4000 dollars deducted from refund because 3rd stimulus check?

[jarebowski82]

I seem to remember not being hit on my returns last year when first two stimulus checks rolled in. It did not take off how much we would get back in the slightest. So now because what was called a 3rd stimulus came and was accepted now my refund will be 4000 plus less because I took a stimulus that had no option to refuse if I recall which easily would of done if known during refund season it would chop off my return. What gives?

[xmasbaby0]

You cannot get the same stimulus check twice.   When you start putting in your information, the software does not know that you already received the stimulus check so it shows you a refund amount that includes that stimulus as part of your refund.   But you have to go to the Federal Review section before you file and if you already received that 3rd EIP payment ----you MUST answer the questions and say that you received it.   Then your "refund" will drop because you cannot get that EIP again.   Watch line 30 of your Form 1040.   If you are getting a stimulus payment that is where it will be shown.

If you answer the questions incorrectly as to whether you received the 3rd EIP payment, you can expect a long delay while the IRS cross checks and re-calculates your refund.

If you cannot remember whether you received the EIP payments then check your online account:

https://www.irs.gov/payments/your-online-account

[MayaD]

Your refund didn't go down because you took the stimulus. 

when you start working on your return, TurboTax assumes that you haven't received stimulus payment, so it begins giving you the maximum amount.

When you enter the actual amount received, it adjusts your refund to account for that.

The IRS will send Letter 6475 to the address they have on file for you confirming the total amount of your third stimulus Payment and any plus-up payments you received. You will need this information to accurately calculate your Recovery Rebate Credit when you file your 2021 federal tax return. 

[Deniso]

I am in the same exact situation. The IRS says it was a "gift" and you wont have to pay taxes on it or even claim it. But if you don't have to pay taxes on it,  or claim it, why does TurboTax change the amount? The difference between what I would receive from a refund to what I owe is exactly the Third stimulus amount. I am very confused.

[xmasbaby0]

The "refund monitor" starts off by giving your all of the stimulus money and all of the child tax credit because the software does not know yet that you received stimulus money or that you received some advance child tax credit payments.    That gets reconciled later.

That "refund monitor" changes as you enter information.      That is normal.   And you cannot take it seriously until you enter ALL of your information---even though it is so tempting to believe that the highest amount is the "right" refund.

[Critter-3]

@Deniso 

Read the other posts in this thread ... the program interview starts off by  putting the full amount of the third stimulus credit  in your refund shown at the beginning of the program and at the end when you say you already got the full payment the refund is reduced by that very amount.   You are not being taxed or penalized on that payment  ... you are simply not allowed to get the payment twice.   This is not the most user friendly way to complete this situation ... it would be better for the program to not assume you did not get the payment and only add the credit later if you didn't however the programmers didn't think this thru very well again this year.