Stimulus Checks as a credit

[MaraNicole]

Good evening,

On the IRS website it says the following on stimulus checks and tax refunds:

“No, the Payment is not includible in your gross income.  Therefore, you will not include the Payment in your taxable income on your Federal income tax return or pay income tax on your Payment. It will not reduce your refund or increase the amount you owe when you file your 2020 Federal income tax return.”

If this is correct, how come the stimulus checks that I received so far are being deducted from my tax refund when I use the online tax refund calculator? When I enter the amount that I received it lowers my refund with the same amount. When I enter “$0” I receive an unchanged refund.

This would mean the stimulus check is an advanced tax refund and not a credit as they say on the IRS website.

I hope someone can explain how this works.

[xmasbaby0]

If you are using the recovery rebate credit to get the stimulus amounts---remember that credits are used to reduce tax you owe first.   So if you owe tax, the credit will be applied to the tax you owe, and you will only receive the rest  (if any)    as a refund.   It is not being taxed---it is being used to PAY tax you would have owed otherwise.

[MaraNicole]

I already received them, but I have to file my tax return and the online TurboTax calculator deducts the stimulus checks that I received last year from my tax refund. According to the IRS website the stimulus amounts that I received should not decrease the tax refund.

[xmasbaby0 · Accepted solution]

You might have become confused by the flow of information in the software.   That "refund monitor" on your screen displays a "refund" amount that includes the stimulus money. as part of your 2020 refund.  The software starts off by giving you the stimulus money.   But later when you enter the amount of stimulus you really received already, it removes the stimulus already given to you.   And it looks to you like you "lost" your refund,   But ---you do not get the same stimulus money twice--that is why it came out.

Look on line 30 of your Form 1040 for your recovery rebate amount.

https://ttlc.intuit.com/questions/1901539-how-do-i-preview-my-turbotax-online-return-before-filing

Click on Tax Tools on the left side of the screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.