What is the Recovery Rebate Credit?
The IRS sent out first-round Economic Impact (stimulus) Payments (EIP) in 2020. They based the amount of payment they sent out on the information they had from 2019 or 2018 tax returns.
The IRS also sent out a second round of Economic Impact (stimulus) Payments (EIP) in January 2021. They based the amount of payment they sent out on the information they had from your 2019 tax return.
Common reasons the amount you qualify for may be different from the EIP you received include:
- Your filing status changed.
- The number of children you're claiming is different.
- Your income increased or decreased.
If you qualify for a larger EIP amount based on your 2020 tax return, you qualify for the Recovery Rebate Credit
, which increases your refund or decreases the amount you owe. The amount of your Recovery Rebate Credit
is the amount of EIP you qualify for minus the amount of EIP you actually received.
For example, if you received an EIP of $2,400 in 2019 but you qualify for $2,900 based on your 2020 return, your Recovery Rebate Credit
will be $500.
If the amount you qualify for based on your 2020 tax return is lower than the EIP you received, you don't need to repay any money received.
If you qualify for the Recovery Rebate Credit
, we'll ask you for the amount of EIP you received last year and calculate the credit for you.
How do I know how much EIP I received last year?
Go to the IRS website
for more information.