2020 taxes and EIP 2

[cnansen]

We (my wife and I) received the full amount for the first stimulus check. Our 2018 income was used and we were under the cutoff. Due to inheritance our 2019 income was over $200,000 so we did not get the second (EIP 2) check.

Now I am figuring our 2020 taxes and we are back around the $150,000 cutoff. It looks like we can get most of the $1,200 stimulus as a Recovery Rebate Credit on our taxes.

(a) is this correct? and (b) does that mean they will use our 2020 taxes for any future stimulus payments?

[DaveF1006]

According to the IRS, you are eligible under the following paramenters.

• $150,000  if married and filing a joint return
• $112,500 if filing as  head of household or
• $75,000  for eligible individuals using any other filing status
  Your payment will be reduced by 5% of  the amount by which your AGI exceeds the applicable threshold above.

What most don't realize is that you are still eligible on income over $150K but it is reduced 5% by the amount that the AGI exceeds $150K so it sounds like you may have been eligible for the reduced credit.

As far as if future stimulus payments are based on this year's AGI, details have not been released because it hasn't been passed yet. once it passes, there should be more details that should be released.

[Edited 02-23-2021|04:29 PM PST]

[cnansen]

Our AGI in 2018 was under $150,000 and that was used for the first stimulus payment. Our AGI in 2019 was over $200,000 due to one time inheritance income. We didn't get the second stimulus payment as it phased out at $200,000. Our AGI in 2020 is slightly over $150,000.

When doing our 2020 taxes with Turbotax the Recover Rebate Credit form popped up - I didn't know about this form. Completing this form (entered $2,400 for first, $0 for second stimulus check) it show we get a $997 Recovery Rebate Credit. But everything I read says they are using the 2019 tax info which means we shouldn't get anything for the second stimulus.

[CatinaT1]

The payments were an advance credit for 2020.  2018 or 2019 information was used in determining the payments since 2020 tax returns had not been filed at the point the stimulus payments were sent out.  They are being reconciled when you do your 2020 return.  In some cases, people may have been given a stimulus payment based on their 2019 income that did not qualify based on their 2020 income and vice versa.  Your 2020 information is what ultimately decides your eligibility.