MY FEDERAL RETURN AMOUNT IS REDUCED WHEN I INSERT MY FEDERAL STIMULUS. ONLINE CHATTER NOTES THAT THE STIMULUS IS NOT TAXED. WHY IS THE REFUND REDUCED?

[1428reggiec]

IS ANYONE ELSE EXPERIENCING THIS PROBLEM?   WHAT IF I DON'T DECLARE THE STIMULUS SO THAT I CAN GET A HIGHER REFUND?

[CatinaT1]

Before you enter the amount of the stimulus payments at the screen Did you get a stimulus payment?, you have been given the full Rebate Recovery Credit (the equivalent of the two stimulus payments) as part of your refund.   This can be found on line 30 of the 2020 Federal tax return.  At this point, this is an 'incomplete' Rebate Recovery Credit. 

The refund monitor on your screen displays a refund amount that includes the stimulus money as part of your 2020 refund.   When you enter the amount of stimulus you received, the refund monitor adjusts to account for this. 

  

See this TurboTax Help. 

  

This TurboTax Help states that the Economic Impact Payments (both the first and second) are not considered income, and therefore are not taxable. 

[missy1214]

Can you specify what amount I should be seeing on line 30? Mine is blank and same scenario here as the original post, however, mine was only reduced by the amount of the second stimulus? Something doesn't seem quite right.

[KathrynG3]

If you need to report that nothing was received for the second stimulus, you must enter -0- in the second stimulus payment box.

The amount that should be seen on Line 30 for the Recovery Rebate Credit would reflect any eligible amount that has not been paid already.

To check what was entered or to edit the entries in TurboTax, follow these steps:

1. Go to the search box and enter stimulus. Click the Jump to link.
2. Answer Yes.
3. At the next screen, Let's double-check the amount you received, answer No to edit the first-round and second-round amounts.
4. If no stimulus amount was received, enter 0. An amount must be entered in each box. When finished, click Continue.

For the most recent IRS updates, see:

Coronavirus Tax Relief and Economic Impact Payments

Recovery Rebate Credit Frequently Asked Questions | Internal Revenue Service