Recovery Rebate Credit 2021 - YouTube

In Drake Tax, the RRC screen is used to report  Economic Impact Payments (EIP) received by the  

taxpayer in order to calculate the Recovery  Rebate Credit on the 2021 tax return. 

The American Rescue Plan Act of 2021, signed into  law on March 11, 2021, authorized a third Economic  

Impact Payment to many Americans. Generally,  the EIP3 was $1,400 for each taxpayer, spouse,  

and eligible, claimed dependent, including most  college students and disabled adult dependents,  

subject to income limitations. The IRS started processing the  

third EIP (EIP3) payments on Friday,  March 12, 2021 to eligible taxpayers. 

In mid-2021, the IRS mailed Notice 1444-C to  people who received a third Economic Impact  

Payment. This letter is issued to each taxpayer  on the return. The IRS is also issuing letter 6475  

in late January 2022. The letters should  be kept with tax year 2021 records. 

A link to the “IRS Get My Payment Tool” is  also available in Drake Tax, and can confirm  

if and how payment was sent to a taxpayer. You  can instruct the taxpayer on how to use the tool.  

Each taxpayer on the tax return should check Get  My Payment separately using his or her own Social  

Security number to see the status of the payments. To access the RRC screen,  

type RRC into the selector field and press ENTER  , or click the link from the first Credits tab. 

Review the information provided  at the top of the screen. 

Answer the “U.S. Armed Forces” question. Include the amounts the taxpayer (and spouse,  

if applicable) received for  EIP3 in the available fields.  

Either enter the entire amount received  for the family in the joint field,  

or separate by taxpayer and spouse.  Do not enter in both sections. 

Enter the full amount before any offsets, and do  not include any amount received that was later  

returned to the IRS. For joint returns, be sure  to enter the amounts received for both taxpayers.  

If an eligible taxpayer did not receive a payment,  enter “0” (zero) in the fields. Entering an amount  

different than what was actually received  may cause a delay in return processing. 

Checkboxes are available at the bottom  of the screen to either suppress the RRC  

calculation on the return, or to exclude the  taxpayer or spouse from the RRC calculation,  

due to having a social security number  that is not valid for employment.  

Only people who have a social security  number that is valid for employment  

qualify to claim the Recovery Rebate Credit. To exclude a dependent for this reason, check  

the “Do Not Include in RRC calc” checkbox at  the bottom of screen 2, the dependents screen. 

Drake Tax calculates the RRC and produces  the results on the RRC Worksheet. 

Eligible taxpayers who did not receive payments  

will be eligible for the refundable credit, as  reflected at the bottom of the RRC Worksheet. 

This amount flows to line 30  of Forms 1040 and 1040-SR. 

For more information, search for “RRC”  in the Drake Software Knowledge Base,  

which can be accessed from the Help button  of the Drake Tax Home window toolbar.