Question

Connor and Jen each filed as single on their 2019 tax returns. They got married in January 2020 and had a child named Nathan in November 2020. Connor’s 2019 adjusted gross income was $100,000 and Jen’s was $25,000. Neither had qualifying children in 2019. Connor’s income in 2019 kept him from receiving any of the economic impact payments. Samantha received the full amount for both the $1,200 and $600 stimulus payments for a total of $1,800 total. Connor and Jen file their 2020 tax return as married filing jointly claiming Nathan as their child and have a combined adjusted gross income (AGI) of $125,000. Assuming that all three meet all of the requirements, they were able to claim a Recovery Rebate Credit Part 1 and 2 for what amount?

Answer 1

Connor, Jen, and their child are eligible to claim a Recovery Rebate Credit totaling $3,500, which includes $2,400 for Connor and Jen and $1,100 for their child.

Step-by-step explanation:

The question involves calculating the Recovery Rebate Credit for Connor, Jen, and their child based on the changes in their income and marital status from 2019 to 2020. In 2020, Connor and Jen together have an adjusted gross income (AGI) of $125,000 and qualify to file jointly. Since they now have a child, they are entitled to additional credit. The first round of stimulus payments provided $1,200 per adult and $500 per qualifying child, while the second round provided $600 per adult and $600 per qualifying child. Given their AGI, they were likely eligible for the full amount, as the phaseout for the stimulus payments began at $150,000 for married couples filing jointly. Therefore, they can claim a Recovery Rebate Credit of $2,400 for themselves ($1,200 x 2 for the first payment, and $600 x 2 for the second payment) plus $1,100 for their child ($500 for the first payment and $600 for the second payment), totaling $3,500.