This will be a frustrating tax season for a lot of reasons. But the overarching concern for millions of Americans will be how to claim their stimulus payments.
And it’s all going to come down to what people put on Line 30 on their tax form. That’s the line on Page 2 where you claim the “Recovery Rebate Credit,” better known to struggling households as the stimulus payment.
Here’s what you need to know about claiming a stimulus payment on your tax return this year.
Can you recap the amounts of the stimulus payments?
First Round: The Coronavirus Aid, Relief and Economic Security (Cares) Act, which passed in the spring, authorized payments of up to $1,200 for individuals and $2,400 for couples filing jointly, based on 2018 or 2019 federal returns. There’s an extra $500 payment for eligible children under 17.
The amount of your stimulus payment is based on your adjusted gross income (AGI). But you don’t have to have an income to qualify for a payment.
Second Round: The more recent Coronavirus Response and Relief Supplemental Appropriations Act, passed at the end of December, called for additional stimulus payments of up to $600 per adult ($1,200 for couples), plus $600 for each qualifying child under 17.
Possible Third Round: The details are still being negotiated in Congress, but the latest stimulus relief under discussion would distribute $1,400 payments to individuals and $2,800 to married couples. Under the Democratic plan, parents would receive an additional $1,400 per qualifying child. There are also discussions of giving money to parents for adult dependents such as college students or adults with disabilities living at home.
Who has to fill in Line 30?
If you received the full amount due for the first and second round of stimulus payments, including any payments for eligible children, you don’t have to do anything.
“You only make an entry on Line 30 if you are actually claiming the credit,” according to IRS spokesman Eric Smith. “Otherwise, you leave it blank. “If you already know you already got the full amount, there’s no reason to bother with any of it.”
There’s already been some confusion — even among tax professionals — about Line 30, with one preparer telling me he thought people had to put down how much they received for both payments. He was wrong.
You may claim the credit if you didn’t get a stimulus payment or if you didn’t get the full amount you were due for yourself or for any eligible children, says Lisa Greene-Lewis, a certified public accountant and tax expert for TurboTax.
The stimulus payments were based on your 2018 or 2019 tax year information. However, the eligibility for the recovery rebate credit is based on your adjusted gross income on your 2020 tax return. So, if you earned too much and didn’t get advance stimulus payments but your income dropped last year, you may still be eligible to claim the credit when you file your return.
What exactly do I put on Line 30?
You will only fill in the amount of the total credit you are due from either the first or second round or both. If you received a partial payment you would include the balance of the credit you are owed.
You may have received the full stimulus payment for yourself, but you had a child in 2020. If you’re eligible for both payments you would claim the full $1,100 for the baby ($500 from the first stimulus round and $600 from the second).
There’s a worksheet with the 1040 instructions to help you determine your recovery rebate credit amount. A tax professional or do-it-yourself tax software will help you figure out how much to claim.
Also, you don’t need to file the worksheet with your return. “It’s merely a worthwhile mechanism for arriving at the correct amount, if any, to put on Line 30,” said the IRS’s Smith.
I can’t recall how much I received. How do I verify my payment?
You should have received IRS Notice 1444 for the first economic impact payment, and Notice 1444-B for the second one.
“Taxpayers should keep these notices for their records,” says Sarah Shannonhouse, manager for tax practice and ethics with the American Institute of CPAs.
How can I get a replacement notice if I’ve lost it or never received one?
You can find a copy online if you have an IRS tax account. Go to irs.gov and search for “View Your Account Information.”
The amounts of your stimulus payments are found under the tax records tab. The IRS says you should find two separate amounts: the total amount of your first economic impact payment, if you’ve received multiple payments, and the amount for your second payment.
If you and your spouse received joint payments, each of you will need to sign into your own account to retrieve your separate amounts, the IRS says.
If you don’t have a tax account, you’ll have to create one. But this may not be easy for some people.
The IRS has to verify your identity. It’s supposed to take about 15 minutes. However, if you get stumped on the security questions or you don’t have a US-based and text-enabled mobile number connected to your name, or the IRS can’t verify your number (this happened to me), you’ll have to wait for an activation code to be mailed.
The IRS says to allow 10 business days for delivery. But when you factor in delays at the dysfunctional US Postal Service, that timeline may be wishful thinking.