Contents
Introduction
The Recovery Rebate Credit is a landmark program aimed at providing financial assistance right where many Americans likely need it most—their bank account. This payout benefited citizens in one of two ways: it either reduced the amount of money you owed the IRS after filing your annual taxes, or it was given back to you in the form of a rebate check, often in the form of a direct deposit right into your checking account.
One of the best aspects of this program is that there really isn’t anything you need to do in order to take part. Unlike many of the systems we have outlined above, there are no applications to fill out or evidence of financial need to provide. No qualifying income is needed in order to be eligible for this benefit. Even citizens who have earned zero dollars for the year are eligible for this payment as long as they are not listed as a dependent on another individual’s filing, and so long as they have a work-eligible social security number.
A Historical Look at Stimulus Programs
The current American rebate system is born from programs that date to the early 2000s. In 2001 the government launched the Economic Growth and Tax Relief Reconciliation Act, followed by the Economic Stimulus Act of 2008. The programs saw rebate checks sent to Americans following their tax filing, which is very similar to how the system works now.
In the wake of the Covid crisis, the government launched a new wave of stimulus programs, aimed at helping the people stay afloat during the pandemic which saw many struggling financially. The first Coronavirus stimulus was part of the CARES Act in 2020, with second and third iterations following in 2021. The Rebate Credit that we know today is a branch of these most recent rollouts.
In total, the stimulus program saw great benefits come to so many. More than 476 million payments were made out, making up $814 billion in financial aid, going to help people and families affected by the Covid pandemic between 2020 and 2021, according to the Pandemic Oversight Committee. [1]
If you did not receive your rebate in 2020 and/or in 2021, you can still receive access to it. First you must be certain that you did not already receive the stimulus, or that you didn’t receive it in full. If this is the case, you can have it added to your next tax filing. [2]
Some reasons individuals might not have received their rebate in full could be divorce, forgetting to mention a dependent, no longer qualifying as a dependent themselves, and more. [3]
How Much Can I Expect to Receive?
The amount of rebate you will receive is going to depend on how many individuals live in your home. A single adult living alone can expect a payment of $1,400 while a family of four, two adults and two children, can expect a payout of $5,600. However, this does not apply to all citizens. For example, if you are a couple earning more than $150,000 a year, or if you are an individual earning more than $112,500 a year, your amount will likely be reduced. This also applies if you live in a household with others but are the only income earner, bringing in more than $112,500 a year.
Who Is Not Eligible?
Unfortunately, not everyone is able to benefit from this program. However, the good news is that by and large the vast majority of Americans will be able to take part. But if you are a couple filing jointly and earning more than $160,000 a year combined, you will not receive the rebate credit. Similarly, if you are a single person or single earner in your household and making more than $120,000, you will likely not be receiving this payment.
This does not apply to the largest part of working Americans, however. By and large, this is a system that was designed to be utilized by the majority of citizens, from low or no income to upper middle income.
What About People on Social Security?
We’ve talked about employed individuals, but what if you are not working due to retirement? If you are currently collecting social security benefits, the rebate program is something you can still take advantage of. You should receive the payment after filing your IRS tax forms for the year, the same as any other citizen who is earning a paycheck. The good news here is that your current employment status will not affect your benefits.
Recovery Funds
Another stimulus initiative that is important to note is the State and Local Fiscal Recovery Funds program (SLFRF). This plan was put forth by the American Rescue Plan Act, and seeks to send $350 billion to local, state, territories, and Tribal governments in the US. These funds are meant to help boost these areas up following the strain on resources brought about by the Coronavirus pandemic. [4]
More than 30,000 governing bodies have already received these monies from SLFRF and invested them back into their communities, fighting problems like struggling small businesses and overstretched public services, and creating proactive approaches like supporting long term opportunities and growth.
Sources
- [1] Update: Three rounds of stimulus checks. See how many went out and for how much. | Pandemic Oversight
- [2] Recovery Rebate Credit | Internal Revenue Service (irs.gov)
- [3] Economic Impact Payments | Internal Revenue Service (irs.gov)
- [4] State and Local Fiscal Recovery Funds | U.S. Department of the Treasury
Contents
Introduction
The Recovery Rebate Credit is a landmark program aimed at providing financial assistance right where many Americans likely need it most—their bank account. This payout benefited citizens in one of two ways: it either reduced the amount of money you owed the IRS after filing your annual taxes, or it was given back to you in the form of a rebate check, often in the form of a direct deposit right into your checking account.
One of the best aspects of this program is that there really isn’t anything you need to do in order to take part. Unlike many of the systems we have outlined above, there are no applications to fill out or evidence of financial need to provide. No qualifying income is needed in order to be eligible for this benefit. Even citizens who have earned zero dollars for the year are eligible for this payment as long as they are not listed as a dependent on another individual’s filing, and so long as they have a work-eligible social security number.
A Historical Look at Stimulus Programs
The current American rebate system is born from programs that date to the early 2000s. In 2001 the government launched the Economic Growth and Tax Relief Reconciliation Act, followed by the Economic Stimulus Act of 2008. The programs saw rebate checks sent to Americans following their tax filing, which is very similar to how the system works now.
In the wake of the Covid crisis, the government launched a new wave of stimulus programs, aimed at helping the people stay afloat during the pandemic which saw many struggling financially. The first Coronavirus stimulus was part of the CARES Act in 2020, with second and third iterations following in 2021. The Rebate Credit that we know today is a branch of these most recent rollouts.
In total, the stimulus program saw great benefits come to so many. More than 476 million payments were made out, making up $814 billion in financial aid, going to help people and families affected by the Covid pandemic between 2020 and 2021, according to the Pandemic Oversight Committee. [1]
If you did not receive your rebate in 2020 and/or in 2021, you can still receive access to it. First you must be certain that you did not already receive the stimulus, or that you didn’t receive it in full. If this is the case, you can have it added to your next tax filing. [2]
Some reasons individuals might not have received their rebate in full could be divorce, forgetting to mention a dependent, no longer qualifying as a dependent themselves, and more. [3]
How Much Can I Expect to Receive?
The amount of rebate you will receive is going to depend on how many individuals live in your home. A single adult living alone can expect a payment of $1,400 while a family of four, two adults and two children, can expect a payout of $5,600. However, this does not apply to all citizens. For example, if you are a couple earning more than $150,000 a year, or if you are an individual earning more than $112,500 a year, your amount will likely be reduced. This also applies if you live in a household with others but are the only income earner, bringing in more than $112,500 a year.
Who Is Not Eligible?
Unfortunately, not everyone is able to benefit from this program. However, the good news is that by and large the vast majority of Americans will be able to take part. But if you are a couple filing jointly and earning more than $160,000 a year combined, you will not receive the rebate credit. Similarly, if you are a single person or single earner in your household and making more than $120,000, you will likely not be receiving this payment.
This does not apply to the largest part of working Americans, however. By and large, this is a system that was designed to be utilized by the majority of citizens, from low or no income to upper middle income.
What About People on Social Security?
We’ve talked about employed individuals, but what if you are not working due to retirement? If you are currently collecting social security benefits, the rebate program is something you can still take advantage of. You should receive the payment after filing your IRS tax forms for the year, the same as any other citizen who is earning a paycheck. The good news here is that your current employment status will not affect your benefits.
Recovery Funds
Another stimulus initiative that is important to note is the State and Local Fiscal Recovery Funds program (SLFRF). This plan was put forth by the American Rescue Plan Act, and seeks to send $350 billion to local, state, territories, and Tribal governments in the US. These funds are meant to help boost these areas up following the strain on resources brought about by the Coronavirus pandemic. [4]
More than 30,000 governing bodies have already received these monies from SLFRF and invested them back into their communities, fighting problems like struggling small businesses and overstretched public services, and creating proactive approaches like supporting long term opportunities and growth.
Sources
- [1] Update: Three rounds of stimulus checks. See how many went out and for how much. | Pandemic Oversight
- [2] Recovery Rebate Credit | Internal Revenue Service (irs.gov)
- [3] Economic Impact Payments | Internal Revenue Service (irs.gov)
- [4] State and Local Fiscal Recovery Funds | U.S. Department of the Treasury
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