Error detected by the IRS on 2021 Form 1040

[Panchirolis]

Hello all,

I have received a letter from the IRS saying that there have been an error on my 2021 Form 1040 which affects the following area of my return: Recovery Rebate Credit.

The IRS has changed my return to correct the error and now I have to pay $989.33.

I filled my taxes with your support, so I need your help to check what are they talking about and confirm if this is a valid error or not.

If you want a copy of the document, give an email address to forward you it.

Thank you.

Francisco Rivas

[email address removed]

[DoninGA]

If your refund is short then that is because you said you did not receive the 3rd stimulus payment of $1,400 per person and the IRS has records that show you were sent the 3rd stimulus payment so they removed the 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 are Married Filing Jointly also check your spouse's tax account.

If you checked your bank account in the March - May 2021 timeframe and there is not a 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...

[Panchirolis]

I found that I received $ 1800 on March 2021 but then I have received a letter from the IRS saying that the taxes were calculated incorrectly and I had to pay $ 3614.53 on 07/19/2021.

So I did receive the stimulus but the the IRS asked me to return back and I don't know why. For me this is not correct because the stimulus was to help people and in my case, they didn't help me because I had to send that money back.

At the end, should I pay the $989?

Thanks

Francisco Rivas

[VolvoGirl]

@Panchirolis   I think you are getting the 3 Stimulus checks mixed up.  If you paid more tax in July 2021 that was for your 2020 tax return.  

$1,800 could have been the second Stimulus payment for 3 people (600x3).  That went on your 2020 return.  

And you are not paying it back and it is not taxable.  But it sounds like you tried to get it again on your tax return on line 30.  Line 30 is only if you didn't get the full amount or qualify for more. 

Here are the 3 Stimulus payments.....

EIP1 The first Stimulus payment was 1,200 for each spouse and 500 for each dependent under 17.  Came out in spring of 2020.

EIP2 The second Stimulus was 600 per person and dependents under 17. The 2nd stimulus checks started going out at the very end of December 2020 and continued into January/Feb 2021.

The first 2 Stimulus payments went on your 2020 return even if you got the second one in Jan/Feb 2021.

EIP3 The 3rd Stimulus payment started going out in March 2021 and is for 1,400 for each person listed on your tax return, no age limit. The IRS used your 2020 (or 2019) return to send the checks out fast. If your 2021 return changes and you qualify for more you can claim the extra as the Recovery Rebate Credit on 1040 line 30. But line 30 is only if you didn't get the full amount or qualify for more. Not the amount you already got. The IRS also sent out letter 6475 to tell you how much they sent you . If you are married then each spouse should get a letter for half.