What You Need To Know About Recovery Rebate Credit
If you didn't receive a third stimulus check or didn't receive the entire amount, you may be able to make up the difference by claiming the Recovery Rebate Credit also known as the COVID stimulus payment on your tax return for the 2021 tax year.
What's The Recovery Rebate Credit?
During the early days of the COVID-19 pandemic, the federal government tried to stabilize the drastic economic changes by providing the economy with the Recovery Rebate Credit. The CARES Act passed back in March 2020, established a refundable tax credit of up to $1,400 per qualifying adult, which would be credited to the taxpayer's tax due for the fiscal year 2021.
Now, most taxpayers should have already received their Economic Impact payments through a debit card sent out through mail or directly deposited in their designated bank accounts, but if they didn't, taxpayers are able to claim it on their tax returns. In addition, eligible individuals might earn up to $1,400 for each dependent of any age in their family.
Am I Eligible For The Recovery Rebate Credit?
In order to qualify for the Recovery Rebate Credit on your 2021 tax return, you:
Were a U.S. citizen or U.S. resident alien
Were not claimed as a dependent on another person's tax return
Have a Social Security number (SSN) valid for employment that's issued before the due date of your 2021 tax return (including extensions).
If the requirements above are all satisfied, anyone who has passed away in 2021 or 2022 still can have their Recovery Rebate Credit claimed by their representative.
In some rare situations, for married couples filing a joint return, even if only one spouse has a valid SSN, you can claim up to $1,400 for the spouse with the valid SSN. If you're claiming the extra $1,400 for a dependant, that person must have a valid Social Security number (SSN) or an adoption taxpayer identification number (ATIN) (ATIN). If neither you nor your spouse has a valid Social Security number, you can only claim up to $1,400 for each qualifying dependent on your tax return.
Just a brief reminder, if you've already received the full amount for the EIP3, you would not be eligible for the Recovery Rebate Credit.
Resolve Your Tax Bills
If you've found yourself in a nasty mess with the IRS, take a deep breath. Unpaid back taxes may be the biggest issue that taxpayers face, but the resolution may be very simple. For taxpayers who may have difficulty paying off an excessive amount of tax debt, there's a relief program that consolidates many major relief programs into a one-size-fits-all assistance program; The IRS Fresh Start Program.
It's a new and improved relief program that consolidates many major relief programs into a one-size-fits-all assistance program. Any issues regarding back taxes, unfiled years, or any other tax-related problems may be solved through one program; the IRS Fresh Start Program!
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