3 Stimulus' and deductions and AGI

[confusedrf]

I am doing my mother-in-law taxes. My wife says she has gotten none of the 3 stimulus' so far.  It seems each have been based on AGI. ..I think???  I am confused as to how AGI is calculated.

Her circumstance is simple.

She had to cash out an investment in 2019 and again in 2020. 80K each year. She has minimal SS on top of that. Now that sounds like she is living the high life. However she requires 24/7 in home care..untill her $$$$ run out. Then she must go to a home. 

So I believe her taxable  income after deducting 50K medical expenses and her real estate tax is somewhere in the neighborhood of 35 - 40K.

So her gross income is in the 90's. Her adjusted income is in the mid 30's - 40's.

What is the AGI?  I would have though it was the 30s - 40's  number.  I will look at her old return this evening.

Does it make sense she got no stimulus?

[DanaB27]

You can find the AGI on the 2019 return on line 8b and on the 2020 return on line 11.

If your mom didn’t get your full first and second stimulus payments, she may be eligible to claim the Recovery Rebate Credit on your 2020 tax return.

Your credit amount will be reduced if your 2020 adjusted gross income (AGI) is more than: 

• $150,000 if married and filing a joint return or filing as a qualifying widow or widower
• $112,500 if filing as head of household or
• $75,000 for eligible individuals filing as a single or as married filing separately.  

Your payment will be reduced by 5% of the amount by which your AGI exceeds the applicable threshold above. (IRS FAQ Recovery Rebate Credit )

For the third stimulus payment:

• If you have an adjusted gross income (AGI) under $75,000 ($150,000 married filing jointly), you will be eligible for the full $1,400 stimulus payment.  
• Payments will begin to be reduced for individuals making $75,000 or above in AGI ($150,000 for married filing jointly.)
• Once your AGI reaches $80,000 for individuals ($160,000 married filing jointly) you will be ineligible for a payment.

[NCperson]

@confusedrf , further to @DanaB27 answer, the Recovery Credits are based on 'adjusted gross income'

- look at lines 1-10 leading up to the AGI on line 11 and you will note the items that are part of GROSS income, it is before either the standard or itemized deduction which would yield 'taxable' income

[confusedrf]

Okay then I guess she is not entitled to it. Funny some folks get this who didn't really need it. My mother in law looks like she doesn't need it on paper but in fact of the $90,000 she made after it deducting all her expenses she's left with 40 but she still doesn't get it. I just needed confirmation on this. I was not sure exactly what AGI meant. I assumed falsely that it was your taxable amount.

[confusedrf]

So I believe her adjusted income for 2020 will show above $80,000 so she will not be entitled to anything. I also believe her 2018 and 2019 showed about $90,000. Should she have qualified for anything for stimulus 1 and 2... I don't remember what the rules were for the first two stimulus.  You mentioned 5% but how would that work. Again let's just assume she had $90,000 in 2018 $90,000 in 2019 and 90,000 in 2020?

[xmasbaby0]

The first two checks are based on 2020 income.   Even though the IRS used 2018 or 2019 returns to get those first checks out in a hurry--when you are using the recovery rebate credit on a 2020 return---the 2020 income is the controlling factor.   The IRS will not go backwards now and use 2018 or 2019 to give someone the 1st or 2ns check.   And there is no place on a 2020 return to enter anything about the 3rd stimulus check, which is a separate check.

Per the IRS the criteria for the recovery rebate credit on a 2020 return:

A1. Generally, if you are a U.S. citizen or U.S. resident alien, you will receive an Economic Impact Payment of $1,200  ($2,400  for a joint return) if you (and your spouse if filing a joint return)  are not a dependent of another taxpayer and have a Social Security number valid for employment and your adjusted gross income (AGI) does not exceed:

• $150,000  if married and filing a joint return
• $112,500 if filing as  head of household or
• $75,000  for eligible individuals using any other filing status
  Your payment will be reduced by 5% of  the amount by which your AGI exceeds the applicable threshold above.

You are not eligible for a payment if any of the following apply to you:

• You may be claimed as a dependent on another taxpayer’s return (for example, a child or student who may be claimed on a parent’s return or a dependent parent who may be claimed on an adult child’s return).
• You do not have a Social Security number that is valid for employment.
• You are a nonresident alien.
  The following are also not eligible: a deceased individual or an estate or trust.

[VolvoGirl]

For Single 75,000 AGI is the limit to get the full amount.  Then it phases out over 75,000 - 99,000.  99,000 is the max.

There is a 5% phaseout if you are over certain AGI.  Here is a IRS pdf chart

https://www.irs.gov/pub/irs-utl/how_do_I_calculate_my_eip.pdf

[NCperson]

The formula is $1200 LESS the 5% haircut for the portion over $75,000 LESS what was received for the 1st stimulus, but not less than $-0-.  So she is eligible for $950 less what was already received.

The formula is $600 LESS the 5% haircut for the portion over $75,000 LESS what was received for the 2nd stimulus, but not less than $-0-.   So she is eligible for $350 less what was already received.

For the 3rd stimulus payment, filing single, the stimulus payment is $1400 LESS a haircut of 28% (yes, 28%) for the portion over $75,000 which means there is no stimulus if your AGI is $80,000 or higher on your 2020 tax return (and if that is not available, then your 2019 tax return). So she is not eligible at all. 

[confusedrf]

Thanks I think I understand why she gets nothing for 2020. I do not think she got anything for 2019 IE the first two stimulus's... However I'm going to try to find out for my wife if that is true. I'm going to get her exact a AGIS for 18 , 19 and 20 and post them here.. Something's not making sense... Let me get some more exact numbers and I'll be back later.

Thank you all.

[NCperson]

see page 59 - this is how the IRS (and TT) calculates the Recovery Rebates) 

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

read my post again, everything is based on 2020 AGI, filing status and dependents under the age of 17  LESS what has been received to date!!!!

2018 and 2019 AGIs, filing status and dependents DO NOT MATTER!!!!!!!!

[VolvoGirl]

Forget about 2018 and 2019.  Those were just used to send you the first 2 Stimulus payments in advance of 2020.

If you did not get one or both of the first 2 Stimulus payments you can claim the missing amounts on your 2020 return.  It will be listed on your 1040 return on line 30.  Check there for it.  It either adds to your refund or reduces a tax due.

Don't worry about the new 2021 3rd one yet.  Only the first 2 get reconciled on the 2020 return.

[confusedrf]

Well I guess I have to find out for my wife if she got anything for the first two.

Are you saying I can pretend she got nothing and TurboTax will tell me what she should have got?

[VolvoGirl]

Yes, but if you file with the amounts on line 30 and she did get some the IRS will take it off and reduce the refund or send you a bill.  You might be able to look up her EIP payments at the IRS and see if they sent her any.  I did for my father in law.  They got the first 2,400 check.  Then mother died in Oct 2020 and father only got the second 600 check.  But on their Joint return they got her second 600 even though she passed before it came out.

[NCperson]

<<Are you saying I can pretend she got nothing and TurboTax will tell me what she should have got?>>

No! suggest looking in your checking account activity for the direct deposit or deposit of the check.. First was was March / April, 2020 and the 2nd one was January, 2021.  

I am just saying that what your AGI was on your 2018 and 2019 tax return is not important; what you are due now is based on your 2020 tax return LESS what you received, so what you received is important, but how it was calculated is not important.  

if you overstate Line 30 (which can occur by understating EIP1 or EIP2), then that could severely delay your refund while the IRS figures out the correct number.  I wouldn't do it this way

ps if you understate Line 30 (which can occur by overstating EIP1 and EIP2), it requires an amendment to get it corrected; the IRS isn't going to lift a finger to figure it out for you! 

[confusedrf]

Sorry if I find this confusing.

It feels like you're saying my 20/20 return and the AGI they're in is a sole determination of how much he should get for each of the three stimulus payments if any.

Did she receive any stimulus? I spoke with my wife and she seems to recall her getting some kind of debit card with maybe $250 on it. My mother-in-law is not well so now we have to find the card and double check it... it probably has a pin that may complicate things.

Anyway what I can tell you is her AGI for 2021 is 96,011.

Her husband is deceased she has no dependence she's single and files as single.

If anyone cares to speculate as to what her three individual stimulus payments would have been ...if any ...I'd love to know.

Once we figure out what was on the card I'll report back.

Thanks everyone I appreciate your time. It's actually a sad time for us as mom is not doing very well.