The identity of dark matter is being sought with increasingly sensitive and voluminous underground detectors. Recently the XENON1T Collaboration reported excess electronic recoil events, with most of these having recoil energies around 1-30keV. We show that a straightforward model of inelastic dark matter produced via early Universe thermal freeze-out annihilation can account for the XENON1T excess. Remarkably, this dark matter model consists of a few simple elements: sub-GeV mass Dirac fermion dark matter coupled to a lighter dark photon kinetically mixed with the standard model photon. A scalar field charged under the dark U(1) gauge symmetry can provide a mass for the dark photon and splits the Dirac fermion component state masses by a few keV, which survive in equal abundance and interact inelastically with electrons and nuclei.