Amending return and 2021 stimulus

Forum|Forum|5 years ago
March 17, 2021
7 replies
25 views

I filed my 2020 taxes in early February and received my federal refund February 26. We just received the latest stimulus payment and it was lower than the max amount because we're between the AGI thresholds. I had planned to contribute to a traditional IRA before 4/15/21 and then file an amended 2020 return with my new lower AGI amount...this would have increased our stimulus amount significantly.

Question is, if I do the amended return next week reflecting the lower AGI, is there a way to get the additional stimulus funds based on the lower AGI? Not able to get anyone on the IRS help line and the stimulus help line suggested I would need to file the Recovery Rebate during the amended return but in reading about it that form seems to be only for stimulus not received in 2020.

Not A Product Question

CatinaT1

Level 15

This is unclear at this point. You are correct that the Recovery Rebate Credit is only for the first two stimulus payments.

This link continues to be updated as information becomes available. This information is provided by the IRS - Third Stimulus FAQ

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ilya555Author

Level 2

I’ve tried calling the IRS numerous times for clarity on this and the individual accounts line literally has no representatives available nor any way to queue up; just says they have high call volume and to try another day. I would like clarity on this so I can submit an amended return properly...can anyone help?

DMarkM1

Level 15

IRS is reporting that they will be making a sweep of returns to get out any updates to stimulus payments at the end of the tax season. Additionally, when you work the amendment you will change your Recovery Rebate Credit on the amendment as well.

Remember by contributing to your IRA to get the higher stimulus amounts, you're getting a tax savings this year as well as the potential additional stimulus amounts. For example if you put 5,000 into an IRA to move you to the max stimulus. Maybe you already received 90% of the joint filing Recovery Rebate amounts (.9 x 3600 = 3240) so you will get $360 extra credit now plus the 5,000 is excluded from taxes this year.

I don't know your actual numbers but the concept is the same.

By working the contribution and the amendment you will have some benefit either way.

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ETFtrader

Level 4

Any update on this topic?

My situation is that my wife and I were just over the 2021 stimulus AGI threshold limit for joint filers when we filed our 2020 taxes. We received only a small amount of 2021 stimulus funds due to the steep AGI phase-out over $150K. I realized after filing the 2020 return that if I made a max IRA contribution it would increase the 2021 stimulus to nearly the full $2800 and also increase our 2020 recovery rebate by $700 since I earned no income in 2020. It also turns out that the IRA contribution will also significantly increase our Federal and State tax refund. So I intend to amend our 2020 return.

Question: If I file the amended 2020 return to reflect the IRA contribution, will the amendment trigger the additional stimulus funds to be sent? Also, during the amendment preparation process in TurboTax, will it prompt me regarding the amount of 2021 stimulus we have already received so it computes the corrected 2021 stimulus amount (or is it not part of the amendment process)?