IRS reduced the refund by the recovery rebate amount tax year 2021

[mawenninger]

I recently did my father's taxes with Turbo Tax.  His taxes are straight forward so I followed the guides.  Made sure I added in the $1400.00 recovery rebate in the program.  I submitted his taxes and noticed the IRS reduced his refund for the exact amount of the rebate.  This same thing happened last year so my question is why is Turbo Tax not calculating the correct amount because if memory serves the default was $1400.  I know for a fact he received the $1400 because IRS sent a letter and he confirmed his deposit with his bank.  Please advise because I want to make sure his taxes are correct and that I don't need to file an amended return.  Thanks

[DoninGA · Accepted solution]

Look at the Form 1040 Line 30.  If there is an amount of $1,400 entered then the 3rd stimulus payment was reported as not being received.

[mawenninger]

So I checked and you were correct.  I also went back through the guide and was prompted for the amount.  I don't remember seeing that screen when I did the taxes the first time.  Anyways thanks for the information it was very helpful.

[Marti Ray1]

May I ask an additional question.  I received 2 stimulus checks but never receive a third so I indicated that I did not receive the 3rd stimulus check I believe after reading your post that is the difference in my return what does on do if they never received a 3 check but the IRS is indicating  that I did?  thanks

[DoninGA]

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@Marti Ray1 wrote:

May I ask an additional question.  I received 2 stimulus checks but never receive a third so I indicated that I did not receive the 3rd stimulus check I believe after reading your post that is the difference in my return what does on do if they never received a 3 check but the IRS is indicating  that I did?  thanks

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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...

[cfb3]

Turbo Tax said I should get a refund much larger than IRS accepted. I have reviewed all the information I filled in and it is correct. After reviewing what it should be I have to agree with IRS. Turbo Tax calculated it wrong or did not ask the questions correctly that would lead to the right answer.

[bigalburger]

I have the same question. Filed and Turbo Tax calculated a certain amount then the IRS sent a letter saying they think we should get less. How do we contest their assessment so we can get what Turbo Tax calculated?

[DoninGA]

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@bigalburger wrote:

I have the same question. Filed and Turbo Tax calculated a certain amount then the IRS sent a letter saying they think we should get less. How do we contest their assessment so we can get what Turbo Tax calculated?

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If your refund is short 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 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...

[VolvoGirl]

How much did the IRS reduce it?  The 2 most common reasons this year is you entered the wrong amount on line 30 for the Recovery Rebate Credit (3rd Stimulus payment) or line 28 for the Child Tax Credit.  Those lines are just if you didn't already get the full amount or qualify for more.  The IRS knows what they already sent you.  

A lot of people answered the questions wrong and tried to claim the credits again.  Double check your bank statements and Check your IRS account to see when and what they sent you (check both spouse's accounts if married)

Your Online Account | Internal Revenue Service

[NCperson]

@bigalburger - there was a point in the interview process where you were asked how much you received ALREADY for the Recovery Rebate Credit (a.k.a. 3rd stimulus payment) and if you have children, for the Advance Child Care Credit.  

The IRS knows how much they sent you.

if you understated what you received and that did not EXACTLY  match what the IRS knows they sent you, Line 28 and / or Line 30 was reduced so they match.