However, the phaseout ceiling is lower, $80,000 for single and $160,000 for married filing jointly. The 2021 EIP/recovery rebate credit has the same income phaseout thresholds as for 2020, $75,000 for single filers and $150,000 for married couples filing jointly. The definition of qualifying dependents for the 2021 EIP/recovery rebate credit includes all properly claimed dependents, such as college students, parents, and other qualifying relatives, not just, as in 2020, those who were children under age 17. Both taxpayers and dependents must have a valid SSN (other than in the case of the armed-forces exception) or, for dependents, an adoption taxpayer identification number. armed forces at any time during the year), and $1,400 for each qualifying dependent claimed on the individual's return. In most cases, the 2021 EIP or recovery rebate credit amount is $1,400 for each eligible individual, or double that amount for married couples filing jointly where both spouses are eligible (a married couple filing jointly can both qualify if one spouse had a valid Social Security number (SSN) and one spouse was an active member of the U.S. Individuals eligible for the EIP or recovery rebate credit who did not receive an EIP may claim the full amount of the credit on their return. The previous two EIP rounds occurred in 2020 and are reconciled against a recovery rebate credit for that year's tax return. The 2021 EIP was the third such payment, which the IRS distributed in March through the end of the year. The recovery rebate credit for the 2021 tax year, as for 2020, must be netted against any economic impact payment (EIP) a taxpayer (and/or spouse, if filing jointly) received during the year. The IRS on Thursday issued a fact sheet (FS-2022-04) of frequently asked questions (FAQs) intended to help taxpayers and their return preparers calculate the recovery rebate credit for 2021 tax returns.
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