ERROR in Turbo Tax Calculations for Federal Economic Stimulus Payment Due To TT FORM "Recovery Rebate Credit Worksheet".

[JSPhoenix0609]

With respect to you as well....

1. We filed Joint.  We entered the correct amount of BOTH our stimulus payments in TT.
This was verified through my personal documentation, our bank accounts AND the IRS website. 

2. We did NOT receive a 3rd stimulus payment; therefore we answered the question "No" accordingly.

3. TT calculated we were due for a Recovery Rebate Credit, when in fact we were NOT.  We had received all the money we were due BUT not a "3rd Stimulus payment".

The ACTUAL problem is that TT is asking if you received a 3rd payment when in fact it should be asking if you have received all of the stimulus money you were due (using the calculation in your email or looking in the help articles of TT, or even checking with the IRS.)

Hence my prior statement advising TT is wrong.  NOT that "we" entered it wrong or that we calculated it wrong.

Hence, your email explaining the only two scenarios actually left this scenario out and may be more likely the issue for some of the folks who have had this problem.

But thank you for taking the time to explain and respond to people posting questions to TT, I'm sure 99% of the time your assessment and responses to other questions are probably accurate.

Have a great day!  

[NCperson]

@JSPhoenix0609 - thank you for the detailed response.......

why do state that TT calculated what you were due as Recovery Rebate credit incorrectly.  Can you please explain that with the numbers on your tax return? (see my items 1-3 below). It'll help with future posts on this topic.

1) how many people were listed on your tax return? 

2) What was on Line 11 of your Form 1040; if this was below $150,000 or above $160,000 just state that,  If it is between $150,000 and $160,000 would you mind providing the exact figure? 

3) what was on Line 30 of your tax return? 

thanks in advance, 

[soccorfam29]

We're in the situation listed below:

(There is also a 'haircut' as your AGI exceeds $7500 and approaches $80,000 (single), or exceeds $150,000 and approaches $160,000 (joint) but we can deal with that later if impacts you)

Our AGI exceeds $150,000, but is below $160,000.  TT calculated a percentage of the $2800 Recovery Rebate to deduct from our taxes; however, the IRS sent a letter stating we owe the amount that was deducted + interest. 

Is this a TT error?

[NCperson]

@soccorfam29  unlikely - please provide the following and I can explain the math

1) number of people listed on your tax return

2) what is your AGI on Line 11 of your Form 1040 (you state this is between $150k and $160k)

3) what is on Line 28

4) how much did you receive for the 3rd stimulus last year - please do not depend on your memory.  Please check your bank account statements from March to May, 2021 or review Letter 6475 (and if you filed joint, there are TWO letters that needed to be added together) 

[VolvoGirl]

@soccorfam29  How much did you get for the 3rd Stimulus payment based on your 2020 return?  The IRS probably sent you more than you are eligible for 2021.  Did you get IRS letter 6475 saying how much they sent you?  You should each get a letter for half but you need to enter the total for both.

A lot of people forgot they got the deposit last March - May.  Or missed one payment and entered the wrong amount.  Then when the IRS reduces their refund and they check their bank accounts they have been finding the payments.

Double check your bank statements and Check your IRS account (both accounts if married)

Your Online Account | Internal Revenue Service

If the IRS thinks they sent it to you but you didn't get it request a trace for a missing third Stimulus payment

https://www.irs.gov/newsroom/questions-and-answers-about-the-third-economic-impact-payment-topic-j-p...

[Ad420]

I got the same issue experience in my side is different though they told me it was cause I didn't put my daughter's social so they were supposed to give me 4600 and only gave me 1800

[NCperson]

@Ad420 - how were you able to enter your daughter into Turbo Tax if you didn't enter the SS#? 

[VolvoGirl]

@Ad420  The difference is 2800.  Did you get a letter from the IRS listing like 5 things why they reduced the Recovery Rebate Credit?   The ssn is only one reason.   Actually none of the reason listed is why.   The IRS thinks they already sent it to you.

Check your return line 30.  Line 30 is only if you didn't get the full amount or qualify for more. 

Double check your bank statements and Check your IRS account (both accounts if married)

Your Online Account | Internal Revenue Service

If the IRS thinks they sent it to you but you didn't get it request a trace for a missing third Stimulus payment

https://www.irs.gov/newsroom/questions-and-answers-about-the-third-economic-impact-payment-topic-j-p...

[ntlbrittain]

Yes that happened to me, I didn't get a refund and every explanation I'm told makes no sense to me. How did you get this problem solved ?

[NCperson]

@ntlbrittain - the adjustment is probably correct.  Please post the answers to these questions and I can explain

1) what is on Line 30 of Form 1040?

2) how many people are listed on your tax return

3) how much did you receive for the 3rd stimulus (please look at your bank account statements from March - May, 2021 .  Alterntatively, how much is listed on Letter 6475 -WARNING: if you filed joint, there are TWO letters.  Please do not go from memory!)

4) how much were you expecting for the refund?

5) how much do now owe? 

Note that you were elgiible for the 3rd Stimulus or the Recovery Rebate - but not both!

[JSPhoenix0609]

Sure, 

1. Filed "Married filing jointly" - total of 3 people.  My husband and I plus my son who is living with us while attending college.

2. Below $100,000

3. $4200  (my husband received $1400 and I received $2800 for myself and my son)

We received that amount in the first round of stimulus payments.  We did not receive a SECOND or a THIRD payment.  However, as you can see we already received all the money we were going to.  While going through TT, it specifically asks if you received the third stimulus payment.  I answered "no" because we did not.  After answering that question, TT automatically applied the Recovery Rebate Credit.  At the time I did not pay much attention to it because I was trying to finish it up and stupidly relied on TT to be more accurate than  my knowledge of taxes.....as stated earlier, TT showed us due a refund of $3200.  After filing, we received notice from the IRS we owed $900 (because we incorrectly applied the RRC). 

I hope this helps!  It's quite frustrating because I have "0" exemptions specifically to avoid this situation.  Like most other people, we are literally living paycheck to paycheck and don't have $900 lying around to pay them so we're trying to figure that out right now.  (We used up our emergency savings while my husband was unemployed for several months due to COVID.)  We are behind on several bills already and now have to shift things around more.  The "Refund" we thought we were getting was going to be used to help get us caught up so this was quite the kick in the gut!  That's what is so frustrating about this whole thing.

Anyway, again, thank you for your time responding!

[NCperson]

@JSPhoenix0609 - let's be sure we both agree on what constitutes the '3rd stimulus'

Stimulus 1 was the summer of 2020 and Stimulus 2 was January of 2021.  Both were reconciled as part of the 2020 tax return so nothing further required to be discussed here.

Stimulus 3 (EIP3) was issued in March - May, 2021 and was $1400 per person. THAT is was we are discussing. On the 2021 tax return you were eligible for Recovery Rebate Credits LESS what you had already received for the 3rd stimulus

You state you received the $4200 "for the first payment" but then you state you did not receive the THIRD stimulus payment.... this is the same payment!!  

If you received the $4200 back in the March - May, 2021 timeframe, then the answer in TT to the question whether you had received the 3rd stimulus (or words to that effect) should have been 'yes'.  There should have been Letter 6475 received from the IRS confirming the amoubnt they sent (2 letters - one for each spouse).  If the response to whether the money had been received had been 'yes' then Line 30 would have been zero and the rerfund would have been $4200 less (or the tax due would have been $4200 higher)

Unfortunately, the IRS adjustment is correct.  Suggest going back and reviewing the wording of the questions in the Federal Review section of Turbo Tax related to the stimulus payment......  

[Critter-3]

The program is quite clear what it is asking for ... it tells you how much of the credit you are eligible for and then asks you exactly how much you already got in advance and even gives links for more information if you are still unsure what you are being asked.  Your post seems to insinuate that you may not have known that the third stimulus payment you got was the third payment ... did you think it was the first ?  The first  round was $1200 single/$2400 for a couple + $500 per dependent under 17 listed on the 2019 or 2020 return ... total for you would be $2400 or $2900 if the child was under 17 at the end of 2020. 

Once you entered how much you got the next screen asks if you are very sure so I don't know how much more the TT DIY program can do to make this any more crystal clear but sadly you are not the only one who got this wrong ... the IRS is processing millions of returns with this error from all the DIY & professional programs alike.  

[ntlbrittain]

How can this be corrected,so I may get my proper refund

[NCperson]

@ntlbrittain - can we please figure out if a correction is required? In most cases the adjustment is correct!!  Answer the questions below and I can explain: 

1) what is on Line 30 of Form 1040?

2) how many people are listed on your tax return

3) how much did you receive for the 3rd stimulus (please look at your bank account statements from March - May, 2021 .  Alterntatively, how much is listed on Letter 6475 -WARNING: if you filed joint, there are TWO letters.  Please do not go from memory!)

4) how much were you expecting for the refund?

5) how much do now owe? 

Note that you were elgiible for the 3rd Stimulus or the Recovery Rebate - but not both!