2nd Economic Payment (February 2021)

Tax Tips

2nd Economic Payment

By Michael Aston, E.A.
Alhambra Tax Center

 

The Federal Government announced the 2nd economic payment of $600 per adult and $600 per dependent child. The payments started during the last week of December and will continue until January 15, 2021.

If you did not receive the $600 payment by January 15th – there’s no need to worry. The IRS will give you the money when you file your year 2020 Income Tax Return.

To qualify for the full payment your income must be less than:

Single -- $75,000

Head of Household -- $112,500

Married Filing Jointly -- $150,000

 

The law stated the amount that a taxpayer receives is based on their year 2020 tax return numbers. However, the IRS paid out the funds based on your year 2019 tax return numbers.

Below is from the IRS website:

Who Can Claim the Recovery Rebate CreditEligible individuals who did not receive the full amounts of both Economic Impact Payments may claim the Recovery Rebate Credit on their 2020 Form 1040 or 1040-SR. To determine whether you are an eligible individual or the amount of your of your Recovery Rebate Credit, complete the Recovery Rebate Credi9t Worksheet in the Instructions for the 1040 and 1040-SR.

Generally you are eligible to the Recovery Rebate Credit if you were a U.S. Citizen or U.S. Resident alien in 2020, can’t be claimed as a dependent of another taxpayer for tax year 2020 and have a Social Security number valid for employment that is issued before the due date of your 2020 tax return(including extensions).

You must file form 1040 or form 1040-sr to claim the Recovery Rebate Credit even if you are normally not required to file a tax return.

To get more information on the Recovery Rebate Credit go to irs.gov or contact your tax preparer.

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