2022 taxes: IRS stated mistakes were made on Federal filings, but state said everything was 100% correct.

[Irasaco]

In August 2024, I received a letter from the IRS stating that a mistsake was made on my tax year 2022 filing and that instead of getting a $1000+ refund, I owed the IRS $378 which included penalties because of the time from my filing until the time they mailed the notice. At the same time, I received a note from my state giving me  a tax refund. That paperwork also stated that my taxes were 100% correct.  Given that the state also uses the federal tax, how can the federal be wrong but the state be correct?

To not incur more penalties, I mailed the IRS a check for the $378. But I wonder how I find out what mistake was made. I used TurboTax to do both my federal and state taxes and the program stated that my taxes were "100% correct." The information that I provided to Turbotax were from the same sources (main W2 job, 2 side businesses with minimal income, 1098-T from my school [I attend part-time]) as used in tax year 2021 but no errors were found on the 2021 return which was also made and filed using TurboTax.

[Bsch4477]

Since many credits apply only to federal taxes, that and other differences can account for the difference in accuracy of the two returns. 

The IRS letter should explain why your refund was adjusted. You attended school part time. Were you at least a half time student?  If not, did you claim education credit you were not eligible to receive?

[xmasbaby0]

The IRS letter should tell you what was wrong.  

Some possibilities----a LOT of people made mistakes on their 2022 federal returns due to errors they made with the recovery rebate credit (for stimulus checks they received) Line 30. or with the child tax credit. Line 28.    Those errors would have had no effect on your state return, only your federal return.   Were the mistakes on your return related to  line 28 or on line 30 of your Form 1040?   Did you answer something incorrectly about the amount of the stimulus check(s) you received or about the advance child tax credit checks you received?

[Irasaco]

You are correct in that their issues was with my education credits. They said that one identification number was invalid. They also said that my education credits were wrong. I attend two schools usually simultaneously, taking one class at a time at each school. So that is less than half-time, but together they might be least half-time; it's hard to tell because one school is on the quarter system and the other school is on the semester system. TurboTax asks if I attend at least half-time for each school, but it doesn't ask (or, maybe I missed it), if both schools together are half-time.

Even though I already paid the difference, I still plan on filing an amended tax return for 2022 after I fix what errors I can fix. The reason I haven't amended it yet is because I am very short on time. This semester, I am taking two classes (half-time) at one of my schools and no classes at the school on the quarter system until next month, when a short-term class starts for the winter quarter.

[Irasaco]

The IRS letter says, "You didn't include the institution's employer identification number (EIN) as required on line 22(4)" and "You incorrectly computed the credit based on the answers to questions on lines 23 through 26"

It was TurboTax that supposedly put in the education information and did the computation, not me. So, did TurboTax make a mistake? I thought TurboTax guaranteed 100% correctness?

No matter what happened, I will file an amended return through TurboTax and correct these errors, and see what the IRS says then.

Note: I have not received any stimulus check and my income was around $45K for those years.

[xmasbaby0]

@Irasaco "I have not received any stimulus checks...."

Your eligibility for the stimulus money—-now available as the recovery rebate credit— will depend on your circumstances in 2020 and/or 2021.   If you could be claimed as someone else’s dependent in 2020 or 2021, you are not eligible for the recovery rebate credit now.

 The first stimulus checks were issued in 2020; the first one was for $1200 for adults and $500 for qualified children dependents under the age of 17.   The IRS was in a hurry to send out those checks so they sometimes used information from your 2019 return to send out the check.  Or sometimes they sent it after you filed your 2020 return.

The second stimulus was sent in late 2020 or early 2021; that one was $600 per adult and $600 for qualified children dependents under the age of 17.

The 3rd stimulus check was $1400 for adults and $1400 for any dependent you claimed, and was sent out in 2021.

If you did not receive the first or second stimulus check,—Sorry—it is too late.  The deadline to file a 2020 tax return and get that credit was May 17, 2024.  

If you did not receive the 3rd stimulus check, you can get it by filing a 2021 tax return and use the recovery rebate credit in Federal Review.    The stimulus amount will show up on line 30 of the Form 1040.

Check your own bank account for deposits of the stimulus checks, and check your online account with the IRS to see what the IRS shows they sent to you.

Try checking your online account with the IRS (and if you filed a joint return—check for BOTH of you)

https://www.irs.gov/payments/your-online-account

If you need to trace a payment that the IRS says has been issued to you, mail or fax a completed IRS Form 3911, Taxpayer Statement Regarding Refund.