How to Claim 2021 Recovery Rebate Credit on US Tax Return

April 22, 2021 | | 3 minute read
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To save as much money as possible on your US expat taxes, you’ll want to know how to claim the 2021 Recovery Rebate Credit on your US tax return.

However, by claiming all the deductions and credits you’re eligible for, you can not only be rest assured that you’re staying in good standing with the IRS, but you might even get a refund. One key benefit you could qualify for is the Recovery Rebate Credit. Don’t miss this chance to save on your US taxes!

What is the Recovery Rebate Credit?

The Recovery Rebate Credit, in essence, is a tax credit that you’re able to use against your US income taxes as an American living abroad. This credit was paid in stimulus checks (officially known as Economic Impact Payments) in 2020 and early 2021. In short, the Recovery Rebate Credit can either lower the amount of taxes that you owe or increase the total of your refund.

Who is Eligible for the Recovery Rebate Credit?

To learn whether you’re eligible for the Recovery Rebate Credit, you’ll need to look at how much you received on your stimulus checks.

  • For the first round of checks, the full payment was $1,200 for individuals or $2,400 for married couples filing jointly. For each qualifying child, it was $500.
  • For the second round of stimulus checks, the full payment was $600 for individuals, $1,200 for couples filing jointly, and $600 for each qualifying child.

If you did not receive the total amount of both of these payments, you could be eligible to claim the Recovery Rebate Credit. In addition to these criteria:

  • You must also have been a US citizen (or US resident alien) in 2020
  • Have a valid Social Security number (that qualifies you for employment) issued before your 2020 tax return due date
  • You cannot have been claimed as a dependent on someone else’s tax return for the 2020 tax year
  • Your adjusted gross income did not exceed the IRS set thresholds (starting at $75,000 for single filers)

It’s critical to note that, even if you didn’t file a tax return this year or aren’t usually required to file a tax return as a US citizen abroad, you DO have to file a 2020 tax return to claim the Recovery Rebate Credit. The IRS used to provide a Non-Filer tool on their website, but this tool no longer exists. Instead, you must file a tax return to claim the Recovery Rebate Credit.

How to Claim Your 2021 Recovery Rebate Credit

The Recovery Rebate Credit worksheet can be found in both Form 1040 and Form 1040-SR on your tax return, and in the MyExpatTaxes software. Either of these forms will notify the IRS that you are indeed eligible to receive this credit. Again, if you received the full amount of both stimulus checks, you will not qualify for the Recovery Rebate Credit.

When you file, you’ll need to note how much you did receive in either of the first two stimulus checks. Whatever amount you did receive as an American abroad from these Economic Impact Payments will be deducted from the amount you receive within the Recovery Rebate Credit. You can see how much you received from your stimulus checks by reviewing your bank statements or logging into your account on the IRS’s website

Filing your taxes electronically, through convenient software like MyExpatTaxes, is the easiest and most accurate way to handle your American expat taxes. You’ll also have the added benefit of receiving your Recovery Rebate Credit even faster through direct deposit instead of having a check mailed to you! 

2021 Stimulus Checks

The Recovery Rebate Credit considers the amount you did (or did not) receive through the first two stimulus checks. And thanks to the American Rescue Plan, the third round of stimulus checks is on its way to Americans both in the United States and abroad.

These stimulus payments for American expats will automatically be issued to those who have already gotten their first two checks and/or have eFiled their 2020 tax return. If you don’t receive the entire amount of your third economic payment relief ($1,400 for individuals earning less than $75,000 or $2,800 for married couples earning less than $150,000), make a note of the discrepancy; it might come in handy on next year’s tax return! 

Claim Your Credit with MyExpatTaxes

Filing your US expat taxes, in general, can be a hassle. Still, when it comes to an incredible opportunity like the Recovery Rebate Credit, you don’t want to risk leaving any money on the table.

Luckily, the MyExpatTaxes expat tax software makes it easy to claim your Recovery Rebate Credit and file your expat taxes in just minutes! Our software is for Americans abroad, and it’s user-friendly and intuitive. It allows you to quickly handle your US expat taxes and claim every deduction or credit you might be eligible for. Plus, we offer expat tax return accuracy guaranteed.

Contact us today to learn more and receive additional expat tax advice! 

Written by Michelle H.

April 22, 2021 | | 3 minute read

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