EIP1 & EIP2 Payment Reconciliation

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tomd37
Posts: 3575
Joined: Thu Mar 01, 2007 10:39 pm
Location: Middle Tennessee

EIP1 & EIP2 Payment Reconciliation

Post by tomd37 »

Had a question posed to me by a neighbor this morning to which I could not answer definitively. Neighbor is filing 2020 federal tax return using MFJ filing status. Her husband passed away in October 2020. They had received EIP1 in amount of $1200 per person. She received EIP2 in amount of $600 and nothing for him. When her 2020 tax return was prepared in AARP Foundation Tax-Aide program the Recovery Rebate Credit Worksheet was prepared and it gave a recovery rebate credit (RRC) of $600 for him and changed the tax amount due of $20 to a refund of $580. The return was properly annotated with his date of death in October 2020. Tax-Aide just transmitted the return so it will be up to about three weeks before the refund is posted to her bank account.

Her question is whether she/they are entitled to the RRC or might the government change the return or later request a return of the $600 if it is paid. I don't know what the IRS position is relative to allowing the payment for a deceased taxpayer or recouping the payment if was made in the form of the RRC.


Edited to add: EIP3 was $1400 for her alone and that is correct IMO.
Tom D.
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HueyLD
Posts: 8206
Joined: Mon Jan 14, 2008 10:30 am

Re: EIP1 & EIP2 Payment Reconciliation

Post by HueyLD »

She will be fine.

Here is what the IRS instruction says for Form 1040, line 30:

“ Line 30

Recovery Rebate Credit

The recovery rebate credit was paid out to eligible individuals in two rounds of advance payments called economic impact payments. The economic impact payments were based on your 2018 or 2019 tax year information. The recovery rebate credit is figured like the economic impact payments except that the credit eligibility and the credit amount are based on your 2020 tax year information. If you didn’t receive the full amount of the recovery rebate credit as economic impact payments, you may be able to claim the recovery rebate credit on your 2020 Form 1040 or 1040-SR.

Generally, you are eligible to claim the recovery rebate credit if in 2020 you were a U.S. citizen or U.S. resident alien, weren't a dependent of another taxpayer, and have a valid social security number. This includes someone who died in 2020, if you are preparing a return for that person. Use the Recovery Rebate Credit Worksheet to figure the credit, if any, you can claim. For more information on the recovery rebate credit, go to IRS.gov/RRC.”
Topic Author
tomd37
Posts: 3575
Joined: Thu Mar 01, 2007 10:39 pm
Location: Middle Tennessee

Re: EIP1 & EIP2 Payment Reconciliation

Post by tomd37 »

Thank you HueyLD. There is nothing like getting the wording straight from the proper source. 8-)
Tom D.
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