rebate Recovery Credit Qualification - 2019 or 2020 AGI?

[rcast96]

Everything that I have read indicated that qualification for the rebate recovery credit is based on 2019 AGI.  However, Turbo tax is calculating based on 2020 AGI.  Which is correct?  

[MinhT1]

The stimulus payment is technically an advance on the Recovery Rebate credit which is a tax credit against your 2020 income tax. It is based on your 2020 AGI.

The IRS has been sending out the first stimulus payment based on your 2018 or 2019 AGI, and the second stimulus based on your 2019 AGI. If you have received the first and/or second stimulus payments, and your 2020 AGI turns out to be above the income threshold, you do not have to repay the payments received.

Please read this IRS document for your information.

[confusedtaxpayerinWA]

I did not qualify for a stimulus because my income was over the max limit.  BUT, when doing my 2020 taxes using TT Deluxe, it asks if you received a stimulus in 2020.  I said NO.  It tells me, "Great news! You quality for a stimulus credit".  Hypothetically, let's say that I had a 2019 AGI of $100K, and a 2020 AGI of $45K (due to the RMD changes).  TT is using the 45K figure to give me an $1800 credit that I DO NOT deserve.  I can't file my taxes until this is resolved because federal prison does not suit my lifestyle.  FYI, if you say YES to the question and put zero in the boxes, you get the same "Great news".  Very confusing.

[rcast96]

Thank you.  I was partially employed in 2019 as I transitioned from one company to another.  As a result, I actually got a partial stimulus check the first go around.  I clearly do not qualify based on 2020's AGI but everything I have read seems to point to 2019 AGI as the qualifier for both. 

I use TT Deluxe and generally do not do the "step by step".  I usually go directly to what I need.  While I have looked for it, I can't seem to find where the question is asked " did you receive a stimulus check?"         

[DaveF1006]

Yes, you can enter this in your Deluxe software but you will need to be in step by step. Once you are in Step by Step, select the Federal Review tab. This will take you to the section to enter your stimulus payment information.

[AmeliesUncle]

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@rcast96 wrote:

Everything that I have read indicated that qualification for the rebate recovery credit is based on 2019 AGI.  However, Turbo tax is calculating based on 2020 AGI.  Which is correct?  

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It is based on 2020 AGI.

The prepayment of the credit (the stimulus check you received) was an estimated amount based on your 2019 AGI.  But the actual credit is based on the 2020 AGI.  If your advance payment/stimulus was larger than what you actually qualify for using your 2020 AGI, you do NOT need to repay the difference.

[AmeliesUncle]

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@confusedtaxpayerinWA wrote:

and a 2020 AGI of $45K (due to the RMD changes).  TT is using the 45K figure to give me an $1800 credit that I DO NOT deserve.  I

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The credit is based on your 2020 AGI, NOT your 2019 AGI.

[Opus 17]

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@confusedtaxpayerinWA wrote:

I did not qualify for a stimulus because my income was over the max limit.  BUT, when doing my 2020 taxes using TT Deluxe, it asks if you received a stimulus in 2020.  I said NO.  It tells me, "Great news! You quality for a stimulus credit".  Hypothetically, let's say that I had a 2019 AGI of $100K, and a 2020 AGI of $45K (due to the RMD changes).  TT is using the 45K figure to give me an $1800 credit that I DO NOT deserve.  I can't file my taxes until this is resolved because federal prison does not suit my lifestyle.  FYI, if you say YES to the question and put zero in the boxes, you get the same "Great news".  Very confusing.

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Your situation is legal and correct. The credit is and always has been a credit on the 2020 tax return, based on your 2020 situation.  The law required the IRS to make advance estimated payments based on 2019 or 2018 information, but the credit is actually claimed based on 2020 information.  If you are owed more now, because of a change in income, you are legally entitled to it. 

[Opus 17]

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@rcast96 wrote:

Thank you.  I was partially employed in 2019 as I transitioned from one company to another.  As a result, I actually got a partial stimulus check the first go around.  I clearly do not qualify based on 2020's AGI but everything I have read seems to point to 2019 AGI as the qualifier for both. 

I use TT Deluxe and generally do not do the "step by step".  I usually go directly to what I need.  While I have looked for it, I can't seem to find where the question is asked " did you receive a stimulus check?"         

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The credit is and always has been a credit calculated on your 2020 return based on your 2020 situation (income, dependents, etc.). The IRS was also instructed to make advance payments based on 2019 or 2018 information, but the final credit amount is determined on your 2020 tax return.  If you are now due less that your advance payment (because of an increase in income) you do not have to repay the stimulus payment.  If you are due more now (because of a decrease in income, or claiming more dependents) then you get the extra on your tax return added to your refund. 

[confusedtaxpayerinWA]

Thank you all for your info.  While I really don't understand why the GOV would prepay stimulus based on a future AGI, I can only assume that it is because they are the government and always do things oddly and bassackwards.  I will continue with my return and will submit it sometime in March.  Should I end up in prison, I will be back on this forum to yell at all of you.  🙂

Thanks again!!

[rcast96]

lol ... 

thanks all for your input.  You all have been very helpful.  While the whole thing is somewhat convoluted, I get it that its an advance on 2020 credit.  Thanks Again !!!

[Richard Terrio]

TurboTax is only allowing the 2020 AGI on the Recovery Form for the COVID Relief.  They need to allow for the 2019 AGI for those of us that never received the first Stimulus check because of the IRS slowness.  The IRS says we will have the opportunity to Recover it on our 2020 tax but no way is provided in TurboTax because it defaults to the 2020 AGI even though it brought in my 2019 forms from last year.  HELP!

[DoninGA]

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@Richard Terrio wrote:

TurboTax is only allowing the 2020 AGI on the Recovery Form for the COVID Relief.  They need to allow for the 2019 AGI for those of us that never received the first Stimulus check because of the IRS slowness.  The IRS says we will have the opportunity to Recover it on our 2020 tax but no way is provided in TurboTax because it defaults to the 2020 AGI even though it brought in my 2019 forms from last year.  HELP!

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The Recovery Rebate Credit is an advance tax credit based on your 2020 federal tax return.

The IRS Recovery Rebate Credit Worksheet Line 11 requires the 2020 AGI to be used.

IRS Form 1040 instructions (2020) page 59 - https://www.irs.gov/pub/irs-pdf/i1040gi.pdf#page=59

[Malcolm66]

The Rebate Recovery Credit Worksheet in TT seems to be broken.  Due to lower AGI in 2020 I was due a partial Recovery Rebate Credit payment of $337 but the TT worksheet didn't add lines 17 and 20 together on line 21 so nothing was carried forward to line 30 of my 1040-SR.  Already e-filed to get a rebate before I noticed the error.  Really ticks me off that TT can't seem to get it right.

[Opus 17]

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@Malcolm66 wrote:

The Rebate Recovery Credit Worksheet in TT seems to be broken.  Due to lower AGI in 2020 I was due a partial Recovery Rebate Credit payment of $337 but the TT worksheet didn't add lines 17 and 20 together on line 21 so nothing was carried forward to line 30 of my 1040-SR.  Already e-filed to get a rebate before I noticed the error.  Really ticks me off that TT can't seem to get it right.

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The IRS may correct the rebate amount.  If they don't, you can file an amended return after you see what refund was actually paid.  If you are sure you qualified and Turbotax worksheet was incorrect, we can try and report this as a bug.  When did it happen?  You would need to go to the Help menu and find "Send file to agent."  This creates a token number you can post here, and uploads an anonymous version of your return to tech support.