@JSPhoenix0609 - let's be sure we both agree on what constitutes the '3rd stimulus'
Stimulus 1 was the summer of 2020 and Stimulus 2 was January of 2021. Both were reconciled as part of the 2020 tax return so nothing further required to be discussed here.
Stimulus 3 (EIP3) was issued in March - May, 2021 and was $1400 per person. THAT is was we are discussing. On the 2021 tax return you were eligible for Recovery Rebate Credits LESS what you had already received for the 3rd stimulus
You state you received the $4200 "for the first payment" but then you state you did not receive the THIRD stimulus payment.... this is the same payment!!
If you received the $4200 back in the March - May, 2021 timeframe, then the answer in TT to the question whether you had received the 3rd stimulus (or words to that effect) should have been 'yes'. There should have been Letter 6475 received from the IRS confirming the amoubnt they sent (2 letters - one for each spouse). If the response to whether the money had been received had been 'yes' then Line 30 would have been zero and the rerfund would have been $4200 less (or the tax due would have been $4200 higher)
Unfortunately, the IRS adjustment is correct. Suggest going back and reviewing the wording of the questions in the Federal Review section of Turbo Tax related to the stimulus payment......
