040-X, Amended U.S. Individual Income Tax Return, to claim it. The IRS will not calculate the 2021 Recovery Rebate Credit for you if you did not enter any amount on your original tax return, or you entered $0.
Claiming Past Dependent Stimulus Payments
Under the two main COVID relief stimulus packages passed last year, there were two separate payments of $500 and $600 for qualifying dependents under the age of seventeen at the end of 2020. The IRS was making this payment automatically based on 2019 tax returns for the $600 second dependent payment and 2018 or 2019 returns for the first $500 payment.
Non-filers could add dependents on a special IRS website for the first payment, but for the vast majority of Americans dependent information was pulled from 2018 or 2019 tax returns, whichever was the latest. As a result if you had a child (born or adopted) in 2020, you wouldn’t have them as dependents in your 2019 return since you can only prepare and file your 2020 return in 2021.
How to Claim This Payment
The easiest way to claim this payment is when you file your 2020 return in the coming months. There will be a section to claim any 2020 dependent stimulus (or your adult stimulus payment if that was missing) as a recovery rebate credit on a 2020 Form 1040 or Form 1040-SR. My recommendation is to use leading tax software packages like Turbo Tax or Tax Act to file your return as they have automatic eligibility calculations and step-by-step guides on claiming 2020 stimulus payments that were not automatically paid to you by the IRS.
You will however need to be aware of the qualifying income (AGI) thresholds for claiming these stimulus payments. If you made below the lower threshold you can get the entire stimulus payment. However the amount phases out until you reach the maximum income threshold. The upper income threshold was lower for the second ($600) payment so there are instances were some families may have qualified for part of first payment, but not the second. You can see more in this article on the 2020 dependent stimulus and I have put both the income qualification thresholds below for your reference.
$600 Second Dependent Stimulus Qualifying Thresholds
|Income Below Which FULL Dependent Stimulus is Paid (Lower Threshold)||Max Income To Qualify for Stimulus (no kids)||Max Income to Qualify with 1 Child|
|Single or married filing separate||$75,000||$87,000||$99,000|
|Head of household||$112,500||$124,500||$136,500|
|Married filing jointly||$150,000||$174,000||$186,000|
$500 Original/Dependent Stimulus Qualifying Thresholds
|Filing Status||Income Below Which FULL Dependent Stimulus is Paid||Max Income To Qualify for Stimulus (no kids)||Max Income to Qualify with 1 Child|
|Single or married filing separate||$75,000||$99,000||$109,000|
|Head of household||$112,500||$136,500||$146,500|
|Married filing jointly||$150,000||$198,000||$208,000|
Many parents didn’t realize this dependent stimulus payment would cover children born (or adopted) this year so the $1,100 could be a nice bonus and make for a larger tax refund in 2021. You can see more in this video covering this topic.