How to Claim the Recovery Rebate Credit

If you didn’t receive a stimulus check last year (or if received less than the full amount) and your circumstances have changed such that you now qualify (or qualify for more), then listen up…

The “Recovery Rebate Credit” is a one-time tax credit that’s intended to make up for the unpaid portion of your stimulus payment if (and only if) you received less than you were due. Viewed another way, the stimulus checks that were sent out last year were simply a prepayment of this credit, such that you may not qualify for any additional payment at this time. Confused? Read on.

Eligibility for the Recovery Rebate Credit

If you fall into one of the following categories, you may be eligible for the credit:

  • Individuals who did not receive a stimulus check
  • Individuals who received less than the maximum amount
  • Families that gained a qualifying child during 2008
  • Individuals that were claimed as a dependent on someone else’s return in 2007, but not in 2008
  • Individuals who did not have a valid Social Security number in 2007, but received on in 2008

Note that membership in one of these groups does not necessarily qualify you for this tax credit. Keep reading to learn how you can determine the amount of your Recovery Rebate Credit (if any).

Claiming the Recovery Rebate Credit

The Recovery Rebate Credit can be claimed IRS Form 1040, 1040A, or 1040EZ. Note that the instructions for all three forms include a worksheet to help you calculate the total credit that you are due for tax year 2008. Once you have this number in hand, simply subtract from it the amount of your stimulus check (if you received one). If you can’t recall how much you received, you can look it up on the IRS website.

Still with me? Good. If you do this and you wind up with a positive number, then you can claim a credit for this amount. The instructions for your particular tax form will tell you where to enter this amount. If you wind up with zero or a negative number, you won’t be receiving an additional credit. The good news here is that you won’t have to pay back any overage if you received too much in the first place.

If you don’t wish to run these calculations yourself, you can simply enter “RRC” on the appropriate line on your tax form and the IRS will figure the credit for you. Alternatively, if you’re using tax prep software, the necessary values should be automatically figured for you.

Avoiding Errors

The IRS has reported that upwards of 15% of returns that have been filed thus far have errors when it comes to the Recovery Rebate Credit. Thus, they have published some tips for avoiding problems. In general, they say that:

Some tax returns erroneously claim the credit, do not claim the proper amount of recovery rebate credit or mistakenly enter the amount of the stimulus payment they received on the recovery rebate credit line.

To avoid delays in tax refunds, it is critical that taxpayers know the correct amount of the stimulus payment they received last year, if any, to help determine whether they qualify for the recovery rebate credit now.

The amount of the stimulus payment will not be entered directly on the tax return. For people using a paper tax return, the stimulus payment amount will be required when completing a related worksheet. For people using tax software, the stimulus payment amount will be needed as part of the return preparation process.

The amount of your stimulus payment will be noted on Notice 1378, which the IRS mailed to everyone that received a stimulus payment last year. Alternatively, as noted above, you can lookup the amount of your stimulus check on the IRS website. If neither of these work for you, then you can call the IRS at 1-866-234-2942 and ask them how much you got.

Note that, for most filers, the correct value for this credit will be zero, as most taxpayers received what they were due in the form of their stimulus payment. Once again, if you are unsure how to proceed, you can always let the IRS calculate the amount of the credit for you.

More details: IRS.gov

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    The IRS will automatically run the numbers whether you claimed the credit or not. Some people claim the credit when they don’t actually qualify so their refund goes down. Others don’t claim it when they do qualify so their refund goes up.

  13. Anonymous

    In 2007 I didn’t had SSN and hence didn’t filed for Tax returns last year and also didn’t got the Stimulus Check. Now i am eligible for the Recovery Rebate Credit but my tax preparer did not explicitly mentioned “RRC” in 1040 form and left the place blank. Will I get the Recovery Rebate Credit or not?

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