Recovery Rebate Credit Computed Incorrectly by TurboTax

[OverCat]

I received a notice from the IRS stating they had changed my 2020 tax return in the area of the Recovery Rebate Credit.  The notice did not specifically state a reason for the change, but instead stated the "error" was in one or more of the following areas:

• The SS number of one or more of the individuals claimed as a qualifying dependent was missing or incomplete.  I have no qualifying dependents; none were listed.
• The last name of one or more individuals claimed as a qualifying dependent was missing or incomplete.  I have no qualifying dependents; none were listed.
• One or more individuals claimed as a qualifying dependent exceeds the age limit.  I have no qualifying dependents; none were listed.
• The amount was computed incorrectly (683D).  By process of elimination, this must be the reason for the change made by the IRS for the amount claimed as the Recovery Rebate Credit on my 2020 tax return.  But I do not understand why?  I received $1,353.00 for the 1st Economic Impact Payment and no other payments.  This amount is correctly included in the Recovery Rebate Worksheet and is the ACTUAL AMOUNT RECEIVED, this is not an estimated amount, additionally, this amount both matches the IRS website information and my bank account EXACTLY.  In addition the AGI for 2020 was <$150,000 (MFJ).  What am I missing here?  The only variable in the computation of the Recovery Rebate Credit is the amount of EIP received. It appears that either the TurboTax program is wrong, or the IRS is wrong.  If I am wrong, please point out to me where I am wrong based on this information. 

Please don't suggest that I contact the IRS and discuss - I have been trying for two days continuously and equally, I have received a recording each time that all agents are busy and that I should call back the next day. There isn't even an option to stay on the line for the next available agent. On the CP-11, the only course of action for disagreeing with the recalculation of the credit is to call the IRS (see previous sentence). What is TT and Intuit going to do to substantiate FOR ME that the computation is correct? Thanks.

[OverCat]

Seems I solved my own problem. Here is what I found by wandering around the internet. This is only applicable when it appears the amount of EIP has been incorrectly reported on the Rebate Recovery Worksheet and the filer is Married Filing Jointly. If you are having this problem (and filing MJF) do this:

Log into your own IRS website and look at your records. The path is "Account Home > Tax Records". Right there, you will find the following heading and associated information (read it carefully, I have provided the bold highlighting for you):

2020 Economic Impact Payment Information

Use these amounts to calculate any Recovery Rebate Credit on your Tax Year 2020 return.

If you file as Married Filing Jointly, each spouse should see their own amount within their own account. All amounts must be considered if filing jointly in 2020.

<END IRS WEBSITE INFO>

After you look at your own account, then have your the other half of your "jointness" log into their IRS account and view the same information. 

When the return is a MFJ, each of the "joints" needs to login to their own IRS account and to determine the amount paid. Equally, each of the "joints", if needed, should verify the amount was actually deposited into their bank account (or accounts). I think if you pull the string far enough, you will find the total amount paid to the "joints" is equally divided and reported between the two accounts and is therefore accurate (for MFJ). This is the exact case for me and my "joint". Also, this may be why there appears to be a strange and consistent anomaly in the complaints (lots of them on the internet about this issue whether it was from Lacerte, TurboTax, TaxSlayer, or any other program), that the IRS was "taking back" exactly 1/2 of the credit.

[OverCat]

Kinda sad that TT hadn't already figured this out...sigh....

[Critter-3]

Ok ... so when the program asked you how much you AND your spouse got in the first 2 stimulus payments did you enter the total you got ?   If so then the program computed the credit based on your input alone.  If you did not enter the amount asked for by the program then the IRS will make the correction automatically.  

If you claimed a missing stimulus payment on your return but the IRS took it off you have to ask the IRS. They think they already sent it to you. Maybe it went to an account you don't remember. Or you got a check or a card. It was probably easy to miss the debit card in the mail and think it was junk mail. They have to put a trace on it.

How to put a trace on a missing 1st or 2nd Stimulus payment.  IRS for Payment Issued but Lost, Stolen, Destroyed or Not Received

See question F3 here, you can expand it to see how to put a trace on it.

https://www.irs.gov/newsroom/2020-recovery-rebate-credit-topic-f-finding-the-first-and-second-econom...

[Moon doggy6]

Thanks for your clear contribution and guidance.  Hopefully TT will do better in the future... 

[sarahjw189]

This happened to me. I received a refund amount of $1400 less than what turbo tax stated my total refund was. I filed as an independent, I am not claimed on anyones taxes and have no dependents of my own. So the first four errors are irrelevant to me. The only remotely applicable error is “the amount was computed incorrectly”, in which case turbo tax guarantees 100% calculation guarantee. I qualify to receive the stimulus from March of 2021, I did not receive it at the time so I claimed it on my taxes. But now the IRS changed my tax refund and I got much less than expected and when I call I get the same “call back another day” prompt. What can I do? I’m a poor college student living on my own and I needed that money to pay for car repairs and other expenses. I am eligible for the refund but the IRS doesn’t think so… what can I do to fix this??

[Vanessa A]

This is not an issue with accuracy or TurboTax.  The IRS records are indicating you already received the Third Stimulus Payment. So the IRS then adjusts your refund and removes that extra $1,400 on your return.

Take a look at your bank statements going all the way to March of 2021.  Many people find that they did actually receive it, but they forgot about it or just  never noticed it.

If you find you absolutely did not receive the payment, you can call the IRS at 800-829-1040 to find out where they sent it. They are the only ones that can tell you why they took it away if you did not get it before. 

[maxine3]

I think the computation was done incorrectly by TURBO TAX what do I reply to them?

[Critter-3]

Them who ?    If you mean the IRS who corrected your return there is nothing to fix... they don't care who made the error. 

Now if you mean TT ... you can put in an accuracy guarantee claim : 

Any calculation errors on the part of TurboTax are covered under the Accurate Calculation Guarantee.  TurboTax will pay any penalties and/or interest due to a calculation error but not any taxes owed.  The Guarantee does not cover any user entry errors or omissions.

See this TurboTax support FAQ for the 100% Accurate Calculation Guarantee - https://ttlc.intuit.com/questions/2566201-what-is-the-turbotax-100-accurate-calculation-guarantee

See this TurboTax support FAQ for submitting a claim - https://ttlc.intuit.com/questions/1901269-how-do-i-submit-a-claim-under-the-turbotax-100-accurate-ca...

See this TurboTax support FAQ for documents needed to submit a claim - https://ttlc.intuit.com/questions/1901060-what-documents-do-i-need-to-submit-a-claim-under-the-turbo...

[NCperson]

@maxine3 what specifically was computed incorrectly? can you post details? 

[maxine3]

Recovery rebate credit on my tax return.

[NCperson]

@maxine3 - more detail please

1) how much did you receive for the 3rd stimulus in March - May, 2021

2) what is on Line 30 for Form 1040? 

3) how many people are listed on your 2021 tax return (you, spouse, children)? 

[VolvoGirl]

You needed to enter the total amount you received for the 3rd Stimulus payment.  Line 30 is only if you didn't get the full amount or qualify for more. 

Did you see these screens when you filled out your return?  See Critter's screen shots

https://ttlc.intuit.com/community/after-you-file/discussion/irs-notice-error-in-2021-form-1040/00/27...

[NCperson]

@VolvoGirl unfortuantely, it's a little more complicated than 'you need enter the total amount you recieved'

it's "you need to enter the total amount YOU and YOUR SPOUSE received as if you filed joint, the IRS sent out two letters confirming how much you received and you need to ADD BOTH LETTERS TOGETHER'

🤓

[jdvjlv07]

I am having the exact same issue and I reviewed our one and only checking account and there was no payment other than the 1400.00!  And these phone lines are not being answered because they have such high call volume and then hang up on you.  Just GReaT!!!