Recovery Rebate Credit Computed Incorrectly by TurboTax

[ritadelight]

My wife and I, after filing jointly, received an IRS CP11 stating that IRS found an error on our 1040 related to Recovery Rebate Credit. We had followed TurboTax instructions entirely, input all monies received from stimulus checks, and the TurboTax program asked if we wanted a recovery credit. Well, of course we do, we replied, as long as we're entitled to it. Turns out, according to the IRS, we weren't entitled to it, we are now being charged an additional $1011, including interest, and all calls to IRS have been impossible. I believe it's because our AGI exceeds the federal limit (by process of elimination - the IRS provides 5 possible reasons but neglects to give you the exact reason). Multiple calls to TurboTax have been frustrating and not helpful (TurboTax just said, sorry, you can request a refund of the product bought -Premier - goodbye) and we're unlikely to use TurboTax again because of this, despite using TT for about 12 years previous. Anybody else run into this? Any successes in resolving it??

[NCperson]

@ritadelight - it's unlikely your AGI is the issue - that would have been automatically calculated by TT and then the IRS would have used the same calculation - so there would be no difference.

But let's review your situation.  The calcuation for Line 30 of your form 1040 is quite simple:

1) the Number of people listed on your 2021 tax return

2) times $1400

3) less what you received for the Stimulus

4) equals Line 30, but not less than zero

(it's a little more complicated if your AGI exceeds $150,000 but we can come back to that later if necessary, but unlikely to be the issue)

for 3) how much did you receive?  DO NOT RESPOND FROM MEMORY...

either look at your bank statements from March - May, 2021

or look at Letter 6475 that the IRS sent to you.  What I see over and over on these boards is that couples that filed jointly did not realize that the TWO letters sent to you (one to each spouse) had to be added together to answer TT's question, 'how much stimulus did you already receive'.

The difference between what you actually received (after reviewing your bank statement) and what you originally entered into TT is probably the amount the IRS adjusted. 

if that is hard to follow, please post the following and I will explain

1) what is on Line 30 of Form 1040

2) how many people were listed on your 2021 tax return

3) how much did you receive in stimulus last year (again, look at your bank statements - no guessing, please)

4) how much did the IRS adjust your refund / amount you owe by?

[Sweat4Outcome]

TurboTax entered $2800 on Recovery Rebate Worksheet when I clearly entered no dependents and the worksheet should not have been completed until as per directions. At no point did I request a rebate. I’m still trying to get a human at IRS. WHAT TurboTax do for me.

[Critter-3]

Ok ... the credit was worth $1400 for you and $1400 for your spouse thus $2800.  The program told you that you were eligible for the credit then asked you how much you got in advance in the third stimulus credit so if you entered zero the program gave you the full credit you were due.   So when the IRS checked their records they believe you already got the advance so they removed the credit from your return and either reduced your refund or increased your balance due.   

NOW ... if you have checked your records and you really did NOT get the advance stimulus payment then all you can do is have a trace put on the missing money... 

If you need to trace a payment that the IRS says has been issued to you, mail or fax a completed IRS Form 3911, Taxpayer Statement Regarding Refund.

Updated IRS FAQ about recovery rebate credit

https://www.irs.gov/pub/taxpros/fs-2022-27.pdf

[NCperson]

@Sweat4Outcome - 

there is really no reason to call the IRS. IF there is an error on Line 30, they will find it and make the adjustment.

Line 30 is simply: $1400 times the number of people listed on your tax return LESS what you stated you already received from the 3rd stimulus last March - May, 2021.  

the number of dependents has nothing to do with what is on Line 30...... it's the number of people listed on the tax return - period. 

[maxine3]

So should I reply to them and forward this information?

[NCperson]

@maxine3 - who is the 'them' you are refering to and what information are you refering to????

if you are referring back to your May 11th post, you haven't posted any information that would indicate that Turbo Tax calculations were incorrect.  Most likely, the amount you entered as having received for the 3rd stimulus was incorrect.

1) what was on Line 30?

2) how many peole are listed on your tax return?

3) By how much did the IRS adjust your tax return?