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

[Traillens]

Thank you. I will try to go back to the Federal Review to look at the numbers. We filed an extension so I am just now working on the final form to submit to the IRS. 

If all else fails perhaps I can "go to forms" and zero that out on the actual IRS form and hope it flows back to TT form before mailing it.  I would be glad to take that $2000.00 refund but the IRS is never that generous.

I appreciate your quick response.

[NCperson]

here is the easy math for Line 30...

$1400 times the number of people you list on your tax return LESS what you received in stimulus last year, but not less than zero.

Please check your bank account statements for last March - May, 2021....how much did you receive.

Alternatively, what is on Letter 6475? that is what the IRS should have sent you confirming the same amount.  WARNING - if you filed joint, there were 2 letters and you had to add the two letters together when TT prompted you for how much you received last year (this is the #1 error i see on these boards) 

[xmasbaby0]

@Traillens You have Forms mode if you are using desktop software.    Look for the recovery rebate credit on line 30 of your Form 1040.   If you already received the stimulus checks of $1400 per person your line 30 should be blank.

[AL2880]

So, why didn't TT calculate the ' hair cut '  I'm guessing I didn't see a note regarding the upper limits in AGI, but all along I'm expecting a refund. I could have deferred income to keep under the $75000 threshold, if the correct amount owed vs refundable had been displayed I'd have responded accordingly. Further TT didn't correct my stimulus calc until the IRS rejected the return.

[AL2880]

I just looking over the recov rebate cr doc, married jount is listed as 150,000.  So orig post has that error. & it appears Cr is proper. I'm confused.! & trying to get an answer from IRS is argghhh. u know.

[NCperson]

@AL2880 - I wonder if there is a misunderstanding on how this works -

you are eligible for the 3rd stimulus or the Recovery CRedit, but not both.  The rules on the 'haircut' were publically announced in March, 2021 by Congress and well circulated in the news so there was plenty of time all during 2021 to manage AGI as necessary.  

As I assume you are single, Line 30 (the Recovery Rebate Credit) is calculated as follows:

1) $1400, which is reduced on a straight-line basis if your AGI is between $75,000 and $80,000, If your income is over $80,000, you are not elgibile.

2)  LESS what you received last year,

3)  but not less than zero, meaning you do not have to return what you already received.  

How much did you tell TT you received for the 3rd stimulus?  THAT is the error I constantly see on these boards:   what was entered by the taxpayer when prompted by TT  does not match the IRS records of what it sent.  When that discrepancy occurs, the IRS is going to adjust your tax return to match its records.  They won't let you get more money than you are entitled to.  

if you provide the following, I can be more precise in what occurred:

1) what is on Line 30 of Form 1040

2) what is your AGI (this is an anonymous board, I only need precision if your AGI is between $75,000 and $80,000)

3) confirm it was just you on the tax return

4) what did you receive for the 3rd stimulus last spring (please review your bank account records, do not do from memory) 

What do you mean TT didn't adjust your stimulus until the IRS rejected your return.  If the IRS accepted your efile, they may have 'adjusted' your return, but they would not have 'rejected' it.  Once submitted, TT doesn't adjust anything. 

[NCperson]

@AL2880 - now I see you filed joint..... so let's review again.....here is the #1 error I see on these boards

1. The IRS sent you (and your spouse) Letter 6475 stating how much you received for the 3rd stimulus.  there were TWO letters and you were to add the two letters together when TT asked 'How much did YOU receive for the 3rd stimulus.  "You" means the two of you; the fact that there were really two letters made it confusing since I suspect the two letters were identical, except for the addressee and it could be one spouse didn't let the other spouse know there was another letter.
2. the 'haircut' for joint was between $150,000 and $160,000 on a straight line basis. 

If you answer my questions  from the prevoius post , i can explain more specifically what occured in your sitation, but I'll bet it's the amount you entered to reflect what you already received for the 3rd stimulus vs. what your bank account actually shows - that is the consistent error on EVERY SINGLE POST on these boards related to this subject. 

[cep1021]

I filed as a single person.  TT created the credit asking if I had received a rebate.  I said no but IRS said that I was not entitled to receive a rebate because my income exceeded their cut off.  TT should have addressed that by looking at  my total income to determine that I was not eligible for a rebate credit.  They will not admit to their mistake but there is something wrong in the TT program.

[VolvoGirl]

@cep1021  Did you get a letter listing like 5 reasons why they took off the Recovery Rebate Credit?

That is the list of generic reasons they give if they changed the Recovery rebate credit on line 30.  How much is on 1040 line 30?

Did you not get the 3rd Stimulus payment?  Or qualify for more?  Line 30 is only if you didn't get the full amount or qualify for more.  The IRS shows they already sent it to you.

A lot of people forgot they got the deposit last March - May 2021.  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...

[VolvoGirl]

@cep1021 Turbo Tax knows what your income is and won't give you the Recovery Rebate Credit if it is too high.  There is no problem with that.  Turbo Tax calculates it right.  If your income is too high you won't even get asked if you got the 3rd Stimulus payment.  Did you make more than these amounts?

Your credit amount will be reduced by the amount of your third Economic Impact Payment. It is then reduced if the adjusted gross income (AGI) amount on line 11 of your 2021 Form 1040 or Form 1040-SR is more than: 

• $150,000 if married and filing a joint return or filing as a qualifying widow or widower
• $112,500 if filing as head of household or
• $75,000 for all others.  

No credit is allowed when AGI is at least the following amount:

• $160,000 if married and filing a joint return or if filing as a qualifying widow or widower
• $120,000 if filing as head of household or
• $80,000 for all others.

[NCperson]

@cep1021 -  that IRS letter lists multiple reasons for the adjustment, but doesn't specifically state which one it is.  So while your AGI MAY be the reason for the adjustment, it is highly unlikely.  

what was your AGI (line 11 of Form 1040) ? unless it was above, $75,000, your income did not matter.

more likely, the issue is related to how much you received last year (check your bank statements between March and May, 2021) compared to what you entered into TT that you had already received. 

If those two numbers did not match (and the IRS knows what they direct deposited into your bank account), the IRS adjusted the difference.  

[JSPhoenix0609]

TT has an error in the software. Period.  NUMEROUS people having the same issue does not mean we all entered it wrong.  I have gone back over my return and ALL questions were answered CORRECTLY.  We did not receive the third stimulus payment and I entered the correct amount we did receive in TT.  TT showed a REFUND of $3200.  IRS sent letter we OWE $900......hopefully TT will look into this rather than assume we're all idiots and don't know how to file our taxes.

[NCperson]

@JSPhoenix0609-  with all due respect, I beg to differ.  Hear me out: the issue is one of two items:

1) The amount already received was entered incorrectly by the user.   You can confirm what you actually received by either a) reviewing your bank statement from March - May, 2021 OR b) reviewing Letter 6475 which you should have received from the IRS.  WARNING: if you filed 'joint', there were TWO letters and they needed to be added together before entering into TT.  This is the #1 error I see on these boards - not understanding there were two letters

2) the taxpaper legitamately did not receive the payment! But the problem is the IRS records indicate they sent it! The only recourse is for the taxpaper to prepare and submit this tracer form so the IRS can investigate. 

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

The calculation to determine the Recovery Rebate Credit is rather simple:  $1400 times the number of people listed on your tax return LESS what you already received.  (there is a phase out for upper income earners, but I'll leave that out for now).  So the ONLY two things that go wrong are a) the number of people listed on your tax return (unlikely) and the amount you already received (more likely).

So while you may think that numerous people having the same issue does not mean everyone entered it wrong, actually it does mean either those individuals entered it wrong (or it was never received).

If the calculation itself was wrong, why aren't even more people complaining (I used TT for my tax return and my Line 30 was correct! - how could that be if the calculation is wrong?) 

Most of the issues I see on these boards are people not correctly entering what was already received, especially those filing joint not realizng there were two letters that had to be added together!  Curious if that happened to you? 

does that help?

[Mark3657]

We filed our taxes and when the question was asked if we had already received our 3rd stimulus check I entered NO because I thought we had not received the 3rd Stimulus check in March of 2021, however after checking with our bank, we did receive the 3rd stimulus check.

Our refund was considerably lower than the Turbo Tax final results after our taxes.

How do we get this resolved??

Thank you,

Mark Minino

[NCperson]

@Mark3657 -  there is nothing to do.  The IRS has adjusted your refund to correct the error.

You should find that the correct entry for Line 30 of Form 1040 is the number you submitted on your tax return LESS the adjustment the IRS made. 

No amendment is necessary.

make sense?