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2021 covid relief and refund adjustment

My return for 2021 was just processed, it was complicated because my wife had an ITIN number. Anyway, we were supposed to get a refund of $2600 but they adjusted it to $250. They said that because she had an ITIN number, we didn't qualify for the 2021 covid relief. How does this math add up and is our government really that racist to penalize both of us?

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4 Replies

2021 covid relief and refund adjustment

One of the requirements to receive the EIP payments  (stimulus) or the recovery rebate credit for 2020 and/or 2021 was that you had to have a Social Security number.   An ITIN did not qualify for the stimulus payment/recovery rebate credit.   

 

From the IRS:

 

 

QC1. Eligibility Requirements: What are the eligibility requirements for the credit? (added January 13, 2022)

 

A1. The eligibility requirements for the 2021 Recovery Rebate Credit are the same as they were for the third Economic Impact Payments, except that the credit eligibility and amount are based on your 2021 tax year information. Third Economic Impact Payments were based on your 2019 or 2020 tax year information. If you didn’t qualify for third Economic Impact Payment or did not receive the full amount, may be eligible to claim the 2021 Recovery Rebate Credit based on your 2021 tax information. If you received the full amount for the third Economic Impact Payment, you won’t need to include any information about it when you file your 2021 tax return. You received the full amount of your third Economic Impact Payment if the total amount was: • $1,400 for an eligible individual who has a valid Social Security number (SSN) ($2,800 for married couples filing a joint return if both spouses have a valid SSN or if one spouse has a valid SSN and one spouse was an active member of the U.S. Armed Forces at any time during the taxable year) plus • $1,400 for each qualifying dependent who has a valid SSN or Adoption Taxpayer Identification Number (ATIN) issued by the IRS Generally, if you were a U.S. citizen or U.S. resident alien in 2021, you were not a dependent of another taxpayer, and you either have a valid SSN or claim a dependent who has a valid SSN or ATIN, you are eligible to claim the 2021 Recovery Rebate Credit. You may also be eligible if you file a joint return with your spouse, you or your spouse were a U.S. citizen or U.S. resident alien in 2021, and either you, your spouse, or both of you, have a valid SSN or you claim a dependent who has a valid SSN or ATIN. Your credit amount will be reduced by the amount of your third Economic Impact Payment. It is then reduced if the adjusted gross income (AGI) amount on line 11 of your 2021 Form 1040 or Form 1040-SR is more than: • $150,000 if married and filing a joint return or filing as a qualifying widow or widower • $112,500 if filing as head of household or • $75,000 for all others. No credit is allowed when AGI is at least the following amount: • $160,000 if married and filing a joint return or if filing as a qualifying widow or widower • $120,000 if filing as head of household or • $80,000 for all others. For example, a single person with no dependents and an AGI of $77,500 will have a maximum credit of $700 (half the full amount). Married taxpayers who file a joint return that claims two qualifying dependents and an AGI of $155,000 will have a maximum credit $2,800 (again, half the full amount). You aren’t eligible to claim the 2021 Recovery Rebate Credit if any of the following apply: • You could be claimed as a dependent on another taxpayer’s 2021 tax return • You’re a nonresident alien. • You don’t have a valid SSN issued to you by the due date of your tax return and you don’t claim a dependent who has a valid SSN or ATIN. Also, estates, trusts, and individuals who died before January 1, 2021 do not qualify for the 2021 Recovery Rebate Credit. If your income is $73,000 or less, you can file your federal tax return electronically for free through the IRS Free File Program. The fastest way to get your tax refund is to file electronically and have it direct deposited, contactless and free, into your financial account. You can have your refund direct deposited into your bank account, prepaid debit card or mobile app and will need to provide routing and account numbers.

 

 

Q C2. Not Eligible for Third Economic Impact Payments: If I wasn’t eligible for a third Economic Impact Payment, am I not eligible to claim the 2021 Recovery Rebate Credit? (added January 13, 2022)

 

A2. If you were not eligible for the full third Economic Impact Payment, you may be eligible to claim the 2021 Recovery Rebate Credit since it’s based on your 2021 tax return information. Third Economic Impact Payments were based on your 2019 or 2020 tax information. Factors that may affect eligibility for the 2021 Recovery Rebate Credit include: Income change: Some people may have received less than the full third Economic Impact Payment because their adjusted gross income was too high. Lower income in 2021 could make you eligible to claim the 2021 Recovery Rebate Credit. Qualifying dependent: If an individual became your dependent in 2021, including by birth or adoption, you may be eligible to claim the 2021 Recovery Rebate Credit for the dependent on your 2021 tax return that you file in 2022. No longer a dependent: Individuals who were claimed or could be claimed as a dependent on someone else’s tax return for 2019 or 2020 may now be eligible if they can’t be claimed as a dependent on someone else’s tax return for 2021. Social Security number: Individuals who did not have a Social Security number in 2021 but are issued one by the due date of their 2021 tax return (including an extension if the extension was requested by the due date) may now be eligible. You’ll claim the 2021 Recovery Rebate Credit when you file your 2021 tax return. If your income is $73,000 or less, you can file your federal tax return electronically for free through the IRS Free File Program. The fastest way to get your tax refund is to file electronically and have it direct deposited, contactless and free, into your financial account. You can have your refund direct deposited into your bank account, prepaid debit card or mobile app and will need to provide routing and account numbers. 

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

2021 covid relief and refund adjustment

Congress passed the law.  (Democratic controlled Congress, for what it's worth.)  The stimulus was limited to people who were US citizens or permanent residents (green card holders).  Temporary residents, visitors, and residents who did not yet have a green card were not eligible.

2021 covid relief and refund adjustment

@markwillsey10-gm - Congress discriminated based on citizenship - not on race.  

They weren't going to give the taxpayer's money to non-citizens..... isn't that rationale to you? 

2021 covid relief and refund adjustment

@markwillsey10-gm -

 

what was the EXACT amount of the adjustment?  the 3rd stimulus was worth $1400.  What did you have on Line 30 of Form 1040?

 

What did the letter state specifically? 

 

If you are a US CITIZEN or Resident Alien ("green card holder"), then you were eligible for the stimulus.

 

Unraveling why the IRS adjusted the return by $2350 begins with understanding Line 30 of Form 1040.

 

Do you have any children? (if so, how many and their ages?)

 

and please confirm you are a US CItizen or Resident Alien.   Why do you think YOU were penalized? 

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