How Does the Recovery Rebate Credit Work?

The recovery rebate is a credit for taxpayers who either did not receive or received less than the full amount of their Economic Impact Payments. Here’s how it works for the 2021 tax year:

Economic Impact Payments and plus-up payments were issued during 2021 from March through December. If you received the full amount of the third Economic Impact Payment, then you do not need to include any information about this when you file your return.

However, if you didn’t qualify for the payment or received less than the full amount, then you can claim this as a credit on your 2021 tax return.

If you are missing any of the first and second stimulus payments, then you will need to claim this as a credit on your 2020 tax return.

 

If you like what you just read, then don’t hesitate to forward/share with your friends, comment below, and/or click like on LinkedIn!

Make sure to subscribe to our weekly emails to receive practical business, financial and tax strategies! Sign Up Now!