Your 2020 tax return and the Recovery Rebate Credit

Your Guide to State, Local, Federal, Estate + International Taxation

The 2020 Recovery Rebate Credit (RRC) was implemented during the 2020 tax year on form 1040 as part of the CARES Act which became law in March of that year. The first and second round of stimulus checks were advance payments of the 2020 Recovery Rebate Credit. The RRC ensures that everyone who should have received the first and second Economic Impact Payments, has in fact received them. It also ensures that the correct amount was received.

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There have been some errors reported on claiming the RRC, and the IRS gives guidance on their website on how to correct these errors. However, your 2020 tax return must be filed first. A few issues that have arose include:

  • If you did not claim the 2020 RRC, and you have filed your 2020 tax return already.

You would need to file an amended tax return, form 1040-X, to claim the 2020 RRC. If you electronically filed form 1040, it may be possible to electronically file form 1040-X. If you paper filed form 1040, you will also have to paper file form 1040-X.

  • If you did claim the 2020 RRC, but it was incorrectly calculated.

The IRS will update Line 30 on form 1040 with the correct calculated amount, and you may receive a notice for the change. However, there could be a delay in processing your return should the IRS need to fix an incorrectly calculated amount. You do not need to file an amended tax return, nor does it matter if the original form 1040 was electronically filed, or paper filed.

  • IRS correspondence regarding the 2020 RRC included on your tax return.

The IRS website points to a handful of questions on this matter. Correspondence may or may not require a response, depending on the situation. For more information, please visit the IRS website.

Do you think you may have reporting errors when it comes to claiming the 2020 RRC? Feel free to contact your Henry+Horne professional for help. For more information and resources on COVID-19, see our coronavirus page.

Cierra Tate