Having a problem using the Federal Stimulus Payment as a Recovery Rebate Credit with TurboTax?

[Just_Trying_To_Pay_My_Taxes]

I filed my taxes with TurboTax in March 2021 for the 2020 tax season. My Federal 2020 Tax (E-File) return was accepted by the IRS. I paid what I owed in full and this payment was accepted by the IRS via a direct bank withdrawal. I applied my Federal Stimulus Payment as a Recovery Rebate Credit when filing with TurboTax. Several weeks later, I got a CP11 (letter) notice from the IRS, stating that I owed payment in full for the 2020 tax season. This is a clear miscalculation since I paid in full and now the IRS believes I owe them for what I have already paid.

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Is anyone else having a problem using the Federal Stimulus Payment as a Recovery Rebate Credit with TurboTax?

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How did you solve this issue?

[DanaB27]

Did you receive the first and second stimulus payments? It seems the IRS has records that show you received them and therefore disallowed the Recovery Rebate Credit.

Please see Understanding your CP11 Notice for options what you can do.

If you received Notice 1444 in the mail but have not received your payment as mentioned in the notice, then you need to request a trace to be able to claim the Recovery Rebate Credit on your 2020 tax return. Please see How do I request a payment trace to track my first or second Economic Impact Payments?

[Just_Trying_To_Pay_My_Taxes]

In this case, the IRS accepted the return.

Then they didn't credit me with either payment method and simply stated I owe what I already paid.

They attached a payment voucher to the letter and demanded payment for what I already paid.

[DanielV01]

First, the Recovery Rebate Credit is only claimed if you didn't receive either the first and/or the second stimulus payment.  If you did receive the stimulus payments, the IRS will not allow the credit now.  

Now if you did claim the Recovery Rebate Credit correctly, there is a quirk.  Remember that it is what was sent for the stimulus payments.  Since the original stimulus payments were issued to taxpayers even if they had a debt with the IRS, the IRS did not use it as an offset against taxes owed.  It was paid out regardless, and that could be what you are also seeing.

Regardless, the letter should explain, and if you don't understand it, you can call the IRS for clarification.  Don't forget that you can also use the Audit Support Guarantee for assistance.  See this link for further information:  What is the TurboTax Audit Support Guarantee?

[missee_a]

Yes! I had issues in for tax year 2020 and now am having issues AGAIN for 2021 (just received 4/26/22).  I feel like I am DONE with TurboTax as the guidance in the tutorial is clearly misguided.  Now to fight with the IRS because they also don't seem to have credited the money I already sent them and are now asking for that PLUS the Recovery Credit that I believe I am still owed :(