We had a child this year, but I alternate years to claim another child with my ex, so my recovery rebate credit dependents=1, instead of 2 that I qualify for, HOW TO FIX?

[CatinaT1]

The Recovery Rebate Credit is calculated based on the dependents you actually claim in 2020.

According to the IRS, parents who are not married and alternate claiming of a child dependent, "The parent who claimed their child on their 2019 return may have received an additional Economic Impact Payment for their qualifying child. When the parent who did not receive an additional payment files their 2020 tax return next year, they may be able to claim up to an additional $500 per-child amount on that return if they qualify to claim the child as their qualifying child for 2020."

This only references the one stimulus payment but would apply to both.

This is referenced in the last paragraph under Claimed dependents are not eligible for an additional $500 payment in this article:  Why the economic impact payment amount could be different than anticipated

This will all be done by claiming the Rebate Recovery Credit on your 2020 return.

[brandon-yahr]

I understand. Each parent is eligible for the dependent (A) that alternates years. The real issue here is that I had an additional dependent (B) this year. Because the rebate is based on # of dependents and not the social security number of the dependents, the rebate worksheet calculates 1 dependent. But, I have 2 dependents that I am eligible to receive the stimulus payment for (dependent (A) from 2019 and dependent (B) from 2020). I cant be the only person in this situation... 

[CatinaT1]

You are not the only person in this situation.  It is not based on social security number.  

The payments were an advance credit for 2020.  2019 information was used in sending out the payments since 2020 tax returns had not been filed at the point the stimulus payments were sent out.  They are being reconciled when you do your 2020 return.  In some cases, people may have been given a stimulus payment based on their 2019 dependents that did not qualify based on their 2020 dependents, and vice versa. 

In your particular case, you received a stimulus for 1 dependent based on your 2019 return.  Now that you are filing your 2020 return, you only have 1 dependent and you received the stimulus already for 1 dependent.  If you were claiming the other child still in 2020, you would have 2 dependents and would qualify for the rebate recovery credit.

[brandon-yahr · Accepted solution]

Ok, so the work around recommended by the IRS is to adjust the number of dependents you are multiplying by in the Recovery Rebate form. In my case this would be changing line 6 on the form from 1x500 to 2x500. However, turbotax software auto populates that amount and it is unable to change. So speaking with a turbo tax phone rep, we determined the way to work around the software is to adjust the amount received in your EIP by this amount (line 16 = actual amount received - 500). This works, it calculates the correct rebate amount as if I filled out the form the way the IRS suggested. It's not going to end here, realize the return will be flagged at some point when the numbers don't match, so document the workaround and fill out the worksheet to calculate the appropriate rebate and double check that matches the turbotax output, prepare a letter explaining the adjustment and why now while everything is fresh and store it somewhere safe :).  Good luck to everyone else in this situation. 

[Lwakeley09]

Omg thank you I’m in this exact situation