Don’t Miss Out: A Guide to Recovery Rebate Credit for U.S. Expats

Jan 1, 2024

If you’re one of the many U.S. expats who are owed stimulus money, you can still claim it through Recovery Rebate Credit. As the matter of fact, 2024 is the last year to get all the stimulus checks you might have missed! It will either boost the amount of your tax refund or reduce the taxes you owe to the IRS. Either way – you win! Don’t miss out on the opportunity to get the money you’re entitled to. Keep reading to find out how the credit works and what makes you eligible to qualify.

What is Recovery Rebate credit?

Recovery Rebate Credit is part of the Covid-19 Economic Relief program. The credit makes it possible for those who didn’t receive Economic Impact Payments (also known as stimulus payments) to claim their missing money. So if you were eligible for stimulus payments but did not receive them (or you received a partial payment), you can claim them through Recovery Rebate Credit on your tax return.

How to claim Recovery Rebate Credit

Getting your Recovery Rebate Credit is not too complicated. You just need to file the right tax return and you’re good to go. For stimulus payments made in 2020 that you haven’t already received, you can claim the Recovery Rebate Credit on your 2020 tax return. And for payments made in 2021, you will need to file a 2021 tax return.

Even If you don’t usually file taxes but are otherwise eligible for stimulus checks, you will still need to file in order to get your money. And keep in mind – 2024 is the last year to do it! If you need any help along the way, don’t hesitate to reach out to us.

Recovery Rebate Credit vs Stimulus Checks

To put it simply – stimulus payments were actually just advanced payments of the tax credit. The U.S. government provided them in response to COVID-19, aiming to get money into the hands of taxpayers as fast as possible, without having to wait for them to file their tax returns.

In total, three rounds of stimulus checks have been paid out. The amounts you were eligible to receive varied depending on your filing status and other factors.

Recovery Rebate Credit 2020

The first and the second stimulus checks were advance payments of the 2020 Recovery Rebate Credit claimed on a 2020 federal tax return. They were sent out in 2020 and early 2021. Here’s how much the first 2 rounds of Stimulus Checks are worth:

  • The first stimulus payment provided up to $1,200 per eligible individual, while a married couple filing a joint return received up to $2,400. An additional $500 was provided per dependent child.
  • The second stimulus payment provided up to $600 for eligible single individuals, and up to $1,200 for married taxpayers filing a joint tax return. An additional $600 was provided per each dependent child.

Recovery Rebate Credit 2021

The third round of stimulus checks (including the plus-up payments) was an advance payment of the 2021 Recovery Rebate Credit claimed on a 2021 tax return. These checks were issued starting in March 2021 and continued through December 2021.

  • The third stimulus check of up to $1,400 was made available per eligible individual. A married couple filing a joint return could get up to $2,800. An additional $1,400 was provided for a dependent of any age.

Eligibility for the Recovery Rebate Credit

The eligibility rules for the recovery rebate credit are basically the same as they were for the Economic Impact Payments (stimulus checks).

The only major difference is that eligibility for the stimulus check was typically based on the information that the government had at the time of distributing the payments. On the other hand, eligibility for the credit is based on the IRS’s most recent information for you on file.

You’re generally eligible to claim the Recovery Rebate Credit if you meet the following requirements:

  • You are a U.S. citizen, Green Card Holder, or qualifying resident alien.
  • You are not a dependent of another taxpayer
  • You have a valid Social Security number (SSN)
  • You did not receive the entire credit through previously issued stimulus payments (this means you received a partial payment or missed an entire check)

If you’re claiming additional stimulus money based on your dependent children, they also need to have a valid SSN or adoption taxpayer identification number (ATIN).

Nonresident alien individuals, estates, and trusts don’t qualify for the credit. On the other hand, eligible U.S. expats who are thinking about renouncing their U.S. citizenship will be able to claim the credit. If you’re one of them, don’t let the cost of renunciation discourage you. Your Rebate credit will more than likely cover any fees and expenses you might have.

After meeting the qualification requirements above, the individual’s adjusted gross income (AGI) must fall within certain income limits to receive the full credit. Find more information on income requirements in the section below.

How to calculate Recovery Rebate Credit

As with the stimulus checks, calculating the amount of your recovery rebate credit starts with a “base” amount. If you’re eligible for the full credit, the base amount you may receive is up to $3,200 for single filers or $6,200 for married couples filing a joint return. You can claim even more money in case you have children or adult dependents.

The actual amount of your Recovery Rebate Tax Credit is based on the following:

  • Filing status – as we already mentioned, the base amount you are eligible to receive differs depending on your filing status (Single Filer or Married Filing Jointly)
  • Number of qualifying children or adult dependents – you are eligible to receive a certain amount of money per each child (or an adult-dependent in case of a third stimulus check)
  • Adjusted gross income – After adding up the base amount and any additional amount for your dependents, you then need to determine if your recovery rebate credit is reduced because of your income. If your income is less than $75,000 (for Single Filers), $112,500 (for Head of Household filers), or $150,000 (for Married Couples Filing a Joint Return), you can get the full benefit. The credit starts to decrease for people with higher earnings that exceed these income thresholds.
  • Amounts of Stimulus Payments you previously received – Finally, you need to subtract the total amount of stimulus checks and “plus-up” payments you received in the past.

If you have already received the full amount of stimulus payments that you’re eligible for, you don’t qualify for any additional credit. However, if you ended up receiving more than you qualified for, you are not required to pay it back.

How to track your stimulus checks

What if you forgot the exact amount of money you received through stimulus checks? There are several ways to find out your payment status:

  1. The amount received from the first stimulus check can be found on IRS Notice 1444, the second stimulus check on Notice 1444-B, and the third on Notice 1444-C, which were all sent out by the IRS. Through March 2022, they also sent out Letter 6475 which confirmed the total amount of the third stimulus check and any received “plus-up” payments.
  2. To find the amount to subtract from the credit, you can also check your IRS online account (if you have one). The exact amount of stimulus payments you previously received is listed under the Tax Records tab – “Economic Impact Payment Information.”
  3. You can also locate the amount of your first, second, and third stimulus payments by checking your bank statements, in case you had them direct deposited. These payments should be labeled “IRS TREAS 310” with codes “TAXEIP1” (1st payment), “TAXEIP2” (2nd stimulus payment), or “TAXEIP3” (3rd stimulus payment).
  4. Finally, you can request a tax account transcript from the IRS. All transcript types are available online through the IRS’s Get Transcript service. To have your transcript mailed to you – submit a Form 4506-T or make a request using the IRS’ automated phone transcript service at 800-908-9946.

If the above options don’t work for you, you can provide the amount of your stimulus checks based on your memory. If you misremember the exact amount and make a mistake, the IRS will correct the error for you. In case this happens, they will send you a notice of any changes made to your return.
But should you do it? Keep reading to find out.

When will I get my Recovery Rebate Credit?

You will most likely get Recovery Rebate Credit as part of your tax refunds. But how long will it take to get your money? Depending on the filing options you chose and the accuracy of the information, it usually takes between 3 to 8 weeks to receive your refund.

Making a mistake will not result in financial loss, but might require extra time to fix. Any errors on your federal tax return, including those related to calculating the recovery rebate credit can cause delays and prolong the wait for your refund. So if all the information on your tax return is correct, it might take just a couple of weeks. But If there are errors or red flags, it can go on for months.

You can receive your payment faster through direct deposit rather than waiting for it to arrive in the mail. Depending on your preferences, your refund can be deposited into your bank account, prepaid debit card, or mobile app.

Can I still claim the credit if I already filed my 2020 or 2021 taxes?

Since many individual taxpayer situations change from year to year, some people who were not eligible in the past may become eligible in 2023. Here are some situations when this might happen:

  • Some people may have received less than the full Stimulus Payment because their adjusted gross incomes were too high. A change in income could make a filer eligible for more credit.
  • Eligible taxpayers can get additional stimulus money if their family expanded in the meantime through the birth or adoption of a child.
  • Eligible people who did not have a valid Social Security Number but acquired Social Security Number in the meantime may now be able to qualify.
  • Individuals who were claimed as dependents in the past (and were, therefore, ineligible) may qualify for the credit if they are no longer dependents. This also includes some first-time filers, like college students for example. Many college students are first-time filers, as they are no longer claimed as their parents’ dependents. They can also claim the credit if they meet the eligibility requirements.

Recovery Rebate Credit FAQ

  • How do I claim Recovery Rebate Credit on my tax return? You need to file a tax return for the year in which the credit applies, and include information on the stimulus payments received. You can report the total amount of the Recovery Rebate Credit that you are claiming using Form 1040 or 1040-SR (enter the amount of your credit on line 30).
  • How to Claim the 2021 Recovery Rebate Credit? Following the instructions above, file a 2021 federal tax return and include the information on any stimulus payments you already received.
  • How to Claim the 2020 Recovery Rebate Credit? Simply file your 2020 federal tax return and include all the relevant information on the stimulus payments you received in the past.
  • What if my stimulus check was lost? If you suspect that your check was lost, stolen, or destroyed – don’t file for the Recovery Rebate Credit but instead ask the IRS to trace the payment. If the check was not cashed, the IRS will reverse your payment and notify you. On the other hand, if the check was cashed, the Treasury Department’s Bureau of the Fiscal Service will send you a claim package that includes a copy of the cashed check.
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