Trying to Amend 2021 Taxes and taxes applied have changed?

[AliciaP1 · Accepted solution]

I did review your taxes and you do not need to amend your returns either way.  The threshold was not $150,000 for eliminating the credit, only reducing it.  Your percentage of reduction was 0.1% which calculates to $3 (rounded).  This is the most they can be asking for as payback if you were entitled to take the credit on your tax return.  If you checked your account via the link I provided and confirmed the IRS does not show you received the 3rd stimulus payment (2021 payments were the 3rd payment), you need to respond to the letter that you correctly claimed the credit on your tax return.  The letter has a section about if you disagree and wish to respond.  You need to compile the proof of information and respond according to that guidance. 

If the issue is that you actually did not receive the 2nd stimulus payment (made in late 2020), you need to amend your 2020 tax return and can see Recovery Rebate Credit for more information on claiming it.  You will, however, need to repay the 3rd payment as requested in the letter as the IRS will not just "transfer" the credit amount between years or payments.

@LUCKYK61 

[LUCKYK61]

After again reviewing the IRS letter we received....it definitely is the STIMULUS payment.  Because they show the same calculations for taxable income as before...but what changed is the credit.....disallowed the Stimulus Credit So, it doesn't look like it is the taxes that were incorrectly calculated by Turbo Tax the first time around like I thought,So.......

 How do I amend using TURBO TAX (Deluxe Edition) to calculate that credit and the taxes correctly?  I have amended it, to include the business deductions and entered the Stimulus ($2800) back in the right place...but after just entering that little bit of business deduction, which lowered our AGI to $149,806, below the Stimulus threshold of $150,000 to claim credit, it lowered our taxable income to $123,656 BUT shows now that we owe $988.  It jumped our taxes from $18,105 to $18,701?  Now showing we owe $988?  Wouldn't those taxes decrease because our Taxable income decreased?  Nothing else changed..... we added that small business deduction.   This is what it looks like on the AMENDED return.

AMENDED AGI $149,806  (Original $150,010)
Taxable Income Correct Amount  $123,656.00  (Original $123,819)

Total Tax Correct Amount  $18,701.00  (Original taxes $18,105)

Total Payments/Credit Correct Amount  $18,105.00   (Original $16,962) Both amounts include the $1,143 we paid in with original return.
Payment Due  $988.00   (Original $1,143.00)   

On the IRS letter it shows they disallowed the $2800 Stimulus Recovery because our AGI was $10.00 above the allowed AGI. 

Can anyone help?  I have less than 10 days to get this corrected with the IRS per the IRS deadline date.

[LUCKYK61]

Thank you for your quick responses.  for But I am a little confused.  It was the 3rd payments we didn't receive.

In my letter from IRS it states The IRS changed the Recovery Rebate Credit because one of the following:

-The SS number of one or  individuals claims as a qualifying dept was missing or inaccurate.  

       (We have no dependents)

-The last name of one or more individuals claimed as a dependent doesnt match our records.

      (We have no dependents)

-One or more individuals claimed as a qualifity dependent exceed the age limit.
      (We have no dependents)

-Your adjusted gross income exceeds $75,000 ($150,000 if married filing jointly,$112,500 if head of hh

-The amount was computed incorrectly.

Refer to an early response to this to see the breakdowns.  It is clearly the STIMULUS Payment...that we never received.  Maybe I should call the IRS?

-

[LUCKYK61]

After a long evening on hold with the IRS...it looks like the issue might be getting resolved.

Even though it doesn't show on their website in our records...they show that we received the Stimulus payment in 2021.So they asked me to complete and fax a 3911 Form.  They have to do a trace on the payment to see if it actually remitted.  It would have been a direct deposit.  I went back thru all our bank statements for 2020 to current and it never made it.  So hopefully this issue with the IRS will get resolved.  Thank you to the tax professional ALICIAP1 for taking the EXTRA step to review my taxes and help me with this issue..you have no idea how grateful I am to you!