Miscalculation of Recovery Rebate Credit

[Landmand]

I filed on TurboTax for the 5th year in a row on 2/9/2021.

Somehow, I got nothing on my return, and in addition, had to pay $1 to the IRS. My return was accepted and $1 withdrawn from my bank account. That isn't necessarily the issue though.

Yesterday, 3/22/2021 I received an official letter from the IRS stating they found a miscalculation on my 2020 Form 1040 affecting my "Recovery Rebate Credit", and as a result I now owe $600.00 that must be paid by 4/19/2021.

I have never in my life made enough to ever have to pay in. After sitting on their phone line for 1 hr 35 mins I explained the situation and the representative said since I did receive the $600 via direct deposit, and I also claimed it on my 2020 return (a mistake on my part, I thought I was supposed to), that I have to pay $600. 

She also said amending my return would do nothing. This makes no logical sense. If it was just my small mistake, and amending my return to not claim the Rebate Credit because I received it, how do I still owe $600??? If I did not make this mistake I would be good, but oops now you owe $600. I am livid.

I have a manager scheduled to call me back in 24-48 hours because I don't agree or understand.

Can anyone helo me understand this and what my options are? I am really scared.

Sincerely,

Matt

[VolvoGirl]

Was there $600 on 1040 line 30 for the Recovery Rebate Credit?  That was for the 2nd Stimulus check.   The IRS has been adjusting returns that claimed it but the IRS already sent it.  Did you get it after you filed?  

Sorry you tried to claim it again on your tax return when you already got it.  It reduced the tax due on your return.  Your tax return should have been a 599 tax due instead of $1 refund.  Sorry you owe the 600 back.  You don't get it twice. 

Amending wont help.  If you take off the 600 credit on line 30 you are left with owing 599.  Don't know why you owe for 2020.  Your withholding must have gone down.  You have to compare 2019 and 2020 to see what changed.  

[VolvoGirl]

Oh you owed the IRS $1?  Then change my 599 amounts to 601.  Without the 600 Recovery rebate credit your return should have been a $601 tax due.

[Landmand]

No my completed return was I owed $1.

Then as I previously stated I got a brand new letter from them saying I owe 600. 

I shouldnt owe anything I barely make 20k a year.

Claiming the credit was a MISTAKE I didnt mean to do. So if I amend the return, why does it make any logical sense I owe 600 more?

[fanfare]

there is no point in trying to file an amendment.

If you did prepare that form 1040-X correctly  it would say that you owe $600. !

Just pay the $600 amount back to the IRS as asked.

[fanfare]

they will charge interest if you put it off and that can add up fast.

[VolvoGirl]

Sorry it makes perfect sense.  You had a 600 credit on your return.  If you take it off you don't get it and your return should have been $600 more due.  

We don't know why you ended up owing.  But usually your withholding wasn't enough to cover the tax on your income. Look at your return.  What is your income on line 15?  What is the tax on line 16?  Then subtract your federal withholding.  That is the amount you still owe or get back unless you have other credits like the EIC or Child Tax Credit.

[Landmand]

Ok not sure if you are reading what I am putting:

-I accidentally claimed the recovery credit. I had months prior received this 600 as a direct deposit, so i should not have claimed it. I stated that was a mistake

-I am already being asked to pay an additional 600 in a seperate letter I received 2 days ago.

-If I did not make this mistake, and did not claim this credit why would "i still owe 600" that makes 0 logical sense. I was already given it. Why cant that be amended????

-seperately whoever said just pay them as asked youre out of your mind. Ill explore every single option before I shell out 600 i dont agree that I owe. Horrible awful advice shameful even. Its like extortion.

-i may have made some mistakes filing this year, I had just got out of hospital, and this year I was not able to claim my son. So I may have done something wrong. My income hasnt really changed in 5 years and the only difference is I didnt claim my son this year. Yet this is the year I get NO money back, OWE $1, and get a letter a month later that I OWE $600?

Not adding up. So far this advice is absolutely horrible. I have an appointment at H&R in the morning maybe I can figure out my mistake.

[VolvoGirl]

Sorry but you are not understanding. You don't get the 600 twice.  The IRS already gave you a deposit for it and your return  tried to claim it again on line 30.  

We know it should not be on your tax return.   But it was and it REDUCED your real tax due to $1.  So if you take it off your tax return you don't get to reduce the tax due you would have had.  

[VolvoGirl]

When you go to HR Block show them this thread so they can explain it to you more.   Yes not claiming your child may have affected it a lot.

[Missjm]

I owed $42 - but now I got the same $600 letter...I make less than $50k - why do I need to pay $600 now?!!!

[Pcprime]

In my opinion this is a glitch in TurboTax’s software. I did both mine and my girlfriends taxes and when the question about whether we received our stimulus we answered affirmative and in both cases it said congratulations you qualify for the recovery credit! I thought it was weird when it happened bc it made my tax liability turn to a refund and it lessened the tax owed by my girlfriend. Now we have both received letters stating that we owe more tax. I feel this is wrong. While I understand what happened (now) I trusted that TurboTax did the calculations correctly. So what about their guarantee? I’m frustrated and am rethinking using TurboTax ever again. 

[Missjm]

yes I am pretty piss off about this....Turbo tax you need to be clear when you are asking that question so this does not happen to OTHERS!!!!

I have done my taxed with Turbo for years - this was a HUGE mistake - I feel like they should refund my fee I DID pay this year :(!!!!

[cellsafemode]

I got a notice regarding a 78 dollar discrepancy for this. 

It seems like there is a calculation issue with turbo tax.  I triple checked what i entered to make sure it was accurate since the second stimulus payment i got was based on previous year filings since i didn't file until march and i knew my 2020 filings would be lower and had impacted the amount (had we filed sooner). 

No other corrections from the IRS,  just this credit amount.  

[Clarencemoran11180]

If there was a miscalculation how long would it take to receive the taxes asking for a friend