2021 Economic Rescue Plan

[Alf521995]

When I put in the $2800 that my wife and I received in 2021 from the third stimulus I go from receiving a refund to owing taxes.  According to the letters we received from the IRS this should not affect my taxes.

Now sure what is happening?

[ColeenD3]

You are not paying tax. The information you entered is just to allow you to claim the stimulus had you not already gotten it. The program assumes you did not get it until you tell it that you did.

[Alf521995]

Do I have to put the  amount in there that I received?

[Alf521995]

Before I put that amount in the form I have a refund, once I put that amount in the form I then owe additional taxes?  

[Vanessa A]

Yes, if you do not the IRS will make changes to your refund and deduct the amount that they sent you. 

[JamesG1]

You are given credit for the third stimulus check/recovery rebate credit very early in the software.  Maybe it will help if you can see the process.

The computation of the Recovery Rebate Credit is a two-step process.  You are able to observe what is happening at each step on line 30 of your Federal 1040.

Early in the program, TurboTax software computes whether you qualify for the $1,400 third stimulus check and gives you immediate credit for the third stimulus check. 

You are able to view this Recovery Rebate Credit on line 30 of the Federal 1040 under Tax Tools / Tools / View Tax Summary / Preview my 1040.

You enter the third stimulus check actually received at the screen Let's double-check the amount you received. 

Then the Recovery Rebate Credit on line 30 becomes $0.  You may also view this under Tax Tools / Tools / View Tax Summary / Preview my 1040.

[Alf521995]

Before I put in the stimulus money in the Let's Double Check the amount you received the program shows a $1500 rebate.  When I enter the correct amount the program goes from a rebate to a $1,300 tax owed? 

[LenaH]

Before you put in the stimulus money you received, TurboTax was giving you the Recovery Rebate Credit. The Recovery Rebate Credit is calculated into your overall tax refund and will either increase a refund or decrease the amount of tax owed. After you put in the amount you already received, it eliminated the credit, which in turn gave you a balance due. 

@Alf521995