Recovery Rebate Credit 2021

[NCperson]

@chasator1 

ps - there is no need to amend your tax return; just pay the amount the IRS requested.

[Pat2212]

What is this?  I got $1400 less in my rebate due to the IRS subtracting it.

[DoninGA]

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@Pat2212 wrote:

What is this?  I got $1400 less in my rebate due to the IRS subtracting it.

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If your refund is short $1,400 then that is because you said you did not receive the 3rd stimulus payment and the IRS has records that show you were sent the 3rd stimulus payment so they removed the $1,400 Recovery Rebate Credit that was entered on Form 1040 Line 30.

Go to this IRS website for your tax account to see if the 3rd stimulus payment is entered - https://www.irs.gov/payments/your-online-account

If you checked your bank account in the March - May 2021 timeframe and there is not a $1,400 EIP3 payment from the IRS then go to this IRS website for how to start a trace on the payment - https://www.irs.gov/newsroom/questions-and-answers-about-the-third-economic-impact-payment-topic-j-p...

[sas52]

So i submitted my tax return and turbotax said i was eligible for recovery rebate credit. I don't know if turbotax was using taxable income which was $131000+ However my AGI was over $158000.  IRS said that I am not eligible for Recovery Rebate Credit and now I owe money and fines.  I believe TurboTax has some responsibility as this was an automated solution by turbotax. I had not purchased audit protection as turbo tax said that there was small chance of audit

[NCperson]

@sas52 - 

(I am assuming you filed "joint")

1)what is on Line 30 of Form 1040? 

2) did you receive the 3rd stimulus last MArch - May, 2021?  Please look in your bank account statements to verify what you received.  Do not do this from memory! 

3) you were asked during the Turbo Tax interview process how much you received already for the 3rd stimulus

4) The way Line 30 works is it calculates the Recovery Rebate you are entitiled to (and if Line 11 of Form 1040 was $158,000, then you were entittled to ~$560 for a joint return, assuming no other dependents) LESS what you already received. 

5) if you did not enter the EXACT amount that the IRS sent you last year (see my 2nd question above), the IRS will adjust Line 30 to match its records.  That reduces your refund or increases what you are due.

You are correct that this was an automated solution from Turbo Tax, but it was dependent on the user entering the correct amount received.   If the correct amount received was not entered, that is a user error and not a Turbo Tax error....

does that make sense? 

[sas52]

line 30 had $336

i reviewed all the bank staements and i do not see a deposit from IRS or any unusual deposit

i have 2 letters from IRS that says that i am eligible for $438.20 and my wife is eligible for $438.20 and when i logged into IRS they said I should filll in $438.20 on liine 30

[VolvoGirl]

Line 30 is only if you didn't get the full amount or qualify for more. The 6475 letters were telling you what the IRS sent you.  You should have received the total of both  for 876.40 deposit.  Double check your bank statements again and Check your IRS account (both accounts if married)

Your Online Account | Internal Revenue Service

If the IRS thinks they sent it to you but you didn't get it request a trace for a missing third Stimulus payment

https://www.irs.gov/newsroom/questions-and-answers-about-the-third-economic-impact-payment-topic-j-p...

[NCperson]

@sas52  here is what i think occured: 

When you filled out the Turbo Tax inteview process, I suspect you responded that you didn't receive anything.  And if your joint income (no dependents) was about $158,800 (look at Line 11 of Form 1040), the Recovery Rebate would have been calculated as $336.  THerefore that is what ended up on Line 30.  

But the IRS records are that they sent you $876.40.  Those 2 letters: they should be Letter 6475 and state that you received $876.40 ALREADY.  

Therefore since you received more than you were eligible for, the IRS adjusted Line 30 to zero.  Note: by law, you are not required to return stimulus if you received more last spring than what you are now eligible for.  

Suggestions:

1) go back to your bank statements from last March - May, 2021 and see if there was a deposit for 876.40 from the IRS.  if yes, then all is good.  You received what you were entitled to and the IRS adjusted your return. 

2) If you have no record of receiving the $876.40, despite the fact the IRS records indicate they sent it to you, you'll have to complete and send in a 'trace' form to the US Treasury to reconcile the issue.

https://www.irs.gov/pub/irs-pdf/f3911.pdf

[sas52]

all that makes sense.  Then why do I owe $3000 not $300

[NCperson]

@sas52 - I'll need more information to answer that question

1) what was the EXACT amount of the IRS adjustment?

2) what was on Line 30 of Form 1040? you stated above that it was $336

3) what was on Line 28 of Form 1040?  if this line is other than zero, what is on LIne 14f of Schedule 8812?  

[sas52]

1. 3182.23

2. 336

3.  0

[VolvoGirl]

@sas52  I don't think you said but on your original return did you have a refund online 35a or a tax due on line 37?  

[sas52]

tax due line 37

[VolvoGirl]

How much is on line 37?  How did you pay it?  The IRS added the 336 to it so you still owe the total.  

Your only proof of payment is your bank statement or credit card showing the payment coming out.  Turbo Tax only passes your bank account number to the IRS or state for them to take it out of your account.  (Most states do not let you pay by Direct Debit so you have to mail in a check or go directly to the state's website to pay).  And some banks use different routing numbers for deposits and payments.  Double check the number you entered with your bank.

[76shauna]

Hi! I received a notice from the IRS (notice name CP12) for the 2021 tax year. They said they found an error on my 2021 form 1040 which affected my recovery rebate credit. Here’s the issue… my ex (never married, lived separately since 2015, and have a custody agreement where I was to claim our 8year old for 2021).  He ended up receiving the notice/form 6475 as he received part of the credit that he should not have ($428.00), before he could actually stop the credits/payments to him. I claim our child in odd years and he claims in even years. TurboTax said I qualified for the credit but I think because my ex received part of all of the last credit and got the 6475, the the irs reduced my recovery rebate credit. Turbotax calculated my return saying I was due more but the irs reduced it. How do I fix/address this with my 2022 return? I should have received that credit for 2021, but I didn’t because it seems they went off of a prior year return where he had claimed her and hence, that’s why he received the 6475. Any guidance would be most appreciated