Once I add what I have received in stimulus checks it makes my federal refund decrease. Why? I thought this was not suppose to impact my income?

Forum|Forum|5 years ago
February 4, 2021
2 replies
12 views

How does this get fixed?

TurboTax Free Edition Online

DMarkM1

Level 15

The entire amount of the Recovery Rebate Credit that you are eligible for is added to your return initially. After that when you input stimulus payment amounts you have already received, the credit is reduced accordingly on your return.

The reduction will never be more than the credit you are eligible for. You can test this by putting in stimulus amounts above what you are eligible for. You will see the reduction stops at the credit amount.

To recap the eligibility amounts:

Round one: $1200 (2400 if filed jointly) plus $500 for each dependent age 16 or under.

Round two: $600 (1200 if filed jointly) plus $600 for each dependent age 16 or under.

Here is a link with more information on the Recovery Rebate Credit.

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SocMO

Level 2

I have the same question. Doing a early assessment of my 2020 taxes, basic taxed owed was about $250, when I added both stimulus amounts (1st @ $2300 2nd @ $1100), my taxed owed jumped to $3614!! Here again, we, according to the stimulus program this distribution was to be untaxed as income, but it's being taxed as income otherwise I wouldn't see such a significant jump in now owing. So either we were lied to or TurboTax has a glitch in this programming. please explain.

DoninGA

Level 15

@SocMO wrote:

I have the same question. Doing a early assessment of my 2020 taxes, basic taxed owed was about $250, when I added both stimulus amounts (1st @ $2300 2nd @ $1100), my taxed owed jumped to $3614!! Here again, we, according to the stimulus program this distribution was to be untaxed as income, but it's being taxed as income otherwise I wouldn't see such a significant jump in now owing. So either we were lied to or TurboTax has a glitch in this programming. please explain.

I have seen this same issue from a few other users. This is not systemic problem but local to just a few.

First, check your actual federal tax return Form 1040 and look at several lines on the form.

You can view your Form 1040 at any time. Click on Tax Tools on the left side of the screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

Line 30 is where stimulus payment you did NOT receive are entered as a tax credit. What is shown on Line 30?

Line 9 is your Total Income. Is the amount on Line 9 correct?

Line 15 is your Taxable Income. What is the amount shown?

Line 16 is the Tax on your Taxable income.

Line 24 is your Total Tax. What is the amount shown?

Line 33 is your Total Tax Payments. What is the amount shown?

Line 34 is your Federal Tax Refund

Line 37 is your Federal Taxes Owed

What amounts are shown for either the tax refund or the taxes owed?