Stimulus and Taxes: What You Need To Know About Your 3rd Payment

If you think back all the way to 2020 (yes, that was just last year), you may remember that your first and second stimulus payments were included on your tax return.

These 2 payments were not taxable (whew!), but the IRS required that the amounts received needed to be reported on your 2020 tax return. That same process applies to the third payment that you likely received at the beginning of 2021.

The first question you might be asking yourself is:

“Why do these payments get reported on your tax return if they’re not taxable?”

The stimulus payments were introduced as an advanced tax credit. Tax credits reduce your overall tax burden for the year, which you would normally claim when you file your annual federal income tax return. The IRS issued the Recovery Rebate Credit (stimulus payment) in advance of our normal tax return filing. So, instead of filing a tax return to claim this credit, the IRS determined eligibility based on your previously filed tax return and issued the credit directly to you in advance.

If you received a stimulus payment in 2021, which was $1,400 per individual and dependent, make sure to report it on your 2021 tax return. The consequence of not reporting the correct amount on your tax return could result in your tax owed (or tax refund) being miscalculated, which in turn will trigger the IRS to make an adjustment to your tax owed/tax refund.

How can I find my stimulus payment history?

You should have received “IRS Notice 1444-C” in the mail shortly after receiving your third stimulus payment with details of amounts received. If you didn’t or if you’ve forgotten the amount you received for your third stimulus payment, you can find it by logging into your IRS account here.

Once logged in, click on the “Tax Records” tab at the top. This page will list all 3 payment amounts you should have received. Look for “2021 Economic Impact Payments Information” towards the bottom of the page. We recommend printing a copy of this page and keep along with your 2021 tax documents.

Economic Impact Payments Eligibility

If you have not received your third stimulus check and are eligible, you can claim the Recovery Rebate Credit when you file your 2021 tax return. Check out the third stimulus payment eligibility below.

Generally, someone is eligible for the full amount of the third Economic Impact Payment if they:

are a U.S. citizen or U.S. resident alien (and their spouse if filing a joint return), and
are not a dependent of another taxpayer, and
their adjusted gross income (AGI) is not more than:
- $150,000 if married and filing a joint return or if filing as a qualifying widow or widower
- $112,500 if filing as head of household or
- $75,000 for eligible individuals using any other filing status

Payments will be phased out – or reduced – above those AGI amounts. This means people will not receive a payment if their AGI is at least:

$160,000 if married and filing a joint return or if filing as a qualifying widow or widower
$120,000 if filing as head of household
$80,000 for eligible individuals using any other filing status

About Dark Horse CPAs

Dark Horse CPAs provides integrated tax, accounting, and CFO services to small businesses and individuals across the U.S. The firm was founded to save small businesses (and their owners) from subpar accounting and tax services and subpar client experiences. These small businesses are Dark Horses among their larger and more well-known competition. Being a Dark Horse CPA means advocating for small businesses by bringing them the tax strategies and accounting insights previously reserved for big business. To learn more, visit our website.