What's the Recovery Rebate Credit?
If you didn't get a third stimulus check – or you only got a partial check – then you certainly want to check out the recovery rebate tax credit when you're working on your 2021 tax return.
The recovery rebate tax credit and stimulus checks are joined at the hip. In fact, third stimulus checks (including "plus-up" payments) were simply advance payments of the credit. So, if the combined total of your third stimulus check and any "plus-up" payment is less than your allowed recovery rebate credit amount, you may be able to get the difference back on your 2021 tax return in the form of a larger tax refund or a lower tax bill. If your third stimulus check exceeded the amount of the credit, you don't have to repay the difference. Either way, you win!
This helps eligible Americans who either didn't receive a third stimulus check or didn't get. And, in some cases, even a person who received the $1,400 third-round payment can claim a recovery rebate credit that boosts their refund or reduces the tax they owe. So, even if you're not to file a 2021 tax return, make sure you at least check to see if you qualify for the recovery rebate credit. If you do, go ahead and file just to claim the credit and get a refund (even if the IRS hasn't processed your 2020 return yet).
