Recovery Rebate Tax Credit

[xmasbaby0]

@jimwolfe2hotailcom Oh---and when you check your IRS accounts make sure you check for both spouses since you filed a joint return.

[Symber]

In Washington state, out governor issued a state wide stimulus check... how would that factor in?

[xmasbaby0]

Stimulus checks are not taxable.   The questions for the recovery rebate credit  on your federal tax return have nothing to do with state stimulus checks.  The recovery rebate credit only pertains to the 1st and/or 2nd federal EIP payments.

[ArtVandelay]

There is a PROBLEM with Turbotax and the way it presents questions in the interview for the Recovery Rebate Tax Credit.  

There's no legitimate way to answer the Turbotax questions correctly if you were a dependent in 2020 (thus, your parents or guardians received an additional Recovery Rebate Tax Credit on your behalf), but are independent in 2021.  I believe you are not eligible for the Recovery Rebate Tax Credit as a dependent (I'm certain of that), but Turbotax interview questions ask if you received the credit (which you didn't because your parents received it) so you answer "No" to the interview question.  Turbotax then automatically assumes your are eligible (but you're not because your parents received the credit).  

If you lie and say "Yes" to the Turbotax question, Turbotax then asks you how much you received and whether it matches the IRS Letter 6475.  But there was no amount and no IRS Letter 6475.

What is the work around?

[VolvoGirl]

BUT you do get it on your return if you are not a dependent even if your parent got it for you based on 2020.  You are wrong.

If you got a Stimulus payment for a dependent you aren't claiming for 2021 you don't have to pay it back.  They can get it on their own 2021 return.   On their return they say NO they didn't get it - because you did.  That's legit.  It's a IRS loophole. The IRS used 2020 to send the checks out fast but it's really based on 2021.  You both get to keep it.

[ArtVandelay]

Wow!  If you're right, I'm $1400 richer! 

Anyone else able to corroborate this answer?

[ArtVandelay]

You're right!  Thank you. 

I confirmed from the www.IRS.gov website:  "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."

[JosephAHMA]

Helpful, but hoping you could help.  I fit this exact situation.  I got my first two stimulus checks when I filled out my 1040 individual 2020 Tax return in early 2021.  However, after doing same return last month for 2021 taxes, TurboTax showed I would get $1,400 stimulus (26 year old not claimed as dependant by my parents and I am a full time grad student).  I did not.  Rejected.  Got form CP13.  None of the 5 reasons in the notice apply.  Is their a glitch?  Thanks,

[DoninGA]

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@JosephAHMA wrote:

Helpful, but hoping you could help.  I fit this exact situation.  I got my first two stimulus checks when I filled out my 1040 individual 2020 Tax return in early 2021.  However, after doing same return last month for 2021 taxes, TurboTax showed I would get $1,400 stimulus (26 year old not claimed as dependant by my parents and I am a full time grad student).  I did not.  Rejected.  Got form CP13.  None of the 5 reasons in the notice apply.  Is their a glitch?  Thanks,

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If your refund is short $1,400 then that is because you said you did not receive the 3rd stimulus payment and the IRS has records that show you were sent the 3rd stimulus payment so they removed the $1,400 Recovery Rebate Credit that was entered on Form 1040 Line 30.

Go to this IRS website for your tax account to see if the 3rd stimulus payment is entered - https://www.irs.gov/payments/your-online-account

If you checked your bank account in the March - May 2021 timeframe and there is not a $1,400 EIP3 payment from the IRS then go to this IRS website for how to start a trace on the payment - https://www.irs.gov/newsroom/questions-and-answers-about-the-third-economic-impact-payment-topic-j-p...