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.
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
- The second round of stimulus checks offers full payment of $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. 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.