I read occasional hand-wringing in tax forums about how there is "double dipping" when a parent gets an EIP one year (based on the prior year return) and the no-longer-dependent adult child gets an RRC the same year.
But let's look at it differently: essentially, it is a retroactive credit for the prior year as well as a credit for the current year. When you spread it over two years, it no longer looks like double dipping, does it? Isn't this a much better way for Congress to give a retroactive credit, than to require amended returns?
Example:
TY2020: parent receives EIP based on TY2020 (even though they got check in 2021) - does not have to repay in TY2021
TY2021: adult child received RRC on tax return
That is just a tax credit allowed for two years, one of which is retroactive, isn't it?
But let's look at it differently: essentially, it is a retroactive credit for the prior year as well as a credit for the current year. When you spread it over two years, it no longer looks like double dipping, does it? Isn't this a much better way for Congress to give a retroactive credit, than to require amended returns?
Example:
TY2020: parent receives EIP based on TY2020 (even though they got check in 2021) - does not have to repay in TY2021
TY2021: adult child received RRC on tax return
That is just a tax credit allowed for two years, one of which is retroactive, isn't it?