26 U.S. Code § 6428A - Additional 2020 recovery rebates for individuals

(a) In generalIn addition to the credit allowed under section 6428, in the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A for the first taxable year beginning in 2020 an amount equal to the sum of—
(1)
$600 ($1,200 in the case of eligible individuals filing a joint return), plus
(2)
an amount equal to the product of $600 multiplied by the number of qualifying children (within the meaning of section 24(c)) of the taxpayer.
(b) Treatment of credit

The credit allowed by subsection (a) shall be treated as allowed by subpart C of part IV of subchapter A of chapter 1.

(c) Limitation based on adjusted gross incomeThe amount of the credit allowed by subsection (a) (determined without regard to this subsection and subsection (e)) shall be reduced (but not below zero) by 5 percent of so much of the taxpayer’s adjusted gross income as exceeds—
(1)
$150,000 in the case of a joint return or a surviving spouse (as defined in section 2(a)),
(2)
$112,500 in the case of a head of household (as defined in section 2(b)), and
(3)
$75,000 in the case of a taxpayer not described in paragraph (1) or (2).
(d) Eligible individualFor purposes of this section, the term “eligible individual” means any individual other than—
(1)
any nonresident alien individual,
(2)
any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual’s taxable year begins, and
(3)
an estate or trust.
(e) Coordination with advance refunds of credit
(1) In general

The amount of the credit which would (but for this paragraph) be allowable under this section shall be reduced (but not below zero) by the aggregate refunds and credits made or allowed to the taxpayer under subsection (f). Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1).

(2) Joint returns

Except as otherwise provided by the Secretary, in the case of a refund or credit made or allowed under subsection (f) with respect to a joint return, half of such refund or credit shall be treated as having been made or allowed to each individual filing such return.

(f) Advance refunds and credits
(1) In general

Each individual who was an eligible individual for such individual’s first taxable year beginning in 2019 shall be treated as having made a payment against the tax imposed by chapter 1 for such taxable year in an amount equal to the advance refund amount for such taxable year.

(2) Advance refund amountFor purposes of paragraph (1), the advance refund amount is the amount that would have been allowed as a credit under this section for such taxable year if this section (other than subsection (e) and this subsection) had applied to such taxable year. For purposes of determining the advance refund amount with respect to such taxable year—
(A)
any individual who was deceased before January 1, 2020, shall be treated for purposes of applying subsection (g) in the same manner as if the valid identification number of such person was not included on the return of tax for such taxable year, and
(B) no amount shall be determined under this subsection with respect to any qualifying child of the taxpayer if—
(i)
the taxpayer was deceased before January 1, 2020, or
(ii)
in the case of a joint return, both taxpayers were deceased before January 1, 2020.
(3) Timing and manner of payments
(A) Timing
(i) In general

The Secretary shall, subject to the provisions of this title, refund or credit any overpayment attributable to this subsection as rapidly as possible.

(ii) Deadline
(I) In general

Except as provided in subclause (II), no refund or credit shall be made or allowed under this subsection after January 15, 2021.

(II) Exception for mirror code possessionsIn the case of a possession of the United States which has a mirror code tax system (as such terms are defined in section 272(c) of the COVID-related Tax Relief Act of 2020), no refund or credit shall be made or allowed under this subsection after the earlier of—
(aa)
such date as is determined appropriate by the Secretary, or
(bb)
September 30, 2021.
(B) Delivery of paymentsNotwithstanding any other provision of law, the Secretary may certify and disburse refunds payable under this subsection electronically to—
(i)
any account to which the payee authorized, on or after January 1, 2019, the delivery of a refund of taxes under this title or of a Federal payment (as defined in section 3332 of title 31, United States Code),
(ii)
any account belonging to a payee from which that individual, on or after January 1, 2019, made a payment of taxes under this title, or
(iii)
any Treasury-sponsored account (as defined in section 208.2 of title 31, Code of Federal Regulations).
(C) Waiver of certain rules

Notwithstanding section 3325 of title 31, United States Code, or any other provision of law, with respect to any payment of a refund under this subsection, a disbursing official in the executive branch of the United States Government may modify payment information received from an officer or employee described in section 3325(a)(1)(B) of such title for the purpose of facilitating the accurate and efficient delivery of such payment. Except in cases of fraud or reckless neglect, no liability under sections 3325, 3527, 3528, or 3529 of title 31, United States Code, shall be imposed with respect to payments made under this subparagraph.

(4) No interest

No interest shall be allowed on any overpayment attributable to this subsection.

(5) Application to certain individuals who do not file a return of tax for 2019
(A) In generalIn the case of a specified individual who, at the time of any determination made pursuant to paragraph (3), has not filed a tax return for the year described in paragraph (1), the Secretary may use information with respect to such individual which is provided by—
(i)
in the case of a specified social security beneficiary or a specified supplemental security income recipient, the Commissioner of Social Security,
(ii)
in the case of a specified railroad retirement beneficiary, the Railroad Retirement Board, and
(iii)
in the case of a specified veterans beneficiary, the Secretary of Veterans Affairs (in coordination with, and with the assistance of, the Commissioner of Social Security if appropriate).
(B) Specified individualFor purposes of this paragraph, the term “specified individual” means any individual who is—
(ii)
a specified supplemental security income recipient,
(C) Specified social security beneficiary
(i) In general

For purposes of this paragraph, the term “specified social security beneficiary” means any individual who, for the last month for which the Secretary has available information as of the date of enactment of this section, is entitled to any monthly insurance benefit payable under title II of the Social Security Act (42 U.S.C. 401 et seq.), including payments made pursuant to sections 202(d), 223(g), and 223(i)(7) of such Act.

(ii) Exception

For purposes of this paragraph, the term “specified social security beneficiary” shall not include any individual if such benefit is not payable for such month by reason of section 202(x)(1)(A) of the Social Security Act (42 U.S.C. 402(x)(1)(A)) or section 1129A of such Act (42 U.S.C. 1320a–8a).

(D) Specified supplemental security income recipient
(i) In generalFor purposes of this paragraph, the term “specified supplemental security income recipient” means any individual who, for the last month for which the Secretary has available information as of the date of enactment of this section, is eligible for a monthly benefit payable under title XVI of the Social Security Act (42 U.S.C. 1381 et seq.), including—
(I)
payments made pursuant to section 1614(a)(3)(C) of such Act (42 U.S.C. 1382c(a)(3)(C)),
(II)
payments made pursuant to section 1619(a) (42 U.S.C. 1382h(a)) or subsections (a)(4), (a)(7), or (p)(7) of section 1631 (42 U.S.C. 1383) of such Act, and
(III)
State supplementary payments of the type referred to in section 1616(a) of such Act (42 U.S.C. 1382e(a)) (or payments of the type described in section 212(a) of Public Law 93–66) which are paid by the Commissioner under an agreement referred to in such section 1616(a) (or section 212(a) of Public Law 93–66).
(ii) Exception

For purposes of this paragraph, the term “specified supplemental security income recipient” shall not include any individual if such monthly benefit is not payable for such month by reason of section 1611(e)(1)(A) of the Social Security Act (42 U.S.C. 1382(e)(1)(A)) or section 1129A of such Act (42 U.S.C. 1320a–8a).

(E) Specified railroad retirement beneficiaryFor purposes of this paragraph, the term “specified railroad retirement beneficiary” means any individual who, for the last month for which the Secretary has available information as of the date of enactment of this section, is entitled to a monthly annuity or pension payment payable (without regard to section 5(a)(ii) of the Railroad Retirement Act of 1974 (45 U.S.C. 231d(a)(ii))) under—
(i)
section 2(a)(1) of such Act (45 U.S.C. 231a(a)(1)),
(ii)
section 2(c) of such Act (45 U.S.C. 231a(c)),
(iii)
section 2(d)(1) of such Act (45 U.S.C. 231a(d)(1)), or
(iv)
section 7(b)(2) of such Act (45 U.S.C. 231f(b)(2)) with respect to any of the benefit payments described in subparagraph (C)(i).
(F) Specified veterans beneficiary
(i) In generalFor purposes of this paragraph, the term “specified veterans beneficiary” means any individual who, for the last month for which the Secretary has available information as of the date of enactment of this section, is entitled to a compensation or pension payment payable under—
(I)
section 1110, 1117, 1121, 1131, 1141, or 1151 of title 38, United States Code,
(II)
section 1310, 1312, 1313, 1315, 1316, or 1318 of title 38, United States Code,
(III)
section 1513, 1521, 1533, 1536, 1537, 1541, 1542, or 1562 of title 38, United States Code, or
(IV)
section 1805, 1815, or 1821 of title 38, United States Code,
 to a veteran, surviving spouse, child, or parent as described in paragraph (2), (3), (4)(A)(ii), or (5) of section 101, title 38, United States Code.
(ii) Exception

For purposes of this paragraph, the term “specified veterans beneficiary” shall not include any individual if such compensation or pension payment is not payable, or was reduced, for such month by reason of section 1505 or 5313 of title 38, United States Code.

(G) Subsequent determinations and redeterminations not taken into account

For purposes of this section, any individual’s status as a specified social security beneficiary, a specified supplemental security income recipient, a specified railroad retirement beneficiary, or a specified veterans beneficiary shall be unaffected by any determination or redetermination of any entitlement to, or eligibility for, any benefit, payment, or compensation, if such determination or redetermination occurs after the last month for which the Secretary has available information as of the date of enactment of this section.

(H) Payment to representative payees and fiduciaries
(i) In general

If the benefit, payment, or compensation referred to in subparagraph (C)(i), (D)(i), (E), or (F)(i) with respect to any specified individual is paid to a representative payee or fiduciary, payment by the Secretary under paragraph (3) with respect to such specified individual shall be made to such individual’s representative payee or fiduciary and the entire payment shall be used only for the benefit of the individual who is entitled to the payment.

(ii) Application of enforcement provisions
(I)
In the case of a payment described in clause (i) which is made with respect to a specified social security beneficiary or a specified supplemental security income recipient, section 1129(a)(3) of the Social Security Act (42 U.S.C. 1320a–8(a)(3)) shall apply to such payment in the same manner as such section applies to a payment under title II or XVI of such Act.
(II)
In the case of a payment described in clause (i) which is made with respect to a specified railroad retirement beneficiary, section 13 of the Railroad Retirement Act (45 U.S.C. 231l) shall apply to such payment in the same manner as such section applies to a payment under such Act.
(III)
In the case of a payment described in clause (i) which is made with respect to a specified veterans beneficiary, sections 5502, 6106, and 6108 of title 38, United States Code, shall apply to such payment in the same manner as such sections apply to a payment under such title.
(I) Ineligibility for special rule not to be interpreted as general ineligibility

An individual shall not fail to be treated as an eligible individual for purposes of this subsection or subsection (a) merely because such individual is not a specified individual (including by reason of subparagraph (C)(ii), (D)(ii), or (F)(ii)).

(6) Notice to taxpayer

As soon as practicable after the date on which the Secretary distributed any payment to an eligible taxpayer pursuant to this subsection, the Secretary shall send notice by mail to such taxpayer’s last known address. Such notice shall indicate the method by which such payment was made, the amount of such payment, and a phone number for the appropriate point of contact at the Internal Revenue Service to report any failure to receive such payment.

(g) Identification number requirement
(1) In general

In the case of a return other than a joint return, the $600 amount in subsection (a)(1) shall be treated as being zero unless the taxpayer includes the valid identification number of the taxpayer on the return of tax for the taxable year.

(2) Joint returnsIn the case of a joint return, the $1,200 amount in subsection (a)(1) shall be treated as being—
(A)
$600 if the valid identification number of only 1 spouse is included on the return of tax for the taxable year, and
(B)
zero if the valid identification number of neither spouse is so included.
(3) Qualifying childA qualifying child of a taxpayer shall not be taken into account under subsection (a)(2) unless—
(A)
the taxpayer includes the valid identification number of such taxpayer (or, in the case of a joint return, the valid identification number of at least 1 spouse) on the return of tax for the taxable year, and
(B)
the valid identification number of such qualifying child is included on the return of tax for the taxable year.
(4) Valid identification number
(A) In general

For purposes of this subsection, the term “valid identification number” means a social security number (as such term is defined in section 24(h)(7)).

(B) Adoption taxpayer identification number

For purposes of paragraph (3)(B), in the case of a qualifying child who is adopted or placed for adoption, the term “valid identification number” shall include the adoption taxpayer identification number of such child.

(5) Special rule for members of the Armed Forces

Paragraph (2) shall not apply in the case where at least 1 spouse was a member of the Armed Forces of the United States at any time during the taxable year and the valid identification number of at least 1 spouse is included on the return of tax for the taxable year.

(6) Coordination with certain advance payments

In the case of any payment under subsection (f) which is based on information provided under paragraph (5) of such subsection, a valid identification number shall be treated for purposes of this subsection as included on the taxpayer’s return of tax if such valid identification number is provided pursuant to subsection (f)(5).

(7) Mathematical or clerical error authority

Any omission of a correct valid identification number required under this subsection shall be treated as a mathematical or clerical error for purposes of applying section 6213(g)(2) to such omission.

(h) Regulations

The Secretary shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section, including any such measures as are deemed appropriate to avoid allowing multiple credits or rebates to a taxpayer.

References in Text

Section 272(c) of the COVID-related Tax Relief Act of 2020, referred to in subsec. (f)(3)(A)(ii)(II), is section 272(c) of title II of div. N of Pub. L. 116–260, which is set out as a note under this section.

The date of enactment of this section, referred to in subsec. (f)(5)(C) to (G), means the date of enactment of Pub. L. 116–260, which was approved Dec. 27, 2020.

The Social Security Act, referred to in subsec. (f)(5)(C), (D), (H)(ii)(I), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Titles II and XVI of the Act are classified generally to subchapters II (§ 401 et seq.) and XVI (§ 1381 et seq.), respectively, of chapter 7 of Title 42, The Public Health and Welfare. Sections 202 and 223 of the Act are classified to sections 402 and 423, respectively, of Title 42. For complete classification of this Act to the Code, see section 1305 of Title 42 and Tables.

Section 212(a) of Public Law 93–66, referred to in subsec. (f)(5)(D)(i)(III), is section 212(a) of title II of Pub. L. 93–66, July 9, 1973, 87 Stat. 155, which is set out as a note under section 1382 of Title 42.

Such Act, referred to in subsec. (f)(5)(H)(ii)(II), means the Railroad Retirement Act of 1974, act Aug. 29, 1935, ch. 812, as amended generally by Pub. L. 93–445, title I, § 101, Oct. 16, 1974, 88 Stat. 1305, which is classified generally to subchapter IV (§ 231 et seq.) of chapter 9 of Title 45, Railroads. For further details and complete classification of this Act to the Code, see Codification note set out preceding section 231 of Title 45, section 231t of Title 45, and Tables.

Treatment of United States Possessions

Pub. L. 116–260, div. N, title II, § 272(c), Dec. 27, 2020, 134 Stat. 1971, provided that:

“(1) Payments to possessions.—
“(A) Mirror code possession.—
The Secretary of the Treasury shall pay to each possession of the United States which has a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the amendments made by this section [enacting this section and amending sections 6211 and 6213 of this title and section 1324 of Title 31, Money and Finance]. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession.
“(B) Other possessions.—
The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits (if any) that would have been provided to residents of such possession by reason of the amendments made by this section if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to its residents.
“(2) Coordination with credit allowed against united states income taxes.—No credit shall be allowed against United States income taxes under section 6428A of the Internal Revenue Code of 1986 (as added by this section) to any person—
“(A)
to whom a credit is allowed against taxes imposed by the possession by reason of the amendments made by this section, or
“(B)
who is eligible for a payment under a plan described in paragraph (1)(B).
“(3) Definitions and special rules.—
“(A) Possession of the united states.—
For purposes of this subsection, the term ‘possession of the United States’ includes the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands.
“(B) Mirror code tax system.—
For purposes of this subsection, the term ‘mirror code tax system’ means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.
“(C) Treatment of payments.—
For purposes of section 1324 of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.”
Administrative Provisions

Pub. L. 116–260, div. N, title II, § 272(d), Dec. 27, 2020, 134 Stat. 1972, provided that:

“(1) Exception from reduction or offset.—Any refund payable by reason of section 6428A(f) of the Internal Revenue Code of 1986 (as added by this section), or any such refund payable by reason of subsection (c) of this section [set out above], shall not be—
“(A)
subject to reduction or offset pursuant to section 3716 or 3720A of title 31, United States Code,
“(B)
subject to reduction or offset pursuant to subsection (c), (d), (e), or (f) of section 6402 of the Internal Revenue Code of 1986, or
“(C)
reduced or offset by other assessed Federal taxes that would otherwise be subject to levy or collection.
“(2) Assignment of benefits.—
“(A) In general.—
The right of any person to any applicable payment shall not be transferable or assignable, at law or in equity, and no applicable payment shall be subject to, execution, levy, attachment, garnishment, or other legal process, or the operation of any bankruptcy or insolvency law.
“(B) Encoding of payments.—In the case of an applicable payment described in subparagraph (E)(iii)(I) that is paid electronically by direct deposit through the Automated Clearing House (ACH) network, the Secretary of the Treasury (or the Secretary’s delegate) shall—
“(i)
issue the payment using a unique identifier that is reasonably sufficient to allow a financial institution to identify the payment as an applicable payment, and
“(ii)
further encode the payment pursuant to the same specifications as required for a benefit payment defined in section 212.3 of title 31, Code of Federal Regulations.
“(C) Garnishment.—
“(i) Encoded payments.—In the case of a garnishment order that applies to an account that has received an applicable payment that is encoded as provided in subparagraph (B), a financial institution shall follow the requirements and procedures set forth in part 212 of title 31, Code of Federal Regulations, except—
“(I)
notwithstanding section 212.4 of title 31, Code of Federal Regulations (and except as provided in subclause (II)), a financial institution shall not fail to follow the procedures of sections 212.5 and 212.6 of such title with respect to a garnishment order merely because such order has attached, or includes, a notice of right to garnish federal benefits issued by a State child support enforcement agency, and
“(II)
a financial institution shall not, with regard to any applicable payment, be required to provide the notice referenced in sections 212.6 and 212.7 of title 31, Code of Federal Regulations.
“(ii) Other payments.—
In the case of a garnishment order (other than an order that has been served by the United States) that has been received by a financial institution and that applies to an account into which an applicable payment that has not been encoded as provided in subparagraph (B) has been deposited electronically on any date during the lookback period or into which an applicable payment that has been deposited by check on any date in the lookback period, the financial institution, upon the request of the account holder, shall treat the amount of the funds in the account at the time of the request, up to the amount of the applicable payment (in addition to any amounts otherwise protected under part 212 of title 31, Code of Federal Regulations), as exempt from a garnishment order without requiring the consent of the party serving the garnishment order or the judgment creditor.
“(iii) Liability.—
A financial institution that acts in good faith in reliance on clauses (i) or (ii) shall not be subject to liability or regulatory action under any Federal or State law, regulation, court or other order, or regulatory interpretation for actions concerning any applicable payments.
“(D) No reclamation rights.—
This paragraph shall not alter the status of applicable payments as tax refunds or other nonbenefit payments for purpose of any reclamation rights of the Department of the Treasury or the Internal Revenue Service as per part 210 of title 31, Code of Federal Regulations.
“(E) Definitions.—For purposes of this paragraph—
“(i) Account holder.—
The term ‘account holder’ means a natural person whose name appears in a financial institution’s records as the direct or beneficial owner of an account.
“(ii) Account review.—
The term ‘account review’ means the process of examining deposits in an account to determine if an applicable payment has been deposited into the account during the lookback period. The financial institution shall perform the account review following the procedures outlined in section 212.5 of title 31, Code of Federal Regulations and in accordance with the requirements of section 212.6 of title 31, Code of Federal Regulations.
“(iii) Applicable payment.—The term ‘applicable payment’ means—
“(I)
any advance refund amount paid pursuant to section 6428A(f) of Internal Revenue Code of 1986 (as added by this section),
“(II)
any payment made by a possession of the United States with a mirror code tax system (as defined in subsection (c) of this section) pursuant to such subsection which corresponds to a payment described in subclause (I), and
“(III)
any payment made by a possession of the United States without a mirror code tax system (as so defined) pursuant to subsection (c) of this section.
“(iv) Garnishment.—
The term ‘garnishment’ means execution, levy, attachment, garnishment, or other legal process.
“(v) Garnishment order.—
The term ‘garnishment order’ means a writ, order, notice, summons, judgment, levy, or similar written instruction issued by a court, a State or State agency, a municipality or municipal corporation, or a State child support enforcement agency, including a lien arising by operation of law for overdue child support or an order to freeze the assets in an account, to effect a garnishment against a debtor.
“(vi) Lookback period.—
The term ‘lookback period’ means the two month period that begins on the date preceding the date of account review and ends on the corresponding date of the month two months earlier, or on the last date of the month two months earlier if the corresponding date does not exist.
“(3) Agency information sharing and assistance.—
“(A) In general.—The Commissioner of Social Security, the Railroad Retirement Board, and the Secretary of Veterans Affairs shall each provide the Secretary of the Treasury (or the Secretary’s delegate) such information and assistance as the Secretary of the Treasury (or the Secretary’s delegate) may require for purposes of—
“(i)
making payments under section 6428A(f) of the Internal Revenue Code of 1986 to individuals described in paragraph (5)(A) thereof, or
“(ii)
providing administrative assistance to a possession of the United States (as defined in subsection (c)(3)(A)[set out above]) to allow such possession to promptly distribute payments under subsection (c) to its residents.
“(B) Exchange of information with possessions.—
Any information provided to the Secretary of the Treasury (or the Secretary’s delegate) pursuant to subparagraph (A)(ii) may be exchanged with a possession of the United States in accordance with the applicable tax coordination agreement for information exchange and administrative assistance that the Internal Revenue Service has agreed to with such possession.”
Public Awareness Campaign

Pub. L. 116–260, div. N, title II, § 272(e), Dec. 27, 2020, 134 Stat. 1975, provided that:

“The Secretary of the Treasury (or the Secretary’s delegate) shall conduct a public awareness campaign, in coordination with the Commissioner of Social Security and the heads of other relevant Federal agencies, to provide information regarding the availability of the credit and rebate allowed under section 6428A of the Internal Revenue Code of 1986 (as added by this section), including information with respect to individuals who may not have filed a tax return for taxable year 2019.”