Your income plunged last year. You had a baby. You think you didn’t get all the 2020 stimulus money that should have come your way.

You can still get your money, and very soon.

Check out Line 30 on Form 1040 of your income tax form. It’ll say “Recovery Rebate Credit.” That’s the way to recoup the stimulus you should have received but did not.

The additional payment would be added to your tax refund or reduce your balance due.

“At a time when people are struggling financially in the wake of the COVID-19 pandemic, some Americans may have also missed out on their full first and second stimulus payments, money intended to help during a critical time,” said Kathy Pickering, H&R Block chief tax officer. “New parents and recent graduates could have unknowingly missed out on stimulus money.”

Forget, for a moment, the stimulus that President Joe Biden signed into law last week. The Internal Revenue Service’s official payments of $1,400 per qualifying adult and dependent began Wednesday. IRS estimates about 90 million payments were issued in the first batch, most by direct deposit.

The tax form’s Recovery Rebate Credit is a way of closing the books on 2020.

There were two stimulus payments last year. The first, $1,200 per qualifying adult and $500 per child 16 or under, began last spring. The second, $600 per qualifying adult or child 16 or under, began in late December.

Those payments were based on 2018 or 2019 income. But as the COVID pandemic sent the economy plunging last year, things changed dramatically for a lot of people, meaning they could be due stimulus payments they didn’t get.

Here are some of the most commonly asked questions about the 2020 stimulus, with help from the Internal Revenue Service and tax preparation company H&R Block:

Q. Who is most likely to be eligible for the Recovery Rebate Credit?

Pickering lists three groups:

People who were unemployed or had lower incomes last year. Individuals with income of less than $75,000 and joint filers making less than $150,000 on their 2018 or 2019 returns qualified for a full stimulus payment last year. The payments were then phased out until individuals making more than $99,000 and couples earning more than $198,000 got no payment.

If your income fell below those levels last year, you could qualify for a 2020 stimulus payment. And under the recently-passed American Rescue Plan Act the first $10,200 of 2020 unemployment benefits is not subject to federal tax.

Expanded family with a new child. Approximately 3.7 million babies were born in 2020 and roughly 140,000 children adopted. Families who added a child not previously claimed as a dependent on their tax return may be eligible for additional stimulus money.

First-time filers such as recent college graduates. According to the Department of Education, 5.7 million students received high school or undergraduate degrees in 2020. Those starting careers will become first-time filers and likely can’t be claimed as a dependent, possibly making them eligible for stimulus money.

For example, if a college graduate was a dependent in 2019, graduated, and moved out on their own and started a new job, they are likely eligible for the 2020 Recovery Rebate Credit.

Q. How do I know how much to claim?

A. First, make sure you know how much you got in stimulus money last year. For an explanation of how to proceed, go to https://www.irs.gov/instructions/i1040gi#idm140228274609312 and the worksheet should come up. If you are eligible, you can claim on the money on Line 30 of your tax return.

Q. This is all too confusing. Where would I go for help?

A. The IRS offers a Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs. They will prepare your returns for free if you’re qualified. Don’t be shy about using them.

Q. Who qualifies?

A. For the VITA program, people who generally make $57,000 or less, people with disabilities and limited English speakers.

Q. And for the Counseling for the Elderly program?

A. People 60 and older.

Q. How do I find these programs?

A. Use the VITA/TCE locator: https://irs.treasury.gov/freetaxprep/ or get help from AARP at http://www.aarp.org/applications/VMISLocator/searchTaxAideLocations.action

For more about the AARP program, check https://press.aarp.org/2021-2-16-AARP-Foundation-Tax-Aide-Launches-New-Services

Q. Is there a number to call?

A. 800-906-9887 (VITA Locator) or 888-227-7669 (AARP Locator)

Q. Any other options?

A. The National Association of Tax Professionals has 23,000 members who are experts. You can visit their website to find a tax preparer.

Q. What happens if you received too much stimulus money?

A. If your stimulus payment was too high based on actual 2020 information, it will not lower your refund or add to your balance due, Pickering said.

David Lightman is McClatchy’s chief congressional correspondent. He’s been writing, editing and teaching for 49 years, with stops in Hagerstown, Riverside, Calif., Annapolis, Baltimore and since 1981, Washington.





Source link