The $1,800 stimulus I received was deducted from my tax return once I selected that I received the payments. The government said this would not happen. What is going on?

[CatinaT1]

Before you enter the amount of the stimulus payments at the screen Did you get a stimulus payment?, you have been given the full Rebate Recovery Credit (the equivalent of the two stimulus payments) as part of your refund.   This can be found on line 30 of the 2020 Federal tax return.  At this point, this is an 'incomplete' Rebate Recovery Credit. 

The refund monitor on your screen displays a refund amount that includes the stimulus money as part of your 2020 refund.   When you enter the amount of stimulus you received, the refund monitor adjusts to account for this. 

  

See this TurboTax Help. 

  

This TurboTax Help states that the Economic Impact Payments (both the first and second) are not considered income, and therefore are not taxable. 

[VolvoGirl]

You are not paying tax on them and they are not deducted from your refund. Turbo Tax started out by assuming you didn't get it and giving you credit for the whole amount so your refund was too high to begin with. Then when you entered what you already got the starting refund was reduced or the tax due increased. Otherwise you would be getting the Stimulus amount again on your tax return.

Look at your return. The Stimulus payments do not show up anywhere as taxable income so you are not being taxed on it. And they are not being subtracted anywhere on your return.