HOW could you have possibly entered the stimulus as income ? Where could you have done it ? What line of the 1040 or Sch 1 is it even listed ?
Now more likely this is what you are referring to ....
Let me explain how stupid the placement of the stimulus question in the interview flow is …
Your 2020 return starts out by assuming you didn't get any Stimulus payment so it gives you the full amount of the credit based on your entered income and that is reflected in the Refund-O-Meter. Then near the end of the interview you enter how much you actually got in advance and the floating refund is adjusted accordingly so you don't get the credit twice. For instance if you already got $1200 then the refund being shown is reduced by the same $1200... this doesn't mean the stimulus is being taxed.
Check line 30. The Recovery rebate credit is on 1040 line 30. It either adds to your refund or reduced a tax due.
It would be nice if they would have asked for that information in the beginning in the MY INFO section BEFORE you entered in the income BUT the programmers did not ASK us posters in this forum AND they did not listen to us earlier and did not change the interview flow so I have been posting this information A LOT this year.
You are not paying tax on them and it is not deducting it from your refund or increasing the tax due. 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 to your real actual refund. 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 it's not being subtracted anywhere.
Check 1040 line 30. You should only have an amount there if you didn't get the full first 2 Stimulus payments of you qualify for more. Line 30 either reduces a tax due or increases your refund.
Someone asked me how my 1200.00 stimulus was entered on my return.
First was my income. 33k
Then further down it asked stimulus amount ..= 1200.
It then tallied my total income as 45k
And tax on that plus my unemployment etc was 3400..ish. no where am I seeing a deduction for the 1200.
And my tax due was 3400 ish paid 1600ish left me with 2226.00 owed.
I filed and paid 2000.oo in March.
Then the new law deduction of 10200 in unemployment which I figured..eh the extra 226 will come out in the wash..noo I got a bill from the IRS for 273. 226 plus interest and penalty. I should be getting back about 2050.00 per the turbo tax ammend worksheet which I didn't file..
So frustrated not being able to get answers.
Huh? What income line is the 1200 on? What line is 45k? Did you already get the 1200 Stimulus payment? The Stimulus amount should be only on line 30 (for the Recovery rebate credit) and only if you didn't get the first or second rounds or qualify for more. Line 30 is not adding into to income and is not taxable. Line 30 either adds to your refund or reduces a tax due.
I went back and looked at the return again. And I apologize for my error.
I added my work wages 33332.00
And the unemployment 16858.
This totalled the 49190.00
Of which I owed 3710.
I paid 1444 thru my work.
And sent in all I had which was 2000.00
The IRS is showing they got my 2000.00 the day after I filed.
My issue now is..my income based on the tax law deduction of 10200 of the 16858 in unemployment monies is less than the 49190..yet the IRS sent me a notice I owe still another 267 , 273 actual based on interest and penalties..basically hasn't corrected my return yet? The computer said I owe this based on 49190 minus what I paid of the 2226.00 original taxes when I filed. UG..sorry to be a "whiner" and so sorry for the misunderstanding on the 1200..if I'd used a calculator I'd caught that. My bad. Since covid I now work 2 jobs 7 days a week tryin to recover!
Ok ... so what you have is the original return has been processed however they have not recalculated the return for the unemployment exclusion yet ... this make take a while longer to happen. So you can call the number on the notice and explain that you will not owe once the correction is made and in fact they will owe you so ask for the balance due to be put on hold until the IRS completes the correction.