Is there an error in the "Recovery rebate credit worksheet"?

[230evans]

Ok so I had my tax return flagged for the rebate recovery error and it took months to finally have it processed. The IRS sent a refund notifying this was the delay in the processing and reduced the refund based on the recovery rebate credit. 
now o have a letter telling me that I didn’t pay. And I have to appeal it be charged and it will go to collections. Has anyone else had this issue? 

I have been trying to call to discuss but can never get through and frankly don’t believe i will within the 60 days they give you a from the notice. 

[flemming]

Is there an error in Recovery worksheet?   YES !!    TurboTax is wrong,  IRS is correct.

Not much you can do about it, 'move on'; accept the end result of lower than TT computed

rebate.

[april30me]

My AGI on my 2020 taxes was $43,369.  My base income was $37,643 and my taxbable income was $5,726.

I received a letter stating that my AGI was over $75,000. which is not correct.

Can we take a look at the claimed Recovery Rebate Credit?  Something is not correct.

[flemming]

Sounds like your issue might be other than on Recovery rebate credit worksheet

[xmasbaby0]

@april30me Did you get a letter that listed several possible reasons for a reduced refund because of the recovery rebate credit?   A LOT of people have received those letters.

https://finance.yahoo.com/news/got-irs-math-error-letter-152411992.html?fr=sycsrp_catchall

TurboTax has no way to know whether you received the 1st and/or 2nd EIP payments.   When you prepared your tax return you were asked in the Federal Review section if you had received those payments.   If you said you did not receive the payment(s) then the stimulus payment was put on line 30 of your tax return as a recovery rebate credit.  The IRS cross checks every return with an amount on line 30.  If the IRS sees that they already issued the EIP payment(s) to you then they adjust your refund.

Check your IRS account---does the IRS say they sent you a payment that you did not receive? (If you filed a joint return you need to check for both spouses.)   If so you can ask for a trace to be put on the payment.

https://www.irs.gov/payments/view-your-tax-account

If you were issued a payment and have not received it, see How do I request a payment trace to track my first or second Economic Impact Payments?

[lgkinney1]

Your assumption fails to address the issue at hand. Turbo Tax has a responsibility to ask  whether the filer received either one or both rebates. In fact, they should have taken it a step further. In my case, like others on this board, I didn't qualify. Turbo Tax is responsible for the worksheet calculations and they screwed up royally. Worse, they won't fess up to their errors. 

[VolvoGirl]

Turbo Tax does ask if you got the 2 Stimulus payments.   Then you have to enter the amount you got in each box 1&2  for them.  Did you enter the amounts you received for each one in the right boxes?

[xmasbaby0]

@lgkinney1 Did you skip the Federal Review section where you were asked about the EIP payments?   You were supposed to answer questions about the 1st and 2nd EIP payments you received.

[Kristinelj]

This! 🙌 With so many people sharing the same issue it should be evident that there is fault on their part. I have been using turbo Tax for years and have never had an issue. Now I’m suddenly in the same boat as many others with this error.

[acwebtdx]

I just got off the phone with the IRS, who confirmed the Recovery Rebate Credit was inappropriately claimed as we were above the AGI, causing us to go from a refund to owing.  The calculation is actually quite clear in the IRS paperwork, so the error lies in the TT software, which failed to note that there was an AGI ceiling before applying the Recovery Rebate Credit.  If not a deliberate error, then definitely poorly crafted to not follow specific IRS guidance.  TT should note the error to users and promise corrections. I am disappointed TT is not acknowledging the error and compensating users. 

[DoninGA]

---

@acwebtdx wrote:

I just got off the phone with the IRS, who confirmed the Recovery Rebate Credit was inappropriately claimed as we were above the AGI, causing us to go from a refund to owing.  The calculation is actually quite clear in the IRS paperwork, so the error lies in the TT software, which failed to note that there was an AGI ceiling before applying the Recovery Rebate Credit.  If not a deliberate error, then definitely poorly crafted to not follow specific IRS guidance.  TT should note the error to users and promise corrections. I am disappointed TT is not acknowledging the error and compensating users. 

---

The Recovery Rebate Credit Worksheet in the TurboTax software is exactly the same as the worksheet in the IRS Form 1040 Instructions on page 59 - https://www.irs.gov/pub/irs-pdf/i1040gi.pdf#page=59

What was your 2020 AGI?

If you were filing as Married Filing Jointly the Recovery Rebate Credit will be reduced when your AGI is more than $150,000.  The credit will be eliminated if the AGI is $197,990 or greater.  If your AGI was at or above the phase out amount the question for receiving the stimulus payments would not have even been presented in the TurboTax interview.

The letter from the IRS probably is stating that you indicated on our 2020 federal tax return that you did NOT receive a stimulus payment and therefor the amount that you did not receive was entered on the Form 1040 Line 30 as a Recovery Rebate Credit.

However, the IRS removed the credit from your tax return because the IRS shows that the stimulus payment was sent to you.  By removing the credit this reduces your federal tax refund or increases the taxes owed.

Go to the IRS website for your tax account to see what the IRS has sent to you for stimulus payments - https://www.irs.gov/payments/view-your-tax-account

If you never received the stimulus payment shown on your account then have the IRS put a trace on the payment.  Go to this IRS website for how to start a trace - https://www.irs.gov/newsroom/questions-and-answers-about-the-first-economic-impact-payment-topic-f-p...

[lgkinney1]

As the previous user stated, the error lies in the Turbo Tax Software, not in the form. 

[april30me]

I did get $600 on January 1 2021, so I reported it on line 30 when I filed my 2020 taxes.

My AGI is only at $43,369.

The letter that I received said I would not qualify for another stimulus because I made over $75,000, but that is not correct.

I have never received another stimulus payment because of this error.

How can this be fixed because my income is not that high.

Thank you

[xmasbaby0]

@april30me What stimulus did you not receive?   There have been three-----the first one was in 2020 and was $1200 for adults and $500 for dependents under the age of 17; the second one which was sent in late 2020 or early 2021 was $600 for each adult and each dependent under 17; the third one was in 2021 and was for $1400 for each adult and each dependent.

Sounds like you got the first and second ones.  There was no place to enter anything on your 2020 tax return about the third stimulus check.   If you did not receive that one:

  The IRS is issuing 3rd stimulus checks on its own timetable.

You can use the IRS Get My Payment site to see what is expected for your 3rd stimulus check:

https://www.irs.gov/coronavirus/get-my-payment

https://www.irs.gov/coronavirus/get-my-payment-frequently-asked-questions

[VolvoGirl]

@april30me   Was the $600 on line 30?  It should not be there.  Line 30 is only if you didn't get the full amount for the first 2 stimulus checks or qualify for more.  You did get the $600 so the IRS took it off your return because you tried to claim it again.  

And that is just one of the generic reasons why they adjusted the Recovery Rebate Credit on your return. See this IRS article
https://www.irs.gov/newsroom/irs-letters-explain-why-some-2020-recovery-rebate-credits-are-different...