The stimulus payment is NOT being taxed and you cannot get both the advance and the credit ... the method the program uses of giving you the credit then taking is back is not the most user friendly and can be confusing ...
The computation of the Recovery Rebate Credit is a two-step process. You are able to observe what is happening at each step on line 30 of your Federal 1040.
Early in the program, TurboTax software computes whether you qualify for the $1,400 third stimulus check and gives you immediate credit for the third stimulus check.
You are able to view this Recovery Rebate Credit on line 30 of the Federal 1040 under Tax Tools / Tools / View Tax Summary / Preview my 1040.
You enter the third stimulus check actually received at the screen Let's double-check the amount you received.
Then the Recovery Rebate Credit on line 30 becomes $0. You may also view this under Tax Tools / Tools / View Tax Summary / Preview my 1040.
