TurboTax incorrectly states I am eligible for full amount of stimulus payments

[jwdf]

TurboTax says I'm eligible for the maximum amount of both the first- and second-round stimulus payments, but my husband and I were only partially eligible for the first and above the phase-out AGI for the second (therefore eligible for $0).

Your help text said "If you got less than what we've calculated, you'll get the Recovery Rebate Credit on this year's tax return to make up for it."

How do I make sure this is not incorrectly applied as a credit? We received the appropriate stimulus amount based on our AGI.

[rjs]

The stimulus payments that you received were calculated based on your 2019 or 2018 tax return. But those payments were an advance on the credit on your 2020 tax return. The Recovery Rebate Credit is calculated based on your 2020 tax return. Are you eligible based on your 2020 AGI? If so, you get the credit for the additional amount that you did not receive in the earlier payments.

Did you correctly enter the amount that you received for each payment?

[jwdf]

@rjs, Yes, I correctly entered the amount for both rounds.

My first-round payment was based on my 2018 AGI (since I filed my 2019 taxes after it went out) and was a pro-rated amount less than $2,400; we were above the AGI to receive the full stimulus amount, but still below the phase-out threshold.

My husband and I were not eligible for the second-round stimulus according to my 2018, 2019, or 2020 AGI.

Our 2020 AGI is higher than our 2018 and 2019 AGI. We have no dependents.

The error is with the TT software. How do I ensure that I don't receive an incorrect credit? According to this FAQ (https://www.irs.gov/newsroom/recovery-rebate-credit-topic-b-eligibility) we are not eligible.

Thanks.

[rjs]

Since I can't see your tax return, I can't tell what's going on without more information. When I do a test tax return for the situation that you describe, TurboTax calculates the Recovery Rebate Credit correctly.

In your original question you said that TurboTax said you were eligible for the maximum amount of both stimulus payments. That makes it sound like it's not using the correct AGI. Please look at line 11 of your Form 1040 in TurboTax. That's your AGI. Is it what you think it should be? Is it $198,000 or more? (For married filing jointly, the end of the phase-out range is $198,000 for the first payment and $174,000 for the second payment.)

You didn't say whether you are using TurboTax Online or the CD/Download TurboTax software. If you are using the CD/Download software, make sure there are no overrides anywhere in your return. An override can cause the calculations to break in unexpected ways, even if the override is in a place that you think has nothing to do with the problem. Occasionally people create an override accidentally by pressing Ctrl-D without realizing it.

Are you able to look at the Recovery Rebate Credit Worksheet in TurboTax? If so, please check the following lines on the worksheet. Are they all correct?

• Line 11 should be your AGI (from Form 1040 line 11).
• Line 12 should be $150,000.
• Line 16 should be the amount that you received for the first stimulus payment.
• Line 19 should be zero.

In your next reply, please say whether you are using TurboTax Online or the CD/Download TurboTax software.

[jwdf]

@rjs Thanks for your reply.

Our AGI looks to be correct. It is less than $198,000 but more than $174,000 — so we were indeed eligible for a portion of the first-round stimulus (and received more than $0, but less than $2400), and ineligible for the second-round stimulus (and received $0).

TT continues to tell us we were eligible for $2,400 and $1,200, respectively.

We are using TurboTax online. I downloaded all forms/worksheets from the print center, but do not see the Recovery Rebate Credit Worksheet. Can I access that from the online version? 

Is Line 30 of my 1040 the area I need to check for an incorrectly applied credit? 

[DMarkM1]

The Recovery Rebate Credit worksheet should be part of the all forms/worksheets download.  Yes, line 30 is the Recovery Rebate Credit amount that has been added to your return.

[rjs]

The Recovery Rebate Credit Worksheet should be near the end of the federal return in the PDF. The credit from line 21 of the worksheet goes to line 30 on Form 1040. Do you have an amount on Form 1040 line 30?

[jwdf]

Thanks. I just downloaded all forms (both federal forms and TT forms) and there is no Recovery Rebate Credit worksheet there. 

In the "review" stage, TT keeps asking me if I am sure I entered stimulus amounts correctly since it still insists I'm eligible for the full amount. 

As long as my Line 30 on my 1040 is blank or 0, I should be fine, right?

[rjs]

---

@jwdf wrote:

In the "review" stage, TT keeps asking me if I am sure I entered stimulus amounts correctly since it still insists I'm eligible for the full amount. 

As long as my Line 30 on my 1040 is blank or 0, I should be fine, right?

---

Yes, if Form 1040 line 30 is blank or zero then the tax return is correct and everything is okay. I don't know why you're getting that message in the review, but if line 30 is blank or zero the message is just a problem in the interview, and it's not affecting the tax return.

[ECC0]

Confirming similar issue with CD version.  CD version did not prompt at all for any stimulus questions.  We understand we may have been eligible but didn't receive a stimulus, the CD version did not prompt or provide any area to check for stimulus.  Spoke live to support, screen shared, they could not provide an answer so sent us to the community and processed a refund request.  Then a week later denied the refund request.  

[AmyC]

The IRS says you can file for missed 2021 stimulus on your 2021 return and any missed 2020 stimulus on your 2020 return. See 2020 Recovery Rebate Credit — Topic G: Correcting issues

All of the experts have the downloaded software version. We all test the software and try to break it before tax season gets underway. The federal review asks about the stimulus received. There is always a chance of some technology issue causing a corruption and creating an issue for you alone. I am sorry that you have experienced this issue. You should be able to have a new version pushed to you if you can prove the purchase. Another option would be to return it to the retailer for an exchange of CD. How frustrating for you.

[Edited 4/22/2021 |7:05 pm PST]

[NCperson]

@AmyC - actually the IRS is NOT checking for stimulus due to you !!!! 

if Line 30 is overstated, then they are checking and reducing the refund - plenty of examples of that on these board. The IRS is protecting its own 'piggy bank!'

if Line 30 is UNDERstated, THEY ARE DOING NOTHING and it would require an amendment!!!! 

From IRS.GOV FAQs 

Q G1. I'm eligible for a 2020 Recovery Rebate Credit but did not claim it on my 2020 tax return. Do ...

A1. If you didn't claim the credit on your original tax return, you will need to file an Amended U.S. Individual Income Tax Return, Form 1040-X. The IRS will not calculate the 2020 Recovery Rebate Credit for you if you did not enter any amount on your original tax return.

You can use the Interactive Tax Assistant, Should I File an Amended Return?, to help determine if you should amend your original tax return.

If you need to file an amended return to claim the Recovery Rebate Credit, use the worksheet on page 59 of the 2020 instructions for Form 1040 and 1040-SR to determine the amount of your credit. Enter the amount on the Refundable Credits section of the 1040-X and include "Recovery Rebate Credit" in the Explanation of Changes section.

If you filed your 2020 return electronically and need to file an amended return, you may be able to file Form 1040-X electronically.

If you did not file your 2020 return electronically, you will need to submit a paper version of the Form 1040-X and should follow the instructions for preparing and mailing the paper form.

Those filing their Form 1040-X electronically or on paper can use the Where's My Amended Return? online tool to check the status of their amended return.

[VolvoGirl]

@ECC0   

If you did not get prompted to enter your stimulus information, that means you either:

1. Filed as a dependent being claimed on another tax return, or 
2. have an AGI too high to claim the recovery rebate

To get to the stimulus questions in TurboTax at any time, you can search for stimulus and use the Jump to link.  Generally, if you have adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses, you will receive the full amount of the recovery rebate.  For filers with income above those amounts, the payment amount is reduced. 

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.

If you didn't get one or both of the Stimulus payments or qualify for more it will be the Recovery rebate credit on 1040 line 30.  It either adds to your refund or reduced a tax due.

[NCperson]

@ECC0 - to save you a potential headache, please answer these questions and I can tell you whether TT was wrong or you are not due anymore stimulus (I suspect the latter).  if TT was wrong these boards would 'blow up' with complaints

1) how much did you receive for EACH of the 1st two stimulus payments

2) what is on Line 11 of your 2020 tax return?

3) what is your 2020 filing status (married, single, etc)

4) how many dependents did you claim that are under the age of 17 as of 12/31/20.

if you 2020 AGI is over $99,500 (single filing) or over $198,000 (married - joint) you are certainly not due anymore stimulus and TT would not even have asked you about it. 

[ECC0]

1) how much did you receive for EACH of the 1st two stimulus payments

- Never received anything, but our understanding is the initial stimulus was based on 2019 filings which should have resulted in us getting something.  Again, there were no prompts of any kind from the CD solution for anything at all stimulus related. 

2) what is on Line 11 of your 2020 tax return?

89211

3) what is your 2020 filing status (married, single, etc)

single

4) how many dependents did you claim that are under the age of 17 as of 12/31/20.

0

Related I was on hold for IRS last week, and the TT facebook site is "blowing up" with others have issues including folks who actually got through to the IRS being shared many of TT's users submissions are requiring review due to errors with this line 30 item resulting in kick backs.  Check it out.  Used TT for years, never a problem, but this year a problem for sure.  Related, TT refused to refund, haha, well within 60 days, no help.