Resources

For more information & tax tips follow us on

Currently in :

Recovery Rebate Credit

The Recovery Rebate Credit Simplified

COVID-19 took a massive toll, and its health and economic impacts still affect our day-to-day lives. To minimize the negative economic effects of the COVID-19 pandemic, the US Government introduced economic impact payments, or stimulus payments, to help Americans get through the crisis. The IRS distributed the first stimulus payment in mid-2020 and sent out the second one at the end of that year. These stimulus payments are part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, enacted in March of 2020. Following this, the US government passed the American Rescue Plan Act, a $1.9-trillion economic stimulus package to counter the negative impact of the pandemic, which went into effect on March 11, 2021. It included a third round of stimulus payments. Though most of these stimulus payments have been issued by the IRS, there have been many instances of people missing out on them or receiving less than the total amount, but there are still ways you can claim that money, and the Recovery Rebate Credit is one of them.

Table of contents

What is Recovery Rebate Credit?...Read more

What’s the eligibility for a Recovery Rebate Credit?...Read more

How much can I receive as a Recovery Rebate Credit?...Read more

How to claim Recovery Rebate Credit?...Read more

I did not file my 2021 tax return. Can I apply for Recovery Rebate Credit?...Read more

How do I receive a refund of the Recovery Rebate Credit?...Read more

What is Recovery Rebate Credit?

Those eligible should have already received their stimulus payments through the CARES Act of 2020 and the American Rescue Plan Act of 2021. If not, they may be eligible to use the Recovery Rebate Credit to get what is essentially a backpay stimulus check. Say you missed any of the three stimulus payments or received less than the full amount in any given period between 2020 and 2021. You can then apply for a Recovery Rebate Credit along with your 2022 income tax return filing. Based on the value of your credit, you’ll either get a deduction on your tax owed or you get a refund if the value of the tax deduction is higher than your income tax amount.

EV Tax Credit

Bought an EV this year? Here’s how you can reduce your tax owed by $7,500.

US Tax Credits

The most important tax credits for self-employed and freelancers.

Rebate Recovery Credit

Think you might have received less than the full stimulus check amount? The Recovery Rebate Credit can help you get the rest.

Earned Income Credit

Find out if you qualify for the tax credits that can reduce your tax bill significantly.

Credit vs Deduction

Understand the differences between tax credits and tax deductions to save on taxes.

Dependent Care Credit

See if you qualify for the Child and Dependent Care Credit

EV Tax Credit

Bought an EV this year? Here’s how you can reduce your tax owed by $7,500.

US Tax Credits

The most important tax credits for self-employed and freelancers.

Rebate Recovery Credit

Think you might have received less than the full stimulus check amount? The Recovery Rebate Credit can help you get the rest.

Earned Income Credit

Find out if you qualify for the tax credits that can reduce your tax bill significantly.

What’s the eligibility for a Recovery Rebate Credit?

You are eligible for a Recovery Rebate Credit if you didn’t receive your third stimulus payout or received less than the full amount. Situations in which you might apply for a recovery rebate credit include:

If you forgot to add dependents
You had a divorce after your last tax filing
You got married and are no longer are eligible fro joint filing and a bigger amount
You are no longer a dependent

To be eligible for a Recovery Rebate Credit, you must:

Be an American citizen or have a spouse that’s an American citizen.
Have a SSN, or your spouse must have an SSN.
Have an Adjusted Gross Income (AGI) less than or equal to $75,000 if you are a single filer.
Have, filing jointly with your spouse, an AGI less than or equal to $150,000.
Have an AGI less than or equal to $112,500, if you are filing as head of the household.

It’s important to note that your AGI is your gross income after any tax deductions.

Quick tip

Check your IRS account to find how much you can get through the Recover Rebate Credit.

How much can I receive as a Recovery Rebate Credit?

The amount anyone can receive for the credit varies based on a number of actors. For example, Tony had an AGI of $66,000 in 2020 and received a full amount of $1,200 for the first payout and $600 in the second. These payments were based on Tony's tax return for the 2019 tax year, and the amount for these payments varied from person to person. To see the exact amount you should have received, you can access your IRS account and check the total amount for the first, second and third stimulus check payments. If Tony’s AGI were more than $75,000, the amount of payment/credit would have gone down by 5% of the amount exceeding the AGI. So if your AGI is $80,000, the full amount of $1,200 will decrease by 5% of $5,000. This would have made the total payable amount $1,200 - (5% of $5000=$250) = $950. Here’s a quick infographic:

Let’s say Tony married Alison in April of 2021, and their combined AGI is now around $135,000. They would then receive a combined stimulus payout of $2,800 ($1,400 + $1,400) for the third payout. They can also apply to receive another payment if they had a child by December 2021, through the child tax credit.

In another scenario, Ellie is mentioned as a dependent on her parent’s 2020 tax return but was no longer in that age bracket in the latter part of 2021 but did not receive a stimulus payment because of her status as a dependent on her parents' 2020 tax return. In Ellie's 2021 tax return, she was eligible to file for the third stimulus check of $1,400. She can add other credit schemes like the Education Tax Credit to her tax filing, if she’s eligible for it, and avail a larger amount.

How to claim Recovery Rebate Credit?

To claim the credit, you must first be sure that you did not receive a stimulus payment or the payment you received was not the full amount you qualified for at the time. If you're certain that one of these is true, then you can mention this in your 2022 tax return.

I did not file my 2021 tax return. Can I apply for Recovery Rebate Credit?

When you are not a dependent and do not fall into any of the tax brackets, you can still receive a Recovery Rebate Credit. Even if you have never filed a tax return, you can still be eligible. In any case, you need to file a tax return to get the stimulus payout or the Recovery Rebate Credit.

How do I receive a refund of the Recovery Rebate Credit?

If the IRS determines that what you in taxes is less than your Recovery Rebate Credit, you’ll receive a direct payment of the difference. The IRS determines your refund amount based on IRS tax filing in the previous year.

Tax tips for freelancers

Know about tax forms, top deductions and other tax related information for you

Connect with us

Try filtering with

What’s FlyFin?

With all the regulations and conditions around taxes, understanding tax credits like the Recovery Rebate Credit can be confusing. FlyFin makes it easier with information about EV tax credits, the Earned Income Credit and Dependent Care Credit, which can be crucial to lowering your tax bill. FlyFin A.I. has a team of tax experts supporting you 24/7 with answers to questions about the Recovery Rebate Credit, or any tax questions. For freelancers and self-employed individuals, FlyFin's A.I.-driven tax machine finds every possible deduction and helps you understand whether you're eligible for tax credits.

Need help navigating your taxes?

FlyFin's A.I. and 24/7 CPA support will guide you.

Get Started

Is this article helpful for you?

Yes

Freelancers save $3,700 extra

Blog Privacy policy Terms of service Contact Us Sitemap

For more information & tax tips follow us on

More about FlyFin

FlyFin is an A.I.-powered tax service designed for freelancers to make taxes effortless. Right from finding tax write-offs to filing your taxes in just 5 mins, FlyFin is the only app you need. A.I. scans all your expenses and finds all tax deductions that apply to you. If you’re unsure about an expense, you can seek unlimited help from the CPAs.

Automated Tax Deductions

FlyFin is the world’s first A.I. tax service designed for freelancers and gig workers to help them navigate through all their expenses. It’s not only simple to use but also makes your taxes effortless and accurate

The A.I. finds every tax deduction, eliminating 95% of your work, and provides you with the most accurate tax amount.
Expert tax CPAs ensure 100% accurate tax filing. Get a 100% accurate tax review and preparation.

With FlyFin you can:

Automate bookkeeping
Find tax write-offs automatically
Eliminate 95% of your work.
CPAs ensure 100% accuracy.
File taxes online in just 5 minutes

The A.I. automatically finds tax deductions every time an expense occurs. It is Simple, Accurate, and Effortless.

Simple: There seems to be quite a lot of confusion with regards to the self employed tax. FlyFin is here to bridge the gap between freelancers and the tax policies set by the IRS.

Effortless: FlyFin is the world’s first A.I. tax service for freelancers, it is easy to set up and absolutely free effortless to use.

Accurate: The A.I. scans for every possible tax deduction & eliminates 95% of your work, and provides you with the most accurate tax amount.
Moreover, FlyFin notifies you about important ongoing deductions, recommendations on how to take self-employment tax deductions, and any other critical IRS tax payments reminders such as quarterly taxes due time or changes in the tax code.

CPA Assistance

Can I claim the home office deduction? Travel, Rent, and Mileage deductions? Artificial Intelligence and our expert tax CPAs work together to help you maximize your freelance tax deductions. You ask a question, and our tax CPAs will respond within 24 hours.

FlyFin is powered by A.I. and backed by CPAs to provide you with an accurate tax review. File your 1099 form with the help of FlyFin’s expert CPA team and deduct all your business expenses, such as home office expenses, and you can claim office equipment tax deductions as well.

Our expert team of CPAs is well-versed in all aspects of US & International taxes. They ensure 100% accurate tax review and preparation.

What’s more, you get a detailed tax report which includes all your category-wise expenses and an in-depth summary of your deductions. You can even file taxes directly through FlyFin with the help of the CPAs or you can also export data in IRS format if you want to file elsewhere.