Economic Impact (Stimulus) Payments were available for all eligible taxpayers who had a valid Social Security Number and were not a dependent on another’s return (with the exception for dependent children under 17). The first payments went out in 2020 and the second payments went out in early 2021.
These two economic impact payments were an advance payment of the Recovery Rebate Credit which is part of the 2020 federal 1040, line 30. Therefore any calculated credit will be reconciled with the payments the taxpayer received. This refundable credit is for those individuals who did not receive their full amount of their economic impact payments.
It is important to note that since the vast majority of taxpayers received the full amount of both economic impact payments this credit will be calculated to zero on their 2020 federal return.
If an eligible individual was entitled to Economic Impact (Stimulus) Payments and received payments greater than the recovery rebate credit calculated on the 2020 return, he or she still in most cases gets to keep the original payment. The excess does not need to be repaid to the IRS.