Tax Credits in 2024: How to Claim the Recovery Rebate Credit

Tax Credits in 2024: How to Claim the Recovery Rebate Credit
Updated on April 30, 2024

The Economic Impact Payments sent out during the COVID-19 pandemic have been a critical lifeline for many Americans—including Americans living abroad. However, not everyone received stimulus checks for the full amount available. If that’s the case for you, don’t worry. You may still be able to claim the balance of your stimulus payment through the IRS Recovery Rebate Credit. 

What Is the Recovery Rebate Credit? 

Economic Impact Payments, also known as stimulus payments, were a series of three tax credits sent to most Americans to help ease the financial burden of the COVID-19 pandemic. These were advance-on refundable credits that could be claimed on Americans’ annual income tax returns. The first two rounds were considered part of the 2020 tax year, while the third was considered part of the 2021 tax year. 

To get the payments to Americans as quickly as possible, the IRS used the most recent tax information they had on file to determine who was eligible and calculate how much they should receive. For most Americans, that worked just fine. 

However, other Americans’ financial situations changed from 2020 to 2021 and beyond, meaning that they received less than they should have (or perhaps nothing at all). If this is the case for you, you may be able to use the Recovery Rebate Credit to claim the full amount as a refundable tax credit. 

Who Is Eligible to Claim the Recovery Rebate Credit? 

When considering the Recovery Rebate Credit, the first question to answer is who was eligible for the Economic Impact Payments. To qualify for any of the three stimulus payments, all of the following had to apply at the time: 

  • You were a US citizen or US resident alien 
  • You had a valid Social Security number that qualified you for employment 
  • You weren’t claimed as a dependent by another taxpayer 

Beyond these standards, there were certain income thresholds for claiming the full amount. If your income exceeded the relevant threshold, the amount you could claim was reduced. For example, the income threshold for single filers was $75,000. If your income for 2020 or 2021 was higher than that, you could still receive a stimulus payment, but not for the full amount. 

The deadline to file a 2020 tax return and claim the Recovery Rebate Credit is May 17, 2024. This is three years from the original deadline of May 17, 2021, which is consistent with the IRS policy that gives taxpayers three years to file a return and claim a refund. For the 2021 Recovery Rebate Credit, taxpayers have until April 15, 2025, to file.

But even if you didn’t receive an Economic Impact Payment (or you didn’t receive the full amount), you may still be eligible for the credits if your situation has changed since the payments were sent out. Let’s look at some examples. 

Example #1 

Amy had never filed a US tax return when the stimulus payments were sent out. Because the IRS used Americans’ most recent tax returns to determine whether they qualified for a stimulus check (and how much they could claim), she wasn’t in the system. Thus, she never received any money. 

Example #2 

Alan worked as a dental hygienist in 2019. In 2020, he was laid off. His income dropped for that year, meaning that he qualified for a higher stimulus payment. However, because the IRS used his 2019 income level to calculate his eligibility, he received a lower amount than he was owed. 

Example #3 

Hector and Jessica claimed one child as a dependent on their 2020 tax return. Then, they had another child in 2021. Because the IRS only had a record of one child at the start of 2021, Hector and Jessica didn’t receive any additional financial relief for their second child when the third stimulus payment went out. 

Some other possible examples include: 

  • You haven’t filed a US tax return in several years 
  • You are no longer claimed as a dependent by someone else, such as your parents 
  • You got married 
  • You are divorced or separated from a spouse, and you and your co-parent alternate claiming your children from year to year 

If you think you might have missed out on the full amount you were owed for one or more stimulus payments, don’t worry. You can still claim your due using the Recovery Rebate Credit. 

How Do I Claim the Recovery Rebate Credit? 

To claim the Recovery Rebate Credit, you must file a US tax return for the year in which the Economic Impact Payment was sent out. For example, if you’re hoping to claim one or both of the two payments sent out in 2020, you will need to file a 2020 tax return. (Even if you weren’t otherwise required to file.) The same is true for the third stimulus payment sent out in 2021. 

When filing your tax return, you will use Line 30 of Form 1040 or Form 1040-SR to claim the Recovery Rebate Credit. (You will find instructions for how to calculate the credit in the instructions for either form.) Once you’ve calculated your credit and completed your tax return, simply file it as you usually would. 

What Other Tax Credits Are Available for Expats in 2024? 

The IRS provides a wide variety of tax credits, deductions, and exclusions for Americans living abroad. Aside from the Recovery Rebate Credit, you may also be eligible to claim one or more of the following: 

Get Expert Help with Your Expat Taxes 

All US citizens are required to file a US tax return, and filing allows you to claim a variety of tax credits, such as the Recovery Rebate Credit. That doesn’t mean it isn’t a hassle, though. 

Fortunately, you don’t have to do it alone. At Greenback Expat Tax Services, we help Americans living abroad file their expat taxes accurately and on time. Just contact us, and we’ll be happy to help you in any way we can. 

Click here to get started with your expat tax return

Confused about when you need to file? We can help.

When you live in the US, tax day is simple: April 15th! When you move abroad, it’s not so straightforward! Learn about all the expat deadlines and extensions you need to know to file.

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