Recovery Rebate Credit - Additional Child born in 2020

[kberryman]

I am using Turbo Tax 2020 premiere and i get to the section asking about my stimulus check payment. I received two rounds of stimulus (myself, wife, child) first round 2900 (1200 per person + 500 per child), second round 1800 (600 per person). My son was born in June 2020 so he was not on my 2019 tax return to claim him. I read i should be able to claim my son on my 2020 tax return for the recovery rebate credit, but on turbo tax when i enter my first and second stimulus payment amount the program just says that you received the correct amount. How do i claim my son born in 2020 in turbo tax for the recovery rebate credit?

[CatinaT1]

@kberryman 

You mention in your post that the first payment included an amount for a child.  What child was this payment for?  Where is that child now?  Are you not claiming them on your 2020 return?  If you are not claiming them in 2020 then technically you were not entitled to that payment and the payment you did receive with your first stimulus will be counted as payment for your son born in 2020.

If you did not receive your first and/or second stimulus payment or if the amount received is not correct, you can claim it on your 2020 tax return as the Recovery Rebate Credit.

In TurboTax Online, to claim the Recovery Rebate credit please do the following:

1. Sign into your account and continue from where you left off
2. Click on Federal in the left-hand column, then on Federal Review on the top of the screen
3. On the next page titled Let's make sure you got the right stimulus amount, click on Continue
4. Follow the interview
5. TurboTax will determine whether you are entitled to any additional stimulus
6. Any stimulus amount remaining due to you will show as a credit on line 30 of your form 1040.

[edited | 1/29/21 9:58am]

[Opus 17 · Accepted solution]

If you are only listing child #2 on your return this year, because child #1 is no longer a dependent or is being claimed by another parent due to a divorce or custody order, then you don't get an additional payment.  The credit is based on the number of dependents, not who they are, and if you changed the identity of the dependents but not their number, you won't get an additional credit.

If you are listing both child #1 and #2 as dependents, make sure child #2 really is a dependent.  The child must be indicated as living in your home more than half the year (choose 7 months or more, not 6 months) and the child must have a valid social security number. 

[kberryman]

I found that when i changed the child to living with me for 7 months vs 6 months, this additional stimulus deduction automatically updated. I wasn't aware there was any kind of number of month restriction.

This was my own issue not reading correctly. "Select 'the whole year' for a child who lived with you for all of 2020 after being born". Thanks!

[Opus 17]

TurboTax interpret “six months“ to be exactly half the year, and this creates problems because most of the dependent rules require that the child live with you more than half (even if it is only one day more) and exactly half is not more than half.

More than half, or the whole year, are also the correct answers for newborns even if born on 12/31, since they are deemed for tax purposes to live with their parents the whole year (unless there is a custody dispute).  

[jackgriffin417]

In response to the message above about clicking the whole year for newborns, this was a HUGE help!

This was very helpful. I knew the stimulus check was not calculating correctly for my daughter born near the end of the year. Turbotax acted as if she didn't exist for the stimulus check and child tax credit. So once I made the edit to "whole year" as she is a newborn, I immediately got the stimulus checks for her and the full child credit. I really appreicate the help. One simple mistake about cost me over 2.5k in a refund. Thanks!

[bjwilliams1010]

I have a related question and am curious as to how to if it "working as intended" or if there is a remedy. I've started to enter our 2020 income information, but my wife and I also had our first child in 2020. We received some form of stimulus payments in both the first and second round's last year; however, received nothing in terms of child tax credit (since our child would not have been on our 2019 taxes). In using the TurboTax tool for determining whether we should be receiving anything re the Recovery Rebate Credit it is telling me "no" because it is now using the preliminary AGI I've entered for 2020, instead of my most recent 2019 filed tax return. Our income did go up slightly in 2020 versus 2019, but my understanding is that the Recovery Rebate Credit is based on your most recent tax return (in our case 2019), yet TurboTax is instead using 2020 numbers (not filed) entered into the portal. Is this right? If not, is there a solution within the portal? 

[Critter-3]

@bjwilliams1010 

You are not correct ... the ADVANCE stimulus payments were based on the income on the  2018 or 2019 returns  HOWEVER  the CREDIT on the 2020 return is based on the income on the 2020 return so if you don't qualify for the credit on the 2020 return then you don't get it ... sorry but that is how the law was written.  

[bjwilliams1010]

Thanks for the reply and simple explanation. So in sum, it's working as intended. Appreciate it. 

[SonnyMiami]

My experience here is a with a child born in February 2020, so the child wasn't on our 2019 returns and didn't receive either the 1st $500 stimulus nor the 2nd $600 stimulus (so $1,100 total).

While TurboTax correctly calculated that we should have received $2,900 & $1,800; it didn't make it clear that we had to check "No" for receiving the correct amount.

Once I clicked know, I entered what we received: $2,400 & $1,200 respectively; the correct adjustment of $1,100 flowed through to Line 30 (Recovery Rebate Credit) on our forms.

My recommendation is to calculate what you should have received & then back into in that section once you know what your new child/dependent should have received.

*Perhaps an asterisks in that section explaining dependents & what not would have helped.