TurboTax not calculating stimulus amount correctly???

[Chrisgmitchell]

We're using TurboTax Home and Business edition for 2021. My daughter was a full-time student so I claimed her as a dependent on my 2020 return. Her own 2020 return clearly indicated that she was claimed as a dependent. We used TurboTax for 2020 also. For her 2021 return, she is NOT being claimed as a dependent on my return and her own return says she is not being claimed either.   On her return, Turbo Tax asks her if she received the third stimulus check. The answer is NO.   It then says that she can claim the $1400 stimulus and adds that to her refund. This doesn't seem correct to me. TurboTax has a portion of its own website devoted to the stimulus checks which I pulled up and when I answer the questions it says she is not eligible because she was claimed as a dependent in 2020. However the 2021 edition seems to want to give her the $1400 anyway. What can I do on this? I know if we answered that she already received the $1400 (which is not true) then this will go away. Thanks

[MayaD · Accepted solution]

Your daughter can claim the recovery rebate credit.

Per IRS

If you were claimed as a dependent on someone else’s tax return for 2020, you were not eligible for the third Economic Impact Payment. If no one can claim you as a dependent for 2021 and you are otherwise eligible, you can claim the 2021 Recovery Rebate Credit, and must file a 2021 tax return to claim the credit. Questions and Answers about the Third Economic Impact Payment — Topic B: Eligibility and Calculatio...

[xmasbaby0]

Congress left a giant loophole in the tax law for those EIP payments.   The 3rd EIP payment is based ONLY on 2021 now.   Even you received the 3rd payment based on your 2020 return---because they rushed those payments out last year--- you do not have to pay it back even if you do not claim your daughter for 2021.   But if she cannot be claimed as a dependent on a 2021 tax return she CAN get the $1400 recovery rebate credit herself.   The recovery rebate credit on a 2021 tax return is based solely on tax year 2021.

[Chrisgmitchell]

thank you for your response.  I see that on the IRS site now.  Just don't understand why Turbo Tax's own site regarding the stimulus says she would NOT be eligible.    They ask questions about 2020 specifically but to be fair, one of the questions was "Did somebody claim you as a dependent on their tax return?"  I had assumed they were asking about the 2020 return but perhaps they were really asking about 2021.  You get a different answer depending on what you answer on that question.