Recovery Rebate Divorced individual

[JD028]

A person divorces in 2020. Based on their 2019 MFJ return they were not entitled to EIP2. In 2020, filing single, she is. Do I claim the Recovery Rebate ($600)?

A further pressing the limit...married they received $1200 for EIP1 which was split evenly. In effect she received only $600 when she would have been entitled to $1200 based on 2020 income. How aggressive would it be to claim $600 for Rebate Recovery for EIP1?

[Just-Lisa-Now-]

Did their 2018 or 2019 income land in the phaseout? Seems odd that they got exactly half of the full amount.

[qbteachmt]

"A person divorces in 2020."

The 2020 filing is all that matters.

"Based on their 2019 MFJ return they were not entitled to EIP2."

That was only a projection.

"In 2020, filing single, she is. Do I claim the Recovery Rebate ($600)?"

Take what they got and divided it by 2. File for what she is entitled to, and enter her share of what they got, to see if there is a difference.

"A further pressing the limit...married they received $1200 for EIP1 which was split evenly."

Then she gets the value of $600 as already received.

"In effect she received only $600 when she would have been entitled to $1200 based on 2020 income."

Which is all that matters, along with her income limit.

"How aggressive would it be to claim $600 for Rebate Recovery for EIP1?"

It's not aggressive; the 2020 tax return is the reconciliation for both EIP 1 and EIP 2. Just enter what applies.

She is either entitled or not, for each.

She either got money (or the allocated share, once split) or did not.

There either is a difference, for each amount, or there is not.

That's all you are doing. There is no aggressive stance to take. Work through the numbers.

[qbteachmt]

Oh, sorry; I overlooked this part: "Based on their 2019 MFJ return they were not entitled to EIP2."

Both EIP 1 and EIP 2 are based on the 2020 tax return. There is no qualifying for one and not the other.

[JD028]

Lisa,

My apologies. I just checked with the client. The full amount was received for both EIP1 & EIP2 so my question is now moot.

I will say, however, I was unable to find any online guidance on what to do if married a couple was phased out based on 2019 income and one individual did qualify in 2020.

Thank you for responding.

JD

[JD028]

thank you

[JD028]

thank you

[qbteachmt]

"on what to do if married a couple was phased out based on 2019 income"

That is moot. That was used to Project payouts, and then issue the projection as an actual payout.

"and one individual did qualify in 2020." <== this is all that matters

The EIP 1, 2 and 3 were paid out based on Projections. For projection purposes, the earlier tax filings were used. That's why 2019 filings are Moot. You would split the actual amounts received to allocate it to each person. Each person has their own actual 2020 filing, which is the reconciliation of the amount entitled to (2020 actuals) against 2020 "prepayment" allocated to your divorced person.

Stop worrying about 2019 now. It has absolutely no bearing on anything now.