You may qualify for the Recovery Rebate Credit. You have probably already heard of it: these are the stimulus checks that everyone is talking about on the news. Like most people you probably have many questions about the checks, and if you will be receiving one.
The Recovery Rebate Credit is an advance payment of a refundable credit on your 2020 tax return. The maximum credit amount is $1,200 per adult and an additional $500 for each dependent child under the age of 17.
If you have already filed your 2019 tax return, the IRS will use that information to determine eligibility. If you have not filed your 2019 tax return, the IRS will use the information from your 2018 tax return to determine eligibility.
The credit amount is reduced when your adjusted gross income (AGI) reaches certain thresholds, and it completely phases out once you reach a certain AGI. The thresholds are listed below.
- Joint filers with AGI up to $150,000 will receive $2,400, plus $500 per dependent child under age 17.
- Head of Household with AGI up to $112,500 will receive $1,200, plus $500 per dependent child under 17.
- Any other taxpayer that is not a dependent of another, with AGI up to $75,000, will receive $1,200.
- The total payment is reduced by five dollars for every $100 AGI exceeds the above maximums. E.G., joint filers with two children under 17 are eligible for a payment of up to $3,400. If their AGI is $160,000, their payment would be reduced to $2,900. (160,000-150,000 = 10,000/100 = 100*5 = 500; $3,400 – $500 = $2,900)
- Who is eligible?
All taxpayers in the specified AGI brackets, except a nonresident alien, and an estate or a trust who have valid identification numbers.
What if I have not filed a 2018 or a 2019 tax return?
The advance payment would be based on information for calendar year 2019 in Form SSA-1099, Social Security Benefit Statement or Form RRB-1099. If you are not receiving these benefits, then you will need to file a 2019 or 2020 return to receive a payment or credit.
I am a college student. Will I be receiving a recovery payment?
If you were not a dependent on your parents’ most recent return and you filed a tax return, then you will receive a payment. Unfortunately, most college students will not be receiving a recovery payment.
How will I receive the payment?
If your 2018 or 2019 tax returns included bank account and routing number information, the payment will be directed to that account. If your return did not include bank account information, the stimulus check will be mailed to the address on your most recent tax return.
I have moved. How do I change my address with the IRS?
By filing a 2019 return now, or by mailing Form 8822 to the IRS, click the link to access the form https://www.irs.gov/forms-pubs/about-form-8822
How can I change my bank account with the IRS?
To change your bank account with the IRS call them at 800-829-1040.
Will I be notified by the IRS that the payment has been sent?
Yes, within 15 days of payment, the IRS will send a letter notifying you. This letter will be sent to the address on your most recently filed tax return. The letter will tell you who to contact at the IRS if you do not receive the payment.
When will I receive the payment?
Payments will start going out in the next three weeks to people who have direct deposit information on file with the IRS.
Will the IRS call me?
The IRS will not call you. Be very careful; there are a lot of scammers impersonating the IRS. Do not give out your social security number, bank information or any other personal information to anyone who may contact you either by telephone or email about stimulus checks or any other tax matter. If you are unsure if a call, letter or email is legitimate please check with your tax preparer.
Sincerely,
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| Smith Marion & Co. |