@taxjamakarlo - if it's 'fairness' you are complaining about, then please write your Congressman. I don't write that to be sarcastic or in jest, but that is the way the law was passed. Congress decided these rules
The 1st two stimulus payments were 'advances on 2020 tax return' meaning EVERYTHING was based on the 2020 tax return results. If you were strategic about it and understood the rules (most of us didn't at the time!), you could have delayed the rollover that created the taxable event so that the stimulus was secure.
The IRS was authorized by Congress to use 2019 (and if not available 20180 to ESTIMATE the expectations of the 2020 tax return. On that basis, they issued the 1st two stimulus payments,
Then, 23 all completed our 2020 tax return and that is what the stimulus is ACTUALLY based on.
if the ACTUAL is more than the ESTIMATE, that difference is what creates the Recovery Credit on line 30
if the ESTIMATE is more than the ACTUAL, you don't have to pay it back and Line 30 is zero. the law states you don't have to pay it back. So if you income was low in 2019 but high in 2020, you probably received the 1st two stimulus payments and there is no requirement to pay it back
does that help at all?
