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Section 9601 of the American Rescue Plan Act of 2021, enacted March 11, 2021, established Internal Revenue Code (IRC) 6428B, which provides a 2021 Recovery Rebate Credit (RRC) which can be claimed on the 2021 Form 1040, U.S. Individual Income Tax Return, or Form 1040-SR, U.S. Income Tax Return for Seniors. It also provides for an advanced payment of the RRC in calendar year 2021 through payments that are referred to as Economic Impact Payments (EIP3).
This COVID-19 pandemic-related relief was similar to what other tax laws did for certain individual taxpayers in 2020, but with slightly different monetary amounts and eligibility criteria. For details on what rules are in effect for the 2020 tax year, see 2020 Recovery Rebate Credit & Economic Impact Payments.
If you did not receive the full amount of EIP3 before December 31, 2021, claim the 2021 Recovery Rebate Credit (RRC) on your 2021 Form 1040, U.S. Individual Income Tax Return, or Form 1040-SR, U.S. Income Tax Return for Seniors.
The 2021 RRC amount was $1,400 (or $2,800 in the case of a joint return), plus an additional $1,400 per each dependent of the taxpayer, for all U.S. residents with adjusted gross income up to a phase-out threshold of $75,000 ($150,000 in the case of a joint return or a surviving spouse, and $112,500 in the case of a head of household), who are not a dependent of another taxpayer and have a work eligible Social Security number (SSN).
Married taxpayers filing jointly, where one spouse has a work eligible SSN and one spouse does not, are eligible for a payment of $1,400, in addition to $1,400 per each qualifying dependent with a valid SSN or Adoption Taxpayer Identification Number issued by the IRS. The rebate amount is phased out above certain income levels.
Letter 6475
The IRS issued Letter 6475, Economic Impact Payment (EIP) 3 End of Year, in January 2022.
This letter helps EIP recipients determine if they’re eligible to claim the Recovery Rebate Credit on their 2021 tax year returns. It provided the total amount of the third Economic Impact Payment and any plus-up payments received for tax year 2021. Important note: For married individuals filing a joint return, each spouse received their own letter showing half of the total amount.
See the IRS’s Recovery Rebate Credit page for more information about the credit and how to claim it on a 2021 income tax return.
The 2021 Economic Impact Payments (EIP3) were advanced payments of the 2021 RRC. The IRS started issuing the EIP3 to eligible individuals in phases in March of 2021. EIP3 was sent each week to eligible individuals throughout most of the calendar year 2021 by direct deposit or mailed as a check or a debit card as the IRS continued to process tax returns.
EIP3 payments are separate from EIP1 and EIP2 payments, which are advance payments of the tax year 2020 RRC. For more information on the 2020 RRC or 2020 EIPs, see the 2020 Recovery Rebate Credit & Economic Impact Payments section.
No action was needed by most qualified taxpayers to receive the EIP3. Most of the 2021 EIP3s were automatic and made through direct deposit, although some taxpayers received a check or debit card in the mail. The form of payment for EIP3s may differ from the first and second rounds of EIP.
Generally, only people who qualify for the RRC, but don’t normally file a tax return and don’t receive federal benefits will not receive advanced payments and will need to file a 2021 tax return and claim the full amount of RRC at that time.
Taxpayers could check the Get My Payment tool on IRS.gov to see the payment status of the EIP3. Get My Payment was the only option available to get your payment status, however it is no longer available, review your online account for EIP payment amounts issued.
More detailed information about EIP3s can be found on the following IRS.gov pages: