Still have another chance to get your first stimulus check!
The IRS sent out about 160 million Economic Impact Payments, otherwise known as stimulus checks, earlier this year.
But some Americans have inevitably fallen through the cracks. If you didn’t get a first-round payment and should have, or received less money than you were entitled to, you will be able to claim it on your 2020 taxes at the beginning of next year. (We don’t yet know how any second-round stimulus checks will factor into 2020 taxes.)
You can think of the payments made this year as an estimate, based on the information available to the IRS at the time from your 2018 or 2019 tax return. Remember, they wanted to get the money into Americans’ accounts as quickly as possible.
When tax season rolls around in February, you will be able to settle the score, as it were, by reporting your 2020 income and claiming the payment that you’re eligible for. The amount will lower your tax bill and may result in a cash refund.
How to claim your stimulus check on your 2020 taxes
When taxpayers file their 2020 taxes, they will be asked to report the total Economic Impact Payment they received in 2020. There will be a separate worksheet with instructions for calculating any outstanding amount owed, if anything. The IRS advises filers to only fill out this portion of their return if they received less than the maximum payment amount.
Single filers could have gotten up to $1,200, plus $500 for each qualifying child (a person under age 17 who is claimed as a dependent). Married joint filers could have gotten up to $2,400, plus $500 for each qualifying child.
Anyone who got a payment should have also received a letter in the mail — Notice 1444 — stating the exact amount.
People who had a baby in 2020 may be able to claim the additional $500 for a qualifying child, even if they received the maximum payment as an individual or couple.
Your stimulus check is formally called a Recovery Rebate Credit
A tax credit reduces your tax bill on a dollar-for-dollar basis. It’s like having store credit at your favorite clothing shop — when you apply it to your total bill, it reduces what you owe. Often it can result in a refund.
Because of the severity of the national crisis, the government gave eligible Americans their tax credit early; the amount was based on their latest tax return filed or their federal benefits profile. People who don’t normally file taxes were asked to submit their personal information to the IRS online by November 21 to claim their payment.
Most of the payments were made based on 2018 or 2019 income, since those were the most recent tax returns filed. In some cases, that means people who lost their job, had their pay reduced, or even had a baby since then were not given their full credit based on financial need in 2020.
Who is eligible for a Recovery Rebate Credit?
Anyone who is a US citizen or resident alien, has a Social Security number, and is not a dependent of another taxpayer is eligible for the tax credit.
Your adjusted gross income (AGI) determines the exact amount of your payment. Single filers with an AGI below $75,000 or single parents (heads of household) with an AGI below $112,500 are eligible for the full payment. Married couples who file jointly and have an AGI below $150,000 are eligible for the full payment.
Payments phase out at a rate of $5 for each $100 over the AGI threshold before ceasing at an AGI of $99,000 for single filers, $136,500 for heads of household, and $198,000 for married filers.