Question about tax credits for stimulus 2020/2021

[khurram]

Hello. This is sort of an offshoot of my earlier question here: https://ttlc.intuit.com/community/taxes/discussion/re-file-jointly-if-my-wife-was-not-in-the-us-duri...

But you don't really have to go read that to answer this. Long story short, my tax filing status is changing from non-resident alien to resident alien this year. Plus I also got married in 2021 -- so i am filing jointly with my wife. For completeness, my wife was not present in the US during 2021 and she doesn't have an SSN/ITIN. We are applying for her ITIN along with the federal tax.

My question is that when i got to the tax credits part of the turbo tax questions, i answered no to the question about receiving the 3rd stimulus check. I did not receive it because i was a non-resident alien in the last year tax return. Based on this answer turbotax added 2800 to my tax refund -- 1400 for each. Now i do understand that i qualify for that credit but i am not sure if my wife does. One she was not in the US and two she does not have a SSN (we are applying for her ITIN as i mentioned before). Is this a mistake on turbotax's part or should i send it in as it is and IRS will simply deny her credit part of the refund?

A related question is: can i also retrospectively claim the 2020 tax credits now that I am a resident alien by filing an amended 2020 tax return OR is that not how it works?

Thanks for your help and time!

[DawnC]

You can't change your 2020 return - your resident status was not effective that year.   

Generally, someone was eligible for the full amount of the third Economic Impact Payment if they:

• are a U.S. citizen or U.S. resident alien (and their spouse if filing a joint return), and
• are not a dependent of another taxpayer, and
• had adjusted gross income (AGI) that is not more than:
  • $150,000 if married and filing a joint return or if filing as a qualifying widow or widower
  • $112,500 if filing as head of household or
  • $75,000 for any other filing status

[khurram]

Thanks for your response. From your response, it seems like if we do file jointly (in which case she too will be treated as a resident alien for tax purposes), then we both would get tax credit for the third stimulus check. 

[DMarkM1]

Yes, you are correct.  According to this IRS FAQ question C1: 

You are eligible for the Recovery Rebate Credit if you file a joint return with your spouse, you or your spouse were a U.S. citizen or U.S. resident alien in 2021, and either you, your spouse, or both of you, have a valid SSN.  

[khurram]

It does seem like that from C1. But if you go look at C4 or C5, it seems like we should only claim for the spouse who has an SSN which means we can only claim for one of us (me). 

If this is the correct way, then how do i correct for turbtax's mistake of claiming the refund for both of us? Thanks!

[KrisD15 · Accepted solution]

No, you can't go back to address the first or second stimulus payments nor the credit issued on the 2020 return. 

According to the IRS, for the 2020 Recovery Rebate Credit:

Valid social security number. A valid social security number is one that is valid for employment in the United States and is issued before the due date of your 2020 return (including extensions).

TO ADDRESS THE QUESTION OF THE 2021 RECOVERY REBATE:

No, your wife is not eligible for the 1,400 since she does not have a valid Social Security Number and won't have one by the due date of the 2021 return. 

If your wife does not have a valid social security you would not be able to pass the TurboTax review. Did you enter a social security number for her in the "My Personal Info" section? 

If you are using TurboTax Desktop, go to the Recov Rebate Cr form and select

NO for line 2

NO for line 3

YES for line 4

Line 6 should show 1,400 only 

If you are using TurboTax Online with the intention of printing and mailing the return, and the program is generating that additional 1,400 for your wife, go back and enter 1,400 as received. This is only used for the TurboTax worksheet, so it is not part of your 1040, and it will adjust your Recovery Rebate to 1,400 as it should be. 

For Online, delete "Recovery Rebate Worksheet" , the question will be asked again, enter 1400. 

Select Tax Tools then Tools on the left side-bar

Select "Delete a form" on the TOOLS screen

Scroll down, find and delete "Recovery Rebate Worksheet" 

[khurram]

Thanks for the detailed response. I am going to do what you suggested.

[sharonsmith1987]

@khurram 

I am a little alarmed by a couple previous responses, but am guessing they didn't understand exactly what you meant (or maybe I'm not). I have been in the same position as you previously and for the third economic payment, she WILL NOT get the 1400. You are correct that TurboTax should not have added the second 1400. However, when you file with your SSN and do the rebate, you WILL get the payment, but as she isn't, it will be 1400 instead of 2800. This is how it worked for us while my husband had his ITIN....our kids and I got one, but not him. For tax purposes, he is a resident alien. For immigration purposes, he is a non resident alien, but has his work authorization and SSN. Now he has his SSN and qualified for the rebate and will be receiving 1400 with our taxes as he is considered a resident alien for tax purposes. I'm not sure why you're getting false information. Also, it says on the IRS website that the first payments weren't going to have to be paid back if people got payments they weren't supposed to but the third one could be, depending on your income and what was wrong. I hope this helps!!

[sharonsmith1987]

@khurram  I just now saw the last comment that gave you the correct information and instructions on how to fix it with TurboTax. I thought in these forums we would be getting advice from people who prepare taxes and professionals, or those who know what the rules are and can back it up with information and links to the IRS. This makes me a little nervous about the advice I have received in the past from "expert" members....

IRS.gov gives a ton of info so it is a lot to go through and take in, but they do list the information. You'll be clicking link after link and probably learn a few more things you didnt know, like I did, but I'm thankful they have a website to refer to.