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

[DocTin27]

HAS ANYONE ELSE HAD THIS PROBLEM? 

We received a valid IRS letter informing us we owe over @$2,000.00 in taxes versus a return of over $700.00.  This is due to the Turbo Taxes Recovery Rebate Credit Worksheet, not a Federal Form. On line 14 it directed that $2,800.00 (the full amount of the Stimulus Payment be automatically entered on Lin30 of our Form 1040. This treated the $2,800.00 as a Tax Credit not as additional income, thus reducing our taxable liability and giving us a REFUND vs. the Tax Due to IRS. 

We believe that TT's  "100% Accurate Calculations Guarantee" warrants applicability for their error.

[floridaflash1]

I have the same issue, I received a $2800 recovery rebate credit and received a Notice CP11 from the IRS saying I owe $2800 + penalties & interest!  The software must have an error.

[VolvoGirl]

Sorry but Line 30 is only if you didn't get the full amount or qualify for more.   If you already got the 2800 for the 3rd Stimulus payment then line 30 should be zero.  You must have answered the Stimulus question wrong.  You needed to say yes you got the amount you were eligible for.  

[fanfare]

@floridaflash1 

TurboTax fine print makes it almost impossible to collect on their guarantee.

[NCperson]

@floridaflash1 @DocTin27

You were entitied to EITHER the Stimulus or the Recovery Credit, but not both.

There was a point in the interview process where you were asked how much you received in stimulus. 

The calculation of Line 30 (the Recovery Rebate Credit) is totally automated in TT, with one exception: how much you already received from the stimulus

The calculation of Line 30 is simple:  # of people listed on your return times $1400 LESS what you received for the 3rd stimulus (paid by the IRS between March and May, 2021), but not less than zero.

if you underreported what you received in stimulus, the IRS adjusted your tax return to match their records.  

the software wasn't in error, unless you failed to enter how much stimulus you already received

Also, and many missed this, if you were filing "joint" there were TWO Letter 6475's sent out - one to each spouse.  You were to add the amounts from the two letters together, otherwise, you under-reported what you already received

does that help?

[floridaflash1]

My spouse nor I received the 3rd stimulus payment (EIP3) so TurboTax correctly put $2800 Recovery Rebate Credit on Line 30 of my return.  All the questions on the worksheet were answered correctly.  

[NCperson]

@floridaflash1 -  but the problem is while you think you didn't receive it, the IRS thinks they sent it, so some suggestions

1) check you bank statements one more time from March - May, 2021 to be sure you didn't receive it.

2) fill out the trace document from the IRS 

https://www.irs.gov/pub/irs-pdf/f3911.pdf

[NCperson]

@fanfare - 

it's a world of inputs, calculations and outputs. 

1) the outputs are only accurate if the inputs and the calculations are correct

2) TT is guarenteeing the calculations

3) TT is not guarenteeing the inputs (it would be a bad business proposition to do so)

so is the reason it is so hard to collect on the guarentee is the quality of the software itself (the calculations)🤔 

[SweetieJean]

Lots of folks (and not just TT customers) have made input mistakes this year, as many press articles have indicated.  Also see:

Tax Season Refund Frequently Asked Questions | Internal Revenue Service (irs.gov)

[rfoose]

If there is no error, what should I do? How do I get more information on the refund rule? Can I appeal to the IRS?

[NCperson]

@rfoose - can you explain more?  if there was no error, what is your issue? 

what refund rule are you referring to? 

[Critter-3]

If you never received a stimulus deposit or check—and the IRS records show  they paid you—then you should ask the IRS to trace your payment.  Many payments were sent and not cashed so a trace is the only option available to you.  Some were sent on debit cards that looked like junk mail and many folks thru them  in the trash.    If the payment was never cashed ONLY THEN can you send in an amended return to claim the credit and attach the findings letter with the 1040X form. 

The fastest way to initiate a trace is to contact the IRS by calling us at 800-919-9835.

You can also complete Form 3911:

• Write "EIP3" on the top of the form to identify the payment you want to trace.
• Complete the form answering all refund questions as they relate to your Economic Impact Payment.
• When completing item 7 under Section 1:
• Check the box for "Individual" as the Type of return
• Enter "2021" as the Tax Period
• Do not write anything for the Date Filed
• Sign the form. If you file married filing jointly, both spouses must sign the form.

You will generally receive a response 6 weeks after we receive your request for a payment trace, but there may be delays due to limited staffing. 

[Kelbotax]

It said to enter the amount on a mailed form.  I only received one form for myself which had 1/2 the amount it should be, since apparently there was another form mailed (never received) that had the other half.  So....my return was edited by the IRS and my refund reduced big time.  The remaining amount was supposed to come a long time ago and I have not received anything.  The instructions should have been more clear about the actual amount to enter, particularly if you are doing a joint return with your spouse.

[xmasbaby0]

@Kelbotax Not sure what makes you expect that the "remaining amount" is still coming.   If you put an inflated amount on line 30 by not reporting all of the 3rd stimulus checks you and your spouse received, there is no more coming.   The IRS correctly reduced your refund.   If you actually received $1400 per person on your tax return then your line 30 should have been blank.   When you misunderstood the question and only put half in, the software treated it as if you had not received all of the stimulus money and put an amount on line 30.   It was a user error.  The IRS sent letters to each spouse with half the stimulus amount on letter 6475.   If you are in doubt as to how much you received in total, check your bank account for the deposits of $1400 per person sometime after mid-March or check your accounts online with the IRS  for EACH of you:

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

[NCperson]

@Kelbotax -  I agree it may have been confusing as most of the posts I see on this board related to the Recovery Credit adjustments are joint returns where one spouse didn't know there was  a 2nd letter to be ADDED to the 1st letter.

But please go back to the software and look at all the warning, exclamation points, etc. that TT added about making absolutely sure what you entered matched what you received and the dire consequences of not doing so.  

I am a little confounded at the number of joint filing tax payers that got tripped up by this, despite the way TT designed the screen.  What could they have done differently.  

are you saying the remaining refund due to you has not been received? did it flip into money owed to the IRS? did you look at your transcript at IRS.GOV to see when or if they issued it?