Recovery Rebate Credit not being applied

[ylexot]

I've entered my first and second stimulus payment amounts (...I haven't gotten my second so I entered $0) but TurboTax is not providing any credit for this??  I've done the estimators and I should have received $1100 for the Second Stimulus.  How do I make TurboTax apply this?

[JamesG1]

In TurboTax Online, you are prompted to input stimulus check 1 and stimulus check 2 information under Review down the left hand side of the screen.

You can also access your stimulus check choices by following these steps: 

Down the left side of the screen, click on Federal.Across the top of the screen, click on Other Tax Situations.

At the screen Let’s keep going to wrap up.  Click on Let’s keep going.

At the screen Let’s make sure you got the right stimulus amount, click Continue.

At the screen Did you get a stimulus payment? you can update your stimulus check entries. 

Then the software computes the amount of your stimulus check amounts based upon the information that has been entered into the tax software.  If you are due an additional amount, it will be issued as a Recovery Rebate Credit (RRC) on line 30 of the 2020 1040 tax return.

If you believe that the Recovery Rebate Credit (RRC) on line 30 of the 2020 1040 tax return is not correct, then you should: 

• Check the amounts entered for stimulus check 1 and stimulus check 2, and
• Make sure that you have correctly entered your dependent information.  

If there is a difference, it is in one or both of these situations. 

Dependents must be reported as qualifying children.  IRS FAQ state:

Who is considered a qualifying child?

A qualifying child is a child who meets the following conditions: 

• Relationship to the individual who’s eligible for the payment: The child is your son, daughter, stepchild, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of them (for example, grandchild, niece, or nephew).
• Child's age: The child was under age 17 on December 31, 2019.
• Dependent of the individual who's eligible for the payment: The child was claimed as your dependent on your 2019 tax return or in the Non-Filers: Enter Payment Info Here tool.
• Child's citizenship: The child’s a U.S. citizen, U.S. national, or U.S. resident alien.
• Child's residency: The child lived with you for more than half of 2019.
• Support for child: The child didn’t provide over half of their own support for 2019.
• Child's tax return: The child doesn’t file a joint return for the year (or files it only to claim a refund of withheld income tax or estimated tax paid).

The payment will include $600 for each qualifying child listed on your 2019 tax return with a valid SSN or ATIN. 

See also this TurboTax Help.

[ylexot]

Thanks for the reply.

I check my entries as you suggested.  Turbotax actually shows during the Federal Review that  should have received $2900 for the first stimulus and $1200 for the second.  I received $2505 and $0 and entered these values.  TurboTax didn't make any adjustments for this and finished the Federal Review???

Not sure why it's not applying a credit?  I think that it should.

Any other suggestions?

[Opus 17]

The refund meter may not change when you complete that section of the interview, because TurboTax you credit for the rebate as soon as you enter your income and dependents, and then takes it off if you already received it.  You will need to print your return before you file in check line 30.

if you are not receiving credit for a dependent, make sure the dependent has a valid Social Security number and that you indicated that they lived with you for more than half the year.

[ErnieS0]

Double check your Form 1040 to make sure TurboTax did not apply any stimulus. The Recovery Rebate Amount shows up on line 30 of Form 1040.

To preview your return:

• Click Tax Tools in the left column
• Click Tools below that
• In the center column, select View Tax Summary
• In the left column click Preview my 1040
• You will see Federal 1040
• When you are done, click Back in the left column

If there is no stimulus and you’ve checked your entries, schedule a call with one of our tax experts.

[Opus 17]

Your numbers don’t seem to add up. $2900 would be the correct amount for married filing jointly with one dependent, but $1200 will be the correct amount for married filing jointly with no dependent. Did you change dependents during the year? Are you claiming a qualifying child dependent on your tax return this year?  also, be aware that the credit is based on the number of dependents you claim and not their identity. If you had a dependent in 2019 who turned age 17 in 2020, and you added a new dependent, you would not qualify for anything additional because the number of dependents would be the same, even though their identity is different.

[ylexot]

I agree, they weren't the numbers I expected to see either.

I took a screenshot to show you.  I hit the "No" and then entered $2505 and $0.

[Opus 17]

You may be getting hit with a bug of some kind. $2900 is not the correct amount for one dependent at your income level.  You might try and delete your dependent and then re-enter them and then go back to the federal review section.

[Opus 17]

How many dependents are you claiming on your 2020 tax return?  If your adjusted gross income for 2020 is really $178,000, your eligibility is only $1487 for round one and $387 for round two, if you are claiming 1 dependent.  

[ylexot]

Hang on...the first stimulus check was issued in Apr/May of 2020.  How could it be based on my 2020 AGI?

I believe it was based on my 2019 AGI/dependents....$163,474.00/1 dependent.

[Opus 17]

Under law, the stimulus was always a credit on the 2020 tax return.  The IRS was instructed to use 2019 or 2018 information if necessary, in order to make faster payments. If, when you file your 2020 tax return, you qualified for more than you received, it would be added as a rebate. If you can now qualify for less than you received, you do not have to repay the difference. Since you qualified for $2505 based on your 2019 return and only qualify for $1500 on your 2020 return, you don’t have to pay back the difference but you don’t get anything extra. The calculation that TurboTax is performing seems to be correct, even though the information that is being displayed is not correct.

Once again, based on your 2020 income, you would be eligible for a second payment of $387 if you did not receive one previously. I don’t know why TurboTax is not calculating it correctly or displaying the correct information. Have you checked line 30 to see what is there?

[ylexot]

Thanks for that explanation. That makes a lot more sense.

I did check line 30 and there is no entry.