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

[VolvoGirl]

@jimmurrieta   Have you filed yet?  If not,

To get to the stimulus questions in TurboTax at any time, you can search for stimulus or recovery rebate credit then hit ENTER and there should be a Jump to link

If you are trying to trigger it,

Click on Other Tax Situations at top

Click on Let's get started

Answer some questions then Continue

Then click on Let's keep going

Next screen is for the Third Stimulus, if you qualify

[vb897us]

Sounds similar to my experience.  I only received notification from IRS for tax year 2020 this week.  The amount owed is the the credit turbo tax calculated on line 21 of recovery rebate credit worksheet plus interest.  The amount that I entered for my EIP1 is correct as it matches the amount displayed on IRS web site.

I tried calling IRS but could not get through either, so will just pay the owed amount.

[JamesG1]

"EIP1 is correct as it matches the amount displayed on the IRS website'' means that the IRS is reporting this amount on your online account or your tax transcript?  Or does it mean something else?  Please clarify.

EIP1 and EIP2 were reconciled on the 2020 Federal 1040 income tax return page 59 here.

@vb897us

[vb897us]

IRS is reporting the EIP1 value on my IRS online account, under Tax Records section (Economic Impact Payment Information).

 I'm pointing that out as some are blaming the users for entering an incorrect amount, which is not the issue in my case.  I did not receive a EIP2 check.

Since my first post today,  I visited the IRS site and reviewed the IRS Form,  https://www.irs.gov/pub/irs-prior/i1040gi--2020.pdf, page 59.  "Recovery Rebate Credit Worksheet—Line 30"

I followed the steps on that page and my recover rebate credit matches the one calculated by turbo tax. 

So why does the IRS believe I do not deserve this credit?  

[xmasbaby0]

@vb897us The only EIP payment you could seek to receive on your 2021 return was the 3rd EIP payment ---the one for $1400 per person.   There is no place on a 2021 return to enter anything about the 1st or 2nd EIP payment.  The recovery rebate credit on your 2021 return is only for the 3rd one.

If you did not receive one of the payments and the IRS says you did receive it, you can have it traced.

LOST 1st or 2nd  STIMULUS CHECK

Q F1. I received my payment by check, but it was lost, stolen or destroyed. How do I get a new one? ...

A1. If you received your payment by check and it was lost, stolen or destroyed, you may need to request a payment trace so the IRS can determine if your payment was cashed. See How do I request a payment trace to track my first or second Economic Impact Payments?

If a trace is initiated and the IRS determines that the check wasn’t cashed, the IRS will credit your account for that payment, but the IRS cannot reissue your payment.

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?

LOST THIRD STIMULUS CHECK

https://www.irs.gov/newsroom/questions-and-answers-about-the-third-economic-impact-payment-topic-j-p...

The first EIP --or stimulus check--- was issued in 2020  It was for $1200 for adults and $500 for a dependent under the age of 17.   The IRS used information from either your 2019 or 2020 tax return to issue those checks so they could send them out in a hurry.

The 2nd EIP or stimulus was issued in late 2020 or early 2021 and was $600 for adults and $600 for dependents under age 17.

If you did not receive the 1st and/or 2nd stimulus check you can get it by filing a 2020 tax return and using the recovery rebate credit in Federal Review.   It will end up on line 30 of a 2020 tax return and will be added to your refund (or reduce your tax due).

The 3rd EIP--or stimulus check-- was sent out in mid-March or later in 2021 and was for $1400 per person--adults and dependents no age limit.

If you did not get the 3rd EIP payment you can get it by filing a 2021 tax return and using the recovery rebate credit in Federal Review.   The credit will go on line 30 of your Form 1040 and will add to your refund (or reduce your tax due).

[BryWil]

I did the Recovery Rebate Credit worksheet for my 2020 taxes and it showed an amount that we might qualify for but we received a letter from the IRS this year stating they had corrected our return and we would not be receiving that money.  I now get that our income took us out of getting this money and the number they showed under their calculations and our calculations were identical so no real changes were made to our return other than canceling that amount to be paid to us. My question is, do I need to go back to our 2020 return and delete that worksheet before importing into our 2021 return so if doesn't show us getting that money that we didn't actually get?

[DMarkM1]

No.  That is not necessary.  The Recovery Rebate Credit is not a transfering item from your prior year taxes.  It will have no effect on your current year return.

[VolvoGirl]

You only enter the 3rd Stimulus payment on your 2021 return.  Did you get letter 6475 saying how much they sent you?  If you are married you should each get letter 6475 for half.   But you need to enter the total into Turbo Tax. 

EIP3 The 3rd Stimulus payment started going out in March 2021 and is for 1,400 for each person listed on your tax return, no age limit. The IRS used your 2020 (or 2019) return to send the checks out fast. If your 2021 return changes and you qualify for more you can claim the extra as the Recovery Rebate Credit on 1040 line 30. But line 30 is only if you didn't get the full amount or qualify for more. Not the amount you already got. The IRS also sent out letter 6475 to tell you how much they sent you . If you are married then each spouse should get a letter for half.  

[BryWil]

Thank you very much for your reply!  So just to clarify,  even though it shows me getting a small amount of money back it is handled differently than an actual overpayment/refund that won't transfer over?  Thanks for easing my mind!

[AmyC]

Right, only information related to preparing this year's return will carryover. Since the prior 2020 stimulus checks are not related to this year, they would not transfer over.

@BryWil

[BryWil]

Thank you!! Have a great week!

[lmg0122]

I ran into a similar issue.  When asked if I received the 3rd stimulus (which I didn't) I chose NO and then all of a sudden I went for owing 200 some dollars I had a refund of over 3000.  I reviewed my taxes over and filed and now I got a letter from the IRS that I miscalcuated the Recovery rebate credit and now I owe again.  I am actually eligible.  I have been trying to get through to them on the phone with no avail.  I am trying to figure out if there is a miscalculation or bug in the 2021 software.

Lisa - WI

[JamesG1]

You did not receive the third stimulus payment and reported that on your 2021 Federal 1040 tax return.  Your tax return was electronically filed, accepted by the IRS but the IRS reduced your refund by the amount of the Recovery Rebate Credit.

It sounds like the IRS may think that you were already issued the third stimulus payment.

At your IRS online account, you can find whether a payment was issued to you that you did not receive.  You can also find this information on your tax transcript.

If you need to trace a payment that the IRS says has been issued to you, mail or fax a completed IRS Form 3911, Taxpayer Statement Regarding Refund.

The qualifications for the third stimulus payment are:

• you were a U.S. citizen or U.S. resident alien in 2021, 
• you were not a dependent of another taxpayer’s 2020 tax return, and 
• you have a Social Security number.

There are income limitations are if your 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 if filing as a single or as married filing separately.

@lmg0122

[VolvoGirl]

Double check your bank statements and Check your IRS account (both accounts if married)

Your Online Account | Internal Revenue Service

If the IRS thinks they sent it to you but you didn't get it request a trace for a missing third Stimulus payment

https://www.irs.gov/newsroom/questions-and-answers-about-the-third-economic-impact-payment-topic-j-p...

[lmg0122]

Thank you for those facts.  Yes, I will setup an online IRS account since I filed a married filing jointly return and our income was below 90,000 and we did not get the 3rd stimulus.  I checked my bank records for the past year.  I appreciate your expertise!