Tax season is coming up quickly, and the IRS is offering eligible taxpayers who did not receive their full federal stimulus checks a chance to claim a Recovery Rebate Credit on their 2020 tax return.
The rebate will either increase the size of your refund or take an equal chunk out of taxes owed.
Essentially, this gives taxpayers a second chance to get federal support amid the pandemic, even if they were passed over the first time around. With uncertainty over the potential of a third round of checks, the rebate could offer relief to those still struggling.
The reasons why some people didn't receive checks or received less money than they expected run the gamut. There were technical glitches with direct deposits, postal delays, and everything in between.
In some cases, checks were sent to closed or invalid banks. In others, a person may have been denied a check or received a smaller amount due to their income level on a past tax return.
If you lost your job or took a wage cut in 2020, for instance — an all-too-common situation during the pandemic — the IRS may have passed over you not knowing your new situation.
Now taxpayers have a chance to set the record straight.
The first round of stimulus checks came out of the CARES Act and provided a maximum of $1,200 per person and $500 per eligible dependent child under 17. The amount of the check was based on 2019 or 2018 income as reported on a federal income tax form.
The second round, which was supposed to have been fully distributed by the middle of January, offered $600 per eligible person and dependent child. This round did not send any amount of stimulus to individuals making more than $87,000 or couples making more than $174,000.
For those looking to receive a rebate, you'll have to fill out an IRS worksheet to determine how much you've received so far and what you're potentially owed. Within the actual tax return, there will be a box on line 30 of your Form 1040 or 1040-SR to fill in the difference.
Individuals with an IRS account can look up how much they've gotten so far.
