Philadelphia is an exciting place to live. The living cost is not high as the other big cities, and the city offers a rich history and diverse culture. All was well for residents of Pennsylvania’s biggest city before the Covid-19 pandemic slowed down economic activities all around the world.
The pandemic affected even the financially strong citizens. That is why governments around the world announced financial stimulus packages in one form or another. US citizens with adjusted gross income not more than $75,000 were eligible to receive Economic Impact Payment Twice since the pandemic.
Economic Impact Payment
The First Impact Payment was $1200 for a single individual and $2400 for married, only if the married couple files tax returns jointly. An additional $500 was given for each dependent child. The treasury then supported struggling individuals and families with a second Economic Impact Payment in December.
Second Economic Impact Payment was $600 for individuals and $1200 for married couples filing joint tax returns; this time, the amount for qualifying children was increased by $100 to $600 each. If you are worried as to why you haven’t received an Economic Impact Payment cheque yet, don’t worry. You are not alone. Almost 12 million of 80 million Americans still haven’t received their stimulus cheques. Apart from these 12 million, about 250 million Americans didn’t qualify the criteria for Economic Impact Payment.
Are these Americans left alone in this pandemic? The answer is no.
Taxpayers that haven’t received their payments yet or didn’t qualify for economic stimulus payments can now claim Recovery Rebate Credit under Coronavirus Aid, Relief, and Economic Security Act and COVID-related Tax Relief Act.
Under this credit relief, taxpayers will either increase their tax credit or decrease the amount of tax they owe to the IRS. Individuals who were lucky enough to receive stimulus payments cannot apply for this credit, and they will file their tax returns as they normally do.
How to Qualify for Recovery Rebate Credit?
All US citizens who did not receive the full amount of one or both Economic Impact Payments may claim this credit relief. The Recovery Rebate Credit can be claimed for the tax year 2020 on Form 1040 or 1040-SR.
To determine your eligibility for this credit rebate, you need to fill out the Recovery Credit Worksheet, which can be found in instructions for Form 1040 and Form 1040-SR.
If you think you are eligible for this, you will also be eligible for free electronic filing of tax returns through eFile.
eFile is the electronic filing of tax returns through online software, which is absolutely free (if your income is equal to or less than $72,000), which is almost equal to the threshold for this Recovery Rebate Credit.
It is pertinent to mention here that during these tough times where social distancing is a crucial part of defeating this virus and saving you and your family from disease, the best way to get the tax refund is to combine electron tax filing with direct deposit.
By doing this, you will be able to receive the refund amount directly into your accounts, which is the fastest and safest way to do it.
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Zee Maq is a content writer who specializes in writing business and finance content. She has nine years of experience and loves to provide problem-solving content to help people tackle challenges in their everyday lives.