Recovery Rebate Credit 2021

[VolvoGirl]

@badams_taxes   Oh you did get letter 6475?  So you already did get the 3rd Stimulus Payment.  How much did you get?  Check your bank deposits.  Because if your income is over 150,000 it is phased out and you only qualify for $2,548.  But the IRS is saying you already got it.  You can't get it again on line 30.  

Turbo Tax started out giving you the Recovery Rebate Credit for 2548  (or 2593) on line 30.  So your Refund was artificially too high.    Then at the end you enter what you already got from letter 6475 and it subtracts it.    Line 30 is not for what you already got.  Line 30 is only if you didn't get the full amount or qualify for more.  Sorry Turbo Tax is right.  

[badams_taxes]

 I just received Letter 6475, and no, I did not get the Third Stimulus Payment. I checked my bank deposits, looking at the First and Second Stimulus Payment, not the Third Stimulus Payment.

Please read below what the IRS posted about the Third Payments Differed from Previous Economic Impact Payments.

 

https://www.irs.gov/coronavirus/third-economic-impact-payment

Eligibility

Payments were phased out – or reduced – above those AGI amounts. This means people did not receive a payment if their AGI was at least:

• $160,000 if married and filing a joint return or if filing as a qualifying widow or widower
• $120,000 if filing as head of household
• $80,000 for any other filing status

Most eligible people didn't need to take additional action to get a third payment.

Generally, someone was eligible for the full amount of the third Economic Impact Payment if they:

• are a U.S. citizen or U.S. resident alien (and their spouse if filing a joint return), and
• are not a dependent of another taxpayer, and
• had adjusted gross income (AGI) that is not more than:
• $150,000 if married and filing a joint return or if filing as a qualifying widow or widower
• $112,500 if filing as head of household or
• $75,000 for any other filing status

Payments were phased out – or reduced – above those AGI amounts. This means people did not receive a payment if their AGI was at least:

• $160,000 if married and filing a joint return or if filing as a qualifying widow or widower
• $120,000 if filing as head of household
• $80,000 for any other filing status

Amount of Third Economic Impact Payment

The third Economic Impact Payment amount was:

• $1,400 for an eligible individual with a valid Social Security number ($2,800 for married couples filing a joint return if both spouses have a valid Social Security number or if one spouse has a valid Social Security number and one spouse was an active member of the U.S. Armed Forces at any time during the taxable year)
• $1,400 for each qualifying dependent with a valid Social Security number or Adoption Taxpayer Identification Number issued by the IRS

Getting Your Payment

Most eligible individuals received their third Economic Impact Payment automatically and didn't need to take additional action. The IRS used available information to determine your eligibility and issue the third payment to people who:

• filed a 2020 tax return
• filed a 2019 tax return if the 2020 tax return had not been submitted or processed yet
• did not file a 2020 or 2019 tax return but registered for the first Economic Impact Payment with the Non-Filers tool in 2020
• registered through the 2021 Child Tax Credit Non-filer Sign-up Tool
• are federal benefit recipients who do not usually file a tax return.

Third Payments Differed from Previous Economic Impact Payments

The third payments differed from the earlier payments in several respects:

• Income phaseout amounts changed. Payments were reduced for individuals with adjusted gross income of more than $75,000 (or $150,000 if married filing jointly). The reduced payments ended at $80,000 for individuals and $160,000 for married filing jointly. People above these levels did not receive any payment.
• Payment amounts are different. Most families received $1,400 per person, including all dependents claimed on their tax return. Typically, this means a single person with no dependents received $1,400, while married filers with two dependents received $5,600. 
• Qualifying dependents expanded. Unlike the first two payments, the third payment was not restricted to children under 17. Eligible individuals received a payment based on all of their qualifying dependents claimed on their return, including older relatives like college students, adults with disabilities, parents and grandparents.

[VolvoGirl]

If you got letter 6475 then the IRS is saying you  did get the 3rd Stimulus check EIP3.   You can't find a bank deposit for that amount?  If you are married they send letter 6475 to each spouse for half.    You don't need to post all the IRS info.  We know it.  They sent the 3rd Stimulus based on your 2020 return to get the checks out fast.  But it is really based on 2021, so the Recovery Rebate Credit could be more or less.  

If you got letter 6475 but did not get the 3rd payment that came out starting in March 2021 last year then you need to put a trace for the missing third Stimulus payment
https://www.irs.gov/newsroom/questions-and-answers-about-the-third-economic-impact-payment-topic-j-p...

[Ldoane1968]

Why do I owe the IRS 1400.00?

[xmasbaby0]

@Ldoane1968 Not sure what you mean.   If you already received the $1400 stimulus check last year then you cannot get it twice.   Lots of people have been making mistakes on their 2021 tax returns by saying they did not receive the $1400 and then the IRS cross checks and sees that they sent it to you and they remove from your refund.   Is that what happened?   Was your refund reduced and do you now owe?

Or.....were you seeing it when you started preparing your return and now it disappeared?

What you may not realize is that as soon as you began to prepare your tax return, the software was giving you the $1400 and it was shown on that "refund monitor" -----but when you entered that you received it already, the software had to reconcile the payment you received,   You cannot get it twice---so it looked to you like you "lost" $1400.   You did not lose it---you just cannot receive it twice.

If you are not sure if you already received the$1400, check on your IRS account.

https://www.irs.gov/payments/your-online-account

[JulieS]

Can you clarify your question?

Have you filed your return already?

Do you owe $1400 on your tax return, or did you get an IRS letter?

If you did get an IRS letter, is it Letter 6475, Your Third Economic Impact Payment?

If yes, please reread your letter. This letter just lets you know that you received $1400 in 2021 for the EIP. This letter is meant to help you file an accurate return, it doesn't mean you owe anything.

[badams_taxes]

Thank you!

[RTCRAIG]

When I traced my federal return, I got this message back.  We change ed the amount claimed as   Recovery Rebate Credit on your tax return. The error was one or more of the following:  The amount was computer incorrectly.

[xmasbaby0]

@RTCRAIG

LOTS of people have made mistakes this year with the recovery rebate credit by "forgetting" that they received the $1400 per person stimulus checks last year.  They answered no to the questions for the  recovery recovery rebate credit and put the $1400 per person on line 30 of their returns.  But you cannot get it twice, so the IRS removes it when it is there by mistake.

Try checking your online account with the IRS

https://www.irs.gov/payments/your-online-account

Does the IRS show that you received a $1400 stimulus or EIP check in 2021?   Did you receive it?   When you were asked on your tax return did you say no?   Was there $1400 on line 30 of your tax return?

If the IRS says you got $1400 last year but you did not receive it you can have it traced.

LOST THIRD STIMULUS CHECK

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

[Rechelle2020]

I received an INCORRECT Letter 6475 stating I had received an Economic Impact Payment in 2021. I verified everything I received through direct deposit from the IRS, and I simply DID NOT RECEIVE IT. I was looking for answers in the community forum, but was coming up empty until I found "How do I claim the Recovery Rebate Credit in TurboTax?" and read past the part about verifying whether or not you received stated funds...

The answer is to

"enter all of your federal return information as you would normally."

Then, during the Federal Review, there is a screen if you qualified with the information you have entered: "DID YOU GET A THIRD STIMULUS?"

I answered "NO" and all of the subsequent questions, factually, instead of what the IRS Letter 6475 stated. TurboTax handled the information appropriately, and we not only got a Recovery Rebat Credit for me, but we got it for my husband as well. (I would not have even searched for this or known how to handle it if I hadn't have received the letter from the IRS that I knew was incorrect.)

Hopefully you were able to find and make this correction before submitting your tax return. 

If you enter what the IRS said you received in their letter, even though you didn't actually receive it, TurboTax will not appropriately credit what you qualify for at the time you are preparing your tax return.

Hope this helps.

[SDun12]

@Rechelle2020  this is probably going to delay your refund and isn't the right way to handle this.  You should claim it as the letter states, as that is what the IRS records reflect.  Then, you initiate a "refund trace" https://www.irs.gov/newsroom/2021-recovery-rebate-credit-topic-g-finding-the-third-economic-impact-p...  See "Q3" at this link.

The IRS is going to catch this when they process your return, reduce your refund by the amount in your letter, and delay the balance of your refund while they do it, sadly.   

So others beware - if you get a letter that says you receive a payment do NOT claim the credit on your tax return.  follow the directions in the above link instead.  

[Rechelle2020]

We'll see. It wasn't lost in the mail since everything else was direct deposit.

The IRS has sent me incorrect letters before, and, thought it takes a long time, They have corrected the issue successfully.

And also, I have been able to correct my mistakes... 

I am really grateful for your feedback because it made me go back and look one more time.

Here is what I found:

I got a letter last year in April from The White House stating we received a direct payment because of the "American Rescue Plan." It was for a different amount (which ended up being the combined of both of our Credits) than the amount stated on the IRS letter - that was only sent to me in January 2022 for "2021 Economic Impact Payment." I did not put the two together because they were called different things for different amounts. SOOO now I understand that we DID receive not only mine, but my husband's credit, and I made the mistake of saying we didn't receive it. 

I will make the correction, and I'm writing this to let others know, so they can avoid making the mistake I made tonight!

[badams_taxes]

Good Morning Rechelle2020!

I appreciate your understanding of the entire process because my real job consists of researching. That is why I posted information from IRS because everybody does not always pay attention to details because of the influx of emails received from the IRS.

Your manager needs to know how thorough you are in assisting your customers and appreciate you being a part of TurboTax. Because I believe in giving credit to who it is due to do and you have excellent customer service skills. Even though others responded to my concerns, you spoke from experience and understood the entire process. "Together Everyone Achieves More."

Thanks for correcting me because I do not want any unforeseen surprises with the IRS when I file my taxes. I also noticed someone had previously gone into my files to update line 30 (Recovery Rebate Credit) on Form 1040.

I humbly appreciate your sincere assistance.

"Together Everyone Achieves More"

[badams_taxes]

Rechelle2020,

Who is putting the information on line 30 of Form 1040?

How does TurboTax know what is in the customer's letter? For example, both me and my spouse, married filing jointly, were eligible for the $1,400 per person ($2,800).

I entered "0" because I did not receive the "Third Economic Impact Payment," I have bank statements to verify it. I noticed someone corrected it to $2,800, then went back and changed the amount.

According to the IRS letter I received it says, "If you think you didn't receive the full amount of the third Economic Impact Payment you were entitled to, you must file a 2021 federal income tax return to claim the Recovery Rebate Credit, even if you aren't otherwise required to file a tax return."

[VolvoGirl]

@badams_taxes   If you didn't get the 3rd stimulus deposit it was right to enter 0 and claim the 2,800 as the Recovery Rebate Credit.   Didn't the 2800 then show up on line 30?  Line 30 is if you didn't get the full amount or qualify for more.   But if you got letters 6475 from the IRS that is telling you how much they sent you.  If you are married you would each get a letter for half 1,400.  

Better check your IRS account (both accounts if married) to see what they sent you.
https://www.irs.gov/payments/your-online-account

If you didn't get the 3rd Stimulus check but the IRS shows they sent it to you then 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...