TT2021 says I'm eligible for the 3rd recovery rebate credit as we did not get it in 2021. When I research this, we are over the 2019/2020 income levels. What gives?

[wam319]

When I check the rebate tracking website, it says that either my rebate is still in process or that we are not eligible.  Everything seems to point to eligibility based on income levels for 2019 and/or 2020, which puts us out of the ballpark for this.  We retired in 2021 so our 2021 income level is much lower now.  I'm a long time user of TT, so my previous info is  transferred into each new version of TT that I use.  I feel I'm missing something here...

[Opus 17]

The 3rd rebate (3rd stimulus or EIP round 3) was always meant to be a credit on your 2021 tax return based on your 2021 information.  The IRS was also instructed to make early payments based on 2019 or 2020 tax return data.  If you did not qualify for a stimulus check because your 2019 or 2020 income was too high, but your income is lower now, you may qualify for the credit on your tax return.  This is how it is supposed to work. 

[xmasbaby0]

The 3rd stimulus was sent out to some people in 2021 based on their 2020 income tax returns so that the IRS could send the EIP payments out in a hurry.  But the credit is an advance on a credit you can get on your 2021 tax return.  If you are getting the credit as a recovery rebate credit on your 2021 return, it is based on your 2021 income---not 2020 or 2019.

Here is the criteria--from the IRS:

Who’s eligible for the third Economic Impact Payment? (updated  March 30, 2021)

Generally, if you’re a U.S. citizen or U.S. resident alien, you are eligible for $1,400 ($2,800  for a joint return), plus $1,400 for each qualifying dependent, if you (and your spouse if filing a joint return) aren’t a dependent of another taxpayer on a 2020 tax return, have a valid Social Security number (SSN) (see exception when married filing jointly and exception for qualified dependents) and your adjusted gross income (AGI) does not exceed:

• $150,000 if married and filing a joint return or if filing as a qualifying widow or widower
• $112,500 if filing as head of household or
• $75,000 for eligible individuals using any other filing statuses, such as single filers and married people filing separate returns.

Payments will be phased out – or reduced -- above those AGI amounts. This means taxpayers will not receive a third payment if their AGI exceeds:

• $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 eligible individuals using other filing statuses, such as single filers and married people filing separate returns.

For example, a single person with no dependents and an AGI of $77,500 will normally get a $700 payment (half the full amount). A married couple with two dependents and an AGI of $155,000 will generally get a payment of $2,800 (again, half the full amount). Filers with AGI of at least $80,000 (single and married filing separately), $120,000 (head of household) and $160,000 (married filing joint and surviving spouse) will get no payment based on the law.

You aren’t eligible for a payment if any of the following apply:

• You could be claimed as a dependent on another taxpayer’s 2020 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 (including an extension to October 15 if you request it).

Also, payments will not be made to estates or trusts or for individuals who died before January 1, 2021. 

[wam319]

That's what I was assuming, but couldn't find anything to back that up.  Thanks for putting it in plain speak for me!