What is the net effect of the EIP (economic impact payment) and RRC (recovery rebate credit) on each of the following taxpayers.
What is the net effect of the EIP (economic impact payment) and RRC (recovery rebate credit) on each of the following taxpayers.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Self-Study Problem 1.7
What is the net effect of the EIP (economic impact payment) and RRC (recovery rebate credit) on each of the following taxpayers.
The EIP is $1,400 for single taxpayers and $2,800 for married, filing jointly taxpayers. An additional $1,400 is allowed for each qualifying
child.
1. Mirka and Liam are married and file jointly with AGI of $97,000 in 2021. In 2021 they received an
EIP of $4,200 based on their filing status and having a dependent child at the end of 2020.
2. Phoebe was a dependent taxpayer in 2020 and had not filed a tax return. In 2021, she failed to
request and did not receive an EIP, although she was no longer a dependent and had AGI of
$28,000 as a single taxpayer.
3. Mahima received a $1,400 EIP in 2021. Due to the birth of her son in 2021, Mahima was
classified as a head of household taxpayer with AGI of $47,000.
4. Jane and Marshall file jointly in 2021 and claim two dependents. They received a $5,600 EIP in
2021. Jane received a large bonus in 2021 for her efforts during the pandemic and their joint AGI
was $155,000 in 2021.
Amount of RRC
taxpayer may
claim
000
K
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