• Economic impact payments are an advance payment of the recovery rebate credit received on the taxpayer’s income tax return.
  • The newest round of economic impact payments will be $1,400 for individuals ($2,800 for married filing joint) with an additional $1,400 for each dependent, regardless of age.
    • This includes dependents who are college students and qualifying relatives who are claimed as dependents.
  • The credit and related advance payment begin to reduce for individuals with AGI over $75,000 ($150,000 for married filing joint and $112,500 for Head of Household) and will be completely phased out once the individual’s AGI reaches $80,000 ($160,000 for married filing joint and $120,000 for Head of Household). The taxpayer’s 2019 tax return will be used to determine eligibility unless a 2020 return has already been filed.
  • The credit and related advance payment will be reconciled on the taxpayer’s 2021 return. If the credit is determined to be larger than the advance payment received on the 2021 tax return, the taxpayer will receive the additional amount as a credit on the return. If the advance payments exceed the eligible credit based on the 2021 tax return, the excess will not need to be repaid or be taxable.