The Recovery Rebate Credit is a one-time benefit for people who didn't receive the full Economic Stimulus Payment last year and whose circumstances have changed, making them eligible now for some or the entire unpaid portion. Generally, a credit increases the amount of a refund, or reduces the amount of taxes owed.

Who is eligible?

People who fall into the categories described below may be eligible for the Recovery Rebate Credit:

• Individuals who did not receive an Economic Stimulus Payment.
• Those who received less than the maximum Economic Stimulus Payment in 2008 – $600 per taxpayer; $1,200 if married filing joint – because their qualifying or gross income was either too high or too low. 
• Families who gained an additional qualifying child in 2008.
• Individuals who could be claimed as a dependent on someone else's tax return in 2007, but who cannot be claimed as a dependent on someone else's tax return in 2008.
• Individuals who did not have a valid Social Security number in 2007 but who did receive one in 2008. 
  

How do I claim the credit?

You may claim the Recovery Rebate Credit on Form 1040, Form 1040A or Form 1040EZ. The instructions for these forms will show you which lines to use. Unlike the Economic Stimulus Payment, the Recovery Rebate Credit will be included in your tax refund for the 2008 tax year and will not be issued as a separate payment.

In most cases, the IRS will be able to calculate whether a person is eligible and how much of the credit may be due. Taxpayers can choose this option by simply filing a 2008 Form 1040, Form 1040A or Form 1040EZ and following the "Credit Figured by the IRS" instructions. If you are filing electronically, the software will calculate the credit for you.

How do I calculate the credit?

The Recovery Rebate Credit is calculated the same way and with the same requirements as the 2008 Economic Stimulus Payment. The only difference is that the Recovery Rebate Credit is based on the tax year 2008 income tax return, while the Economic Stimulus Payment was based on the tax year 2007 income tax return.

You can use two online tools in the Recovery Rebate Credit Information Center on www.irs.gov to help you calculate the credit:

• The Recovery Rebate Credit Calculator will help taxpayers determine if they are eligible for the credit and, if so, figure the amount that should be claimed. To use this calculator, the user must know the exact amount of the Economic Stimulus Payment received in 2008.
• How Much Was My 2008 Stimulus Payment? This tool (available now) is designed to provide the amount of last year’s Economic Stimulus Payment.

You may choose to calculate the Recovery Rebate Credit by using the worksheet included in the instruction booklet for Form 1040, Form 1040A or Form 1040EZ. To calculate the credit, you will need the amount of the Economic Stimulus Payment you received in 2008, if any. This amount was provided on Notice 1378, Economic Stimulus Payment Notice, sent by the IRS to taxpayers who received a payment.

Where can I find more information about the Recovery Rebate Credit?

• Visit the Recovery Rebate Credit Information Center on the IRS website at www.irs.gov
• Instructions for Form 1040, Form 1040A or Form 1040EZ
• Publication 17, Your Federal Income Tax
• Call the IRS’s customer service toll-free number at 1-800-829-1040
• IRS Taxpayer Assistance Center. You may visit www.irs.gov to locate the closest IRS Taxpayer Assistance Center.