The Recovery Rebate Credit on your 2020 tax return is based on information in your 2020 tax return. If you claimed a qualifying dependent child age 16 or under on your 2020 tax return, that information will be used to determine the amount of stimulus payments you should receive.
Once that total eligibility amount is established based on your 2020 tax return, the credit is reduced by any amounts you actually received in stimulus rounds one and/or two. Any remaining credit is added to you tax return.
The amount is added to your return on line 30, of your form 1040. You can see the form using TurboTax online by following these steps.
- Click "Tax Tools" in the left hand menu
- Click "Tools"
- Click "View Tax Summary"
- Click "Preview My 1040" in the left hand menu
So if you claim your qualifying daughter on your 2020 tax return your eligibility amount would be:
Round one: $1200 plus $500 total $1700
Round two: $600 plus $600 total $1200
Total: $2900
If you received $1800 in stimulus payments because you did not claim your daughter in 2019, the remaining $1100 will be added to your return.
That Recovery Rebate Credit can only be reduced to zero. So if one received more payments in rounds one and two than the eligibility amount based on the 2020 tax return there is no penalty. The tax on the return is cannot be increased due to stimulus payments.
So if you do not claim your daughter in 2020 and received $2900 as she was on your 2019 return, your credit will be zero on your 2020 return.
Here is a link with more information on the Recovery Rebate Credit.
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