The purpose of Recovery Rebate Credit is to provide financial help to those people who did not get the third stimulus check or just got a partial one. The Government is encouraging people to use this credit for their tax returns. However, some people can also claim the recovery rebate credit after receiving the third stimulus check with the motive to reduce the tax and to increase their refund. The eligibility criteria are the same as the people followed during the third stimulus checks.
Comparison of Stimulus Check and Recovery Rebate Credit
The qualification of the people to receive the stimulus checks depends solely on 2019 and 2020 tax return information. However, for the financial help provided by recovery rebate credit, the only information required is about 2021 tax returns. Thus, only a person can claim either credit or stimulus check and not both. Moreover an individual needs to be a citizen of the U.S. or an alien resident of the country in 2021. Any individual who is dependent on the tax returns of someone else cannot opt for this credit just by showing the number of social security.
The calculation of recovery rebate credit can be conducted similarly to checks by starting with a base amount. The approximate base amount for a single person is $1,400 and for married people, $2,800. Each dependant who claims a return on another person can have another additional $1,400. This credit will be calculated with the help of software dedicated to tax preparation.
In case an individual files a credit digitally, or opt for the direct deposit option, the credit will be given by three weeks if there is no problem with the claim. The IRS recommends that people contact them in case 21 days pass by. The tracking can be conducted by just giving the social security number, the expected amount of refund, and the status of the filing.
