My family member who filed "independently" for 2020, received the $1400 in 2021 and got a letter. This tax year (2021), that same person will be a "dependent" on my tax return. I and the rest of my family got no other stimulus payments and have received no other letters.
I am married filing joint for 2021, with 2 dependents; one of those dependents is the person who got the $1400 (above) in 2021.
Turbotax wants to give me $5600 credit ($1400 for each of us) but since the one (new) dependent already got their $1400, I entered that into a box as an offset, so the net credit I get shows as $4200 (the other 3 * $1400). I think that's the way I will file.
However, the IRS Q&A on the "2021 Recovery Rebate Credit - Topic E: Calculating the 2021 Recovery Rebate Credit" is confusing (surprise!).
On Q15, it says (paraphrased), "include only the third EIP amounts issued to you (and spouse if filing joint). DO NOT INCLUDE THIRD EIP AMOUNTS ISSUED TO ANYONE ELSE, EVEN IF THEIR PAYMENTS INCLUDED AMOUNTS FOR AN INDIVIDUAL WHO IS YOUR QUALIFYING DEPENDENT FOR 2021."
On Q16, it says (to the former independent person who is now dependent) "YOU ALSO CAN'T CLAIM THE 2021 RECOVRY REBATE CREDIT" [.... But, what if you are not trying to claim it because you ALREADY got it!?]
And Q17 adds another slight spin......
https://www.irs.gov/newsroom/2021-recovery-rebate-credit-topic-e-calculating-the-2021-recovery-rebat...
Bottom line: I'm trying to "report" the actual receipts, not get any new credits that I'm not entitled to. I just want to reconcile it correctly, but the TurboTax software is very confusing and the IRS instructions are not clear.
Again, Turbotax wants to give me $5600 credit ($1400 for each of us) but since the one (new) dependent already got their $1400, I entered that into a box as an offset, so the net credit I get now shows as $4200 (the other 3 * $1400). I think that's the way I will file.
Comments?
