The Recovery Rebate Credit is a refundable credit that allows eligible individuals to claim any missing amounts from the Economic Impact Payment (EIP), also known as a stimulus payment, on their tax return. The credit was authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and paid in advance to most eligible citizens in the form of an EIP paid out in 2020 and early 2021. If you did not receive the full amount to which you were entitled, you were then able to claim it instead as a refundable credit when you filed your 2020 and/or 2021 tax returns.
To qualify for the Recovery Rebate Credit, you must meet certain eligibility requirements, which are generally the same as those for the EIP. These include being a U.S. citizen or U.S. resident alien, not being claimed as a dependent on another persons tax return, and having a valid Social Security number for employment that is issued before the due date of your tax return (including extensions) . The credit is figured like the EIPs, except that the credit eligibility and the credit amount are based on the IRS’s most recent information for you on file.
The Recovery Rebate Credit is a "refundable" credit, which means youll get a tax refund if the credit is larger than the tax that you would otherwise have to pay. You report the final amount on Line 30 of your federal income tax return (Form 1040 or Form 1040-SR) . It is important to note that if you already received your full amount for EIP3, you won’t qualify for the Recovery Rebate Credit.
