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ConfusedByTaxes1983
Level 2

Qualifying for Third Stimulus Retroactively for losing income in 2021

CNBC had an article stating that if you lose income in 2021, then you could qualify for a third stimulus payment retroactively, or even get a larger portion of what you received in March 2021.  We're a family of 4 (me, wife, and 2 young kids), Married Filing Jointly.  The third stimulus payment went off your AGI.  If you were under $150k for MFJ, you got the full amount of $1,400 per person, so a family of 4 got $5,600.  The phase outs for MFJ were between $150,001-$160,000, with a full phase out after $160k.

 

We received a limited stimulus of $1,482 based off our 2019 tax return, where we had an AGI of $157k.   Our 2020 AGI actually went up over $160k, so if they'd gone off our 2020 AGI, we would not have received anything.  Now, our 2021 AGI is going to drop considerably, probably to around $145k.

 

Can I apply retroactively to get a larger portion in 2021?

1 Best answer

Accepted Solutions
Opus 17
Level 15

Qualifying for Third Stimulus Retroactively for losing income in 2021

The $1400 per person EIP is calculated on your 2021 tax return.  If you qualify for more than you received in advance, the extra will be added to your refund.  If you qualify for less, you don't have to repay it.  (It was always a credit on the 2021 return, but with a requirement for the IRS to make advance estimated payments if they could.)

 

Separately, you will also qualify for the $3000 (or $3600) child tax credit, which was temporarily increased from the normal $2000 amount.  If you received advance payments, they will count against the total you are allowed based on your income and family situation.  Your expected AGI is slightly below the trigger point for the phase out, so you should qualify for the full amount.  

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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5 Replies
Critter-3
Level 15

Qualifying for Third Stimulus Retroactively for losing income in 2021

The use of the word "retroactive" is not correct. 

 

The third stimulus payment is RECONCILED on the 2021 return (like the first 2 were on the 2020 return) so if you did not get all of the money  in advance the rest can be gotten on the 2021 return as a refundable credit.  

Opus 17
Level 15

Qualifying for Third Stimulus Retroactively for losing income in 2021

The $1400 per person EIP is calculated on your 2021 tax return.  If you qualify for more than you received in advance, the extra will be added to your refund.  If you qualify for less, you don't have to repay it.  (It was always a credit on the 2021 return, but with a requirement for the IRS to make advance estimated payments if they could.)

 

Separately, you will also qualify for the $3000 (or $3600) child tax credit, which was temporarily increased from the normal $2000 amount.  If you received advance payments, they will count against the total you are allowed based on your income and family situation.  Your expected AGI is slightly below the trigger point for the phase out, so you should qualify for the full amount.  

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

ConfusedByTaxes1983
Level 2

Qualifying for Third Stimulus Retroactively for losing income in 2021

Thanks for the response!

ConfusedByTaxes1983
Level 2

Qualifying for Third Stimulus Retroactively for losing income in 2021

I did the advanced payments, which I understand were based off my 2020 AGI. Due to my 2020 AGI, we did not get the full amount possible ($3,000 for our 8 yo and $3,600 for our 5 yo).  The 50% advanced payments were for a reduced total amount of $5,400, as opposed to $6,600.

 

If my 2021 AGI is as low as we expect it to be, am I correct in understanding that we can now get the full credit of $6,600? 

Critter-3
Level 15

Qualifying for Third Stimulus Retroactively for losing income in 2021

@ConfusedByTaxes1983 

 

Well you are confused because you are mixing up 2 different things ... the third stimulus advance payment and the advance CTC payments.  

 

As already mentioned ... if you did not get the full third stimulus payments due to income limitations and you now qualify using the 2021 income then you will get the rest of the stimulus on the 2021 return.

 

Now for the CTC advance ... like the stimulus payment if you did not get everything you should have in advance then you will get it on the 2021 return.   

 

Just complete the interview process in the program and when asked how much you got of each advance simply enter what you did already receive ... do NOT add them together ... they must be entered separately and in their own sections. 

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