My third stimulus payment 2021 of $5600 increasing my federal taxes by $5600 from $1750 to $7350. I thought it should not. Is it right?

[LenaH]

Yes. Stimulus checks are not taxable. Before you entered your stimulus check received, TurboTax was likely giving you the Recovery Rebate Credit, which lowered the amount of tax due. The Recovery Rebate Credit is for taxpayers who did not get the third stimulus payment and are eligible based on their 2021 tax return. However, once you entered the amount of stimulus payment received, it eliminated the credit. In return, this raised the amount of tax due. 

[bychkovo]

I don't understand how $5600 are not taxable. My federal tax goes by $5600 as soon as I answer yes that I received $5600 as stimulus payment. It looks 100% taxable to me. I have to pay the whole stimulus amount of $5600 back and in my case the whole stimulus business is complete bs. 

[LoganathanB]

TurboTax keeps calculating your tax refund/balance due as you enter the information.

TurboTax calculates your refund adding the recovery rebate credit to your refund. 

When you answer the question about whether you received the stimulus and if you answered yes, then the recovery rebate credit is reduced to 0 and your taxes go up by the amount of stimulus received.

[VolvoGirl]

It is not taxable and you aren't paying it back.  Your 2021 return starts out by assuming you didn't get any Stimulus payments so it gives you credit for the full amount and your refund was too high.  Then near the end you enter how much you actually got so it only gives you the difference if any.  So you don't get it again.

Look at your tax return.   It is not added as income anywhere or subtracted anywhere.  The Recovery rebate credit on line 30 is only if you didn't get the Stimulus payment or qualify for more.

Then if you try to claim it again on line 30 but the IRS already sent it to you they will take it off your return and reduce your refund or send you a bill.  Line 30 is only if you didn't get the full amount or qualify for more. 

Before filing,  You can preview the 1040 or print the whole return

https://ttlc.intuit.com/community/accessing/help/how-do-i-preview-my-turbotax-online-return-before-f...