My wife and I didn't receive stimulus payments, as our AGI was above the limit. However, TT's RRC worksheet calculated that we could take a credit on our return, based on the following entries in the worksheet:
- Line 7 = $2400
- Line 10 = $1200
- Line 11 = [an amount > $150000]
- Line 13 = [Line 11] - $150000
- Line 14 = 5% of Line 13 (this amount is less than the $2400 in Line 7)
- Line 15 = [Line 7] - [Line 14]
The amount on Line 15 was entered on Line 30 of our 1040-SR as a credit. The IRS's Notice CP11 says that we shouldn't have taken that credit.
Everything I read in TT and IRS literature implies that the stimulus payments were an advance on a 2020 tax credit. There was no indication that the credit had an income ceiling, only that the advance did. Our AGI wasn't far enough over the limit to completely offset the (not-advanced) amount of $2400, so we took the difference as a credit, which the IRS negated.
Am I reading this wrong? If so, why didn't TT know how to skip the RRC worksheet? And why doesn't the documentation from either TT or IRS make this even slightly clear? It seems to me that -- if taking the credit is improper -- the error was TurboTax's, not ours.
