I am having an issue and wanted to see if others share it. My spouse and I had a baby in 2020 so we did not receive the "child" portion of the stimulus checks for COVID (CARES Act, etc.). In turbo tax, it correctly identified the child as a "dependent" and we got the standard $2000 credit for the child.
But, when turbotax at the end of the filing does the "lets make sure you got the right stimulus amount" it mentions that the number could be wrong if you added a dependent in 2020 (like a baby). When we put our numbers in (obviously without any dependent monies) and turbotax says this is all correct and continues on! Is anyone else experiencing this? We, very obviously have a new dependent that should have drastically changed our stimulus amount. Is this a turbotax fail? Did I input my dependent incorrectly (as mentioned I am still getting the normal tax credit)?
"The Stimulus checks are really based on your 2020 tax return. Any amount you already got will be reconciled on your 2020 return line 30."
^The missing piece. Per IRS the Recovery Rebate Credit process is based off your 2020 return and the latest limits (ie. 150k for joint before the 5% reduction kicks in).
Within the IRS instructions on how to fillout the 1040 is a handy section that walks you through how to calculate if you qualify for a Recovery Rebate Credit. Using that matched exactly to what TurboTax came back with.
Iink to instructions doc: https://www.irs.gov/instructions/i1040gi
- Its a huge doc, do a search on 'Recovery Rebate Credit Worksheet' to help find the calc instructions
Be sure to indicate that the child lived with you all year.
@lori-drozd wrote:
I already have and still doesn't recalculate stimulus
Verify all your answer concerning the child as your dependent.
Verify that you chose My Child, that the date of birth is accurate MM/DD/YYYY, that you indicated the child lived with you for the Whole Year, that the child did NOT provide over one-half of their own support, that there was NOT any other person in the household supporting the child, that you (and spouse if applicable) are the legal parents, that the child has a valid Social Security number and you did NOT check the box not valid for employment.
If all these questions were answered correctly and the stimulus payment for the child is not being added as a credit on your tax return, delete the child as a dependent and re-enter the child.
if i change to no, i lose my normal child $2000 deduction, so yes is correct (turbotax even says to claim as such)
What question did you change to no? Delete the child and re add your baby.
Something else must be going on (which I am surprised because my taxes are quite simple and even use the standard deduction). After deleting my child I find out I am not getting anywhere near the standard $2000 credit (we are getting less than 1k). This is strange because a) our joint income is far below the phase out portion (we would even be under for a single file) and b) our tax liability is very high (far exceeding the credit by multiples). Even after deleting and re-adding the child we still:
A) do not get our full standard $2000 tax credit (is there any other reason why we would not get this?)
B) we still do not get the stimulus portions and TurboTax checks that everything "looks great!"
I have answered, checked and rechecked all my questions and they are as you have suggested. What is going on????
I am having the same exact issue. We had a baby in 2020 and answered all the questions as suggested above. I even removed and re-added. Yet when it does the stimulus check at the end it says we got the correct amount but we did not since we had not received the dependent amounts for either stimulus.
Make sure that the newborn child is correctly reported as a dependent on your tax return. IRS FAQ states:
A qualifying child must have either:
An ITIN won’t be accepted for a qualifying child.
Note: When the qualifying child is claimed by spouses filing a joint return, at least one spouse must have an SSN that’s valid for employment for a qualifying child to be considered. If the return isn’t filed by married spouses filing a joint return, the taxpayer filing the return must have an SSN that’s valid for employment for a qualifying child to be considered.
The TurboTax software adds together the entries that you made for receiving stimulus check 1 and stimulus check 2.
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 Rebate Recovery Credit (RRC) on line 30 of the 2020 1040 tax return.
If you believe that you are due a Rebate Recovery Credit (RRC) on line 30 of the 2020 1040 tax return, then you should:
If there is a difference, it is in one or both of these situations.
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:
See also this TurboTax Help.
All of these things have been done. New child has a valid full SSN (no restrictions, and the "not valid for employment box is NOT checked). Stimulus dollars were found and recorded into the software from our bank account with a direct deposit from the IRS, I have double checked these numbers and they are 100% accurate. I have also back checked these numbers from what we should get based upon our income and the calculation, again, is correct. These numbers were based on 2019 return when we DID NOT have any dependents (children).
Since the above numbers do not reflect any child dependents in our stimulus payments, we are due the child-dependent portion. TurboTax does not find this and says the numbers are accurate and we are not due any additional stimulus monies.
As some background, our child is added, officially in TurboTax as a depended (completely accepted) and under the federal review we are listed and shown to receive the standard $2000 tax credit for a dependent child. Although TurboTax has identified the dependent for all other tax situations, it still fails to recognize additional stimulus payments for RRC on line 30, which should be both stimulus 1 & 2 to include a child dependent portion.
@lori-drozd wrote:
All of these things have been done. New child has a valid full SSN (no restrictions, and the "not valid for employment box is NOT checked). Stimulus dollars were found and recorded into the software from our bank account with a direct deposit from the IRS, I have double checked these numbers and they are 100% accurate. I have also back checked these numbers from what we should get based upon our income and the calculation, again, is correct. These numbers were based on 2019 return when we DID NOT have any dependents (children).
Since the above numbers do not reflect any child dependents in our stimulus payments, we are due the child-dependent portion. TurboTax does not find this and says the numbers are accurate and we are not due any additional stimulus monies.
As some background, our child is added, officially in TurboTax as a depended (completely accepted) and under the federal review we are listed and shown to receive the standard $2000 tax credit for a dependent child. Although TurboTax has identified the dependent for all other tax situations, it still fails to recognize additional stimulus payments for RRC on line 30, which should be both stimulus 1 & 2 to include a child dependent portion.
Suggest 2 more procedures that may help correct this problem.
Save the tax return and then close the TurboTax program. Re-start your computer. After the computer re-starts open the TurboTax program and go back through the sections of the return until you get to Federal Review, verify your entries and see if the credit is now being added.
If not, then save the return and close TurboTax. Uninstall TurobTax and re-install. Go back through the TurobTax program and see if this corrects the problem.
Completely agree with @lori-drozd on what she is experiencing. I have confirmed all of the same things.
The first stimulus check was based on 2018 and second based on 2019 returns. Not sure if this has anything to do with the issue but I did not use TurboTax for my 2018 or 2019 returns. How would TurboTax know if my stimulus is accurate without those returns.
It doesn't matter what your 2018 or 2019 returns were. The Stimulus checks are really based on your 2020 tax return. Any amount you already got will be reconciled on your 2020 return line 30. If you didn't get a Stimulus Check (and qualify) or you qualify for more it will be added to your 2020 return. But the good news is if they paid you too much they won't take it back.
When you go through the federal review tab it will ask how much you got if any. Or to enter your stimulus payment in TurboTax, type "stimulus" (without the quotes) in the Search box, then click the link that says "Jump to stimulus." If you didn't get one or both enter a 0 and not leave it blank or it won't calculate it.
After you have entered your tax information and are ready for the Federal Review, it will be the first question.
If you are trying to trigger it, you can go to Other Situations, answer any questions and click Done. The next automatic selection is Federal Review and it will ask about payments received.
"The Stimulus checks are really based on your 2020 tax return. Any amount you already got will be reconciled on your 2020 return line 30."
^The missing piece. Per IRS the Recovery Rebate Credit process is based off your 2020 return and the latest limits (ie. 150k for joint before the 5% reduction kicks in).
Within the IRS instructions on how to fillout the 1040 is a handy section that walks you through how to calculate if you qualify for a Recovery Rebate Credit. Using that matched exactly to what TurboTax came back with.
Iink to instructions doc: https://www.irs.gov/instructions/i1040gi
- Its a huge doc, do a search on 'Recovery Rebate Credit Worksheet' to help find the calc instructions
I am having the exact same issue - not receiving the stimulus for my baby we had in 2020 and the child /dependent tax credit seems to be incorrect too despite all my information being correct.
@ksmith8807 Go back to My Info and make sure you said your baby lived with you the WHOLE YEAR and not just the number of months. Even if a baby was born on Dec 31 he is considered to live with you the whole year. You might have to delete the baby and re add him. Pay attention to the questions, especially the one asking if he paid more than half of his support.
The child tax credit (CTC) along with the additional child tax credit (ACTC) may both be on your tax return. The ACTC is a refundable credit, while the CTC is allowed to reduce your tax to zero but any balance is not refundable.
Check line 28, Form 1040, to see if you have the ACTC or refundable portion listed. This may show the other portion and you should also see Form 8812 in your tax file (see steps below).
The stimulus payments are recorded under the Federal Review tab. Be sure you selected the correct answer so that you can enter the payments you actually received. When you look at Preview My 1040 below, be sure to check out line 30, Form 1040, for the Recovery Rebate Credit, which is the reconciliation result for the stimulus not yet received (see steps and image below).
By using the Tax Tools you can take a quick review of your 1040:
In TurboTax Online, to claim the Recovery Rebate credit please do the following:
@Anonymous had the right answer. I had all the information filled in correctly. I double, tripled, and quadrupled checked. I deleted my child and re-added. Nothing worked for the stimulus portion to correct it to add the additional amounts for my new child dependent. TurboTax was recognizing them as a dependent so I was still getting the normal deductions just the stimulus portion was not "correct"
Turns out it WAS correct. Each stimulus was based on a prior tax return (2018/2019 [if filed] for #1 and 2019 for #2). It used these monetary numbers for income and dependents. The phase out portion is extremely quick for the stimulus (5% for everything over 150k joint). While the true stimulus is really based on 2020 returns, you don't have to pay back if you made more money. Well, we did make more and while barely over the original threshold, we are more over this time.
So TurboTax (and the IRS) take your 2020 income and determine what you SHOULD have gotten for the stimulus. And even with the extra dependent we still made too much. Simple example of what is happening (lets pretend full payment based on 2019):
Stimulus 1: 2 adults - 2400
Stimulus 2: 2 adults - 1200
Total: 3600
Now in your 2020 Taxes, you have a child, which should be $500 round 1 and $600 round 2, so an additional $1,100! Not in this case (or in others too!). Lets say I now make more that in 2020 (the real calculated numbers) I have into the phase out on the money. Based on on my 2020 taxes I SHOULD have only gotten (hypothetical example) $2000. Well I don't have to give any money back, so ya me for getting extra money. BUT I had a baby, so we add what should have been the additional child portion: $2000+$1,100 = $3100. Well $3100 < $3600 I actually got so even with the new child I still get NO ADDITIONAL STIMULUS MONIES.
So this was the answer, my 2020 income was high enough that the "phase out" was > the additional child. Therefore, no more extra money.
My income is under the AGI for receiving the first two stimulus. Online calculators show I should have received for my child born in 2020 but there is no way for me to change it in Turbotax.
The first two stimulus were for the 2020 tax return, reconciled on the 2020 tax return and will have no affect for your 2021 tax return.
If you are referring to the third stimulus (Economic Impact Payment), this was $1,400 for each person listed on the 2020 tax return. The third stimulus will be reconciled on the 2021 tax return by selecting the 'Federal Review' tab at the top.
Be sure to answer the questions and enter the amount you actually received in 2021 for the third stimulus. Once this section is completed you can check to see if an amount is populated on your tax return. Follow the instructions below.
You can view your entire return or just your 1040 form before you e-file:
If you are referring to the advance child tax credit (ACTC) you will also reconcile this on your 2021 tax return under Deductions and Credits. You can check on the IRS portal and/or use your 6419 IRS letter for the amounts you received in advance. The balance will be reconciled on your tax return.