Recovery rebate credit

[pdmrwk]

Using Turbo Tax deluxe.  It suggested I might qualify for recovery credit.   I entered my info (joint filing) with 124000 income for 2020.   With two stimulus payments 1st 573 dollars me, 2nd 600 my wife. they calculated I had credit due of approx. 2400 dollars.  I am concerned that this can't be right?

On research it was indicated that my two payments were based on 18 and 19 returns.    These were around had higher income by 50K,due to the fact that I was allowed to defer RMD for 2020.

So based on this is it correct that I should get this 2400 dollar credit?

bob

[MinhT1]

The first two stimulus payments are advanced payments of the 2020 Recovery rebate credit which is based on your 2020 income. If your 2020 income is below the threshold of $150,000, your are eligible for the full stimulus ($1,200 per spouse for the first stimulus and $600 per spouse for the second stimulus).

So if the actual payments received were reduced because they were based on 2018 and 2019 incomes which were higher, then you are entitled to receive the short payment as the Recovery rebate credit which will be added to your 2020 tax refund.

[NCperson]

here is how it really works;

it's the GREATER of the stimulus payment or the recovery credit.

The stimulus payment is based on your 2018/ 2019 tax return.  

the recovery credit is based on your 2020 tax return. 

so you are eligible for the greater of the two.

if the recovery credit is greater than the stimulus payment, you get the difference on Line 30 of Form 1040.

if the stimulus payments are greater than the recovery credit, you get no more and don't have to pay anything back. 

make sense?