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Allowable Recovery Credit

Level 3

When someone gets a stimulus payment lowered due to income, can the difference be allowed as a credit on 2020 return?  

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4 Comments 4
Level 15

Maybe if their 2020 income is lower than 2019

Slava Ukraini!
Level 15

This is never going to end, is it?

"Tax software is no substitute for a professional tax preparer"
Level 15

Nope.  There will be people 3 years from now filing delinquent 2020 returns asking the same question.

Slava Ukraini!
Level 15

"When someone gets a stimulus payment lowered due to income"

Gets it Lowered?

"can the difference be allowed as a credit on 2020 return?"

Not if they already got what they are qualified to get, or got More than they are qualified to get.

Perhaps it would help to review what is really happening:

The funds were paid out as Advanced payment against a projection. The projection used 2018 or 2019 tax returns. But 2020 is the Actuals. You use the 2020 return to reconcile what a person is entitled to, against what they got.

If the person is not a dependent in 2020, then they would be entitled to the payment/credit as individual filers. That doesn't mean "not being claimed." It means "no longer qualifies as a dependent."

You might want to bookmark these links and read the IRS guidance.

Interactive wizards portal for determining dependency:





One for each EIP.

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