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Recovery Rebate Credit

Categories Tax Tips (Fed)

Forget About the Economic Stimulus Payment: For the 2009 Filing Season it’s Called a Recovery Rebate CreditThe recovery rebate credit is a one-time benefit for people who didn’t receive the full economic stimulus payment last year. Taxpayers can file to obtain the recovery rebate credit even if they do not otherwise have a 2008 return filing requirement. People in the following categories may be eligible for the recovery rebate credit this year:

  • Individuals who did not receive an economic stimulus payment.
  • Individuals who did not receive an economic stimulus payment and do not pay income tax but have at least $3,000 in qualifying income for 2008.
  • Those who received less than the maximum economic stimulus payment in 2008 — $600 per taxpayer; $1,200 if married filing jointly — because their qualifying or gross income was either too high or too low.
  • Families who gained an additional qualifying child in 2008.
  • Individuals who could be claimed as a dependent on someone else’s tax return in 2007, but who cannot be claimed as a dependent on another return in 2008.
  • Individuals who did not have a valid Social Security number in 2007, but who were issued one in 2008.The recovery rebate credit is claimed on Form 1040, 1040A, or 1040EZ. Unlike the economic stimulus payment, the recovery rebate credit will be included in the tax refund for 2008 and will not be issued as a separate payment.The amount of the 2008 economic stimulus payment, if any, must be known to determine the amount of the recovery rebate credit. This amount was provided on Notice 1378, Economic Stimulus Payment Notice, sent by the IRS to taxpayers who received a payment. Taxpayers can also look up the amount of their stimulus payment at How Much Was My 2008 Stimulus Payment? if they don’t have Notice 1378.Taxpayers who are not required to file a return, but want to claim the rebate, must file Form 1040, Form 1040A or Form 1040EZ to claim the credit. 

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