Recovery Rebate Credit 2021

[ldkartchner]

I am wrapping up my tax filing in Turbotax Deluxe for tax year 2021.  All along the way I have been watching for a way to process a final reconciling of the 2021 Recovery Rebate Credit or Economic Impact Payment.  I don't believe I was paid all that I should have received.  Is there some way to get Turbotax to calculate what should be due and provide instructions on how to get it?  I did some searching around the help site and found an article that says when I execute the "Federal Review" that if I'm eligible it should bring up a window to ask some questions.  That is not happening so I'm just wondering what to do???

I assume it used the 2020 tax filing to determine eligibility and amounts; my AGI was $153K filing joint.  I know it is graded down after $150K but I was hoping Turbo would help me calculate the amounts and help do the necessary filing.

[xmasbaby0 · Accepted solution]

The 3rd EIP payment is based on your 2021 income.   When Congress passed the 3rd stimulus they wanted the checks to go out in a hurry so the IRS used 2020 returns to hustle the checks out.   If you received the payment you do not have to pay it back even if your 2021 income is above the limit.   BUT ....it is really a credit based on your 2021 income----so on a 2021 tax return you have to use the recovery rebate credit in Federal Review to get it.

The IRS sent out letter 6475 to show what you received for the 3rd EIP payment.

If your 2021 AGI is too high you only receive a phased out amount--or maybe nothing.   If you are getting the credit it will show up on line 30 of your Form 1040.   If it is not bringing up the window for you to enter anyting to get the credit----your AGI is likely too high.

Who’s eligible for the third Economic Impact Payment? (updated  March 30, 2021)

Generally, if you’re a U.S. citizen or U.S. resident alien, you are eligible for $1,400 ($2,800  for a joint return), plus $1,400 for each qualifying dependent, if you (and your spouse if filing a joint return) aren’t a dependent of another taxpayer on a 2020 tax return, have a valid Social Security number (SSN) (see exception when married filing jointly and exception for qualified dependents) and your adjusted gross income (AGI) does not exceed:

• $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 eligible individuals using any other filing statuses, such as single filers and married people filing separate returns.

Payments will be phased out – or reduced -- above those AGI amounts. This means taxpayers will not receive a third payment if their AGI exceeds:

• $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 or
• $80,000 for eligible individuals using other filing statuses, such as single filers and married people filing separate returns.

For example, a single person with no dependents and an AGI of $77,500 will normally get a $700 payment (half the full amount). A married couple with two dependents and an AGI of $155,000 will generally get a payment of $2,800 (again, half the full amount). Filers with AGI of at least $80,000 (single and married filing separately), $120,000 (head of household) and $160,000 (married filing joint and surviving spouse) will get no payment based on the law.

You aren’t eligible for a payment if any of the following apply:

• You could be claimed as a dependent on another taxpayer’s 2020 tax return
• You’re a nonresident alien.
• You don’t have a valid SSN issued to you by the due date of your tax return (including an extension to October 15 if you request it).

Also, payments will not be made to estates or trusts or for individuals who died before January 1, 2021. 

[nowakvstaxman]

I received my 2021 Federal refund but it does not include my Recovery Rebate Credit of $2800.00

[LoganathanB]

The IRS sent out letter no 6475 to those who were paid the third stimulus.

Check your bank statements to see if you received the third stimulus in 2021.

You can also check in the IRS View Your Account Information page and after creating or accessing your account,

The third stimulus is based on your 2021 tax return and the stimulus is phased out depending on your adjusted gross income.

The AGI limits to receive the full amount of the credit is

• $75,000 for individuals
• $112,500 for heads of household
• $150,000 for married, joint filers

For filers with income above those amounts, payments were phased out or reduced. This means filers didn't receive any payment if their AGI was at least:

• $160,000 if married and filing a joint return
• $160,000 if filing as a Qualifying Widow or Widower
• $120,000 if filing as Head of Household
• $80,000 for any other filing status

Click on the link for more information

Third Stimulus

[MABR]

Can someone please provide the specific directions as to how/where we enter the Recovery Rebate Credit for the 2021 Federal Return? I have spent hours looking and am unable to find out where I input the third rebate that I received. If this is under "Personal", what section - Deductions & Credits? And, if under Deductions & Credits, where is it? Thank you!

[PattiF]

In TurboTax Online, to claim the Recovery Rebate credit please do the following:

1. Sign in to your account and continue from where you left off
2. Click on Federal in the left-hand column, then on Federal Review on the top of the screen
3. On the next page titled Did you [or your spouse] get a third stimulus payment?, answer Yes or No
4. Follow the interview and answer all questions
5. TurboTax will determine whether you are entitled to any additional stimulus
6. Any stimulus amount remaining due to you will show as a credit on line 30 of your form 1040.

[MABR]

Thanks for providing the information about how to do this online. I apologize for not being more specific. I purchased the software and installed it on my computer. How do I find this in the software for desktops (windows, not Mac). Thanks!

[xmasbaby0]

If you have desktop software click the tab that says Review.

[badams_taxes]

Can someone please explain where I should enter the Recovery Rebate Credit for the 2021 Federal Return? I spent hours trying to find out where to put the Third Stimulus Rebate that I did not receive. Also, why my Federal Tax due increase?

According to the IRS, if you did not get the full amount of the third Economic Impact Payment, you may be eligible to claim the 2021 Recovery Rebate Credit and must file a 2021 tax return – even if you do not usually file taxes - to claim it. Your 2021 Recovery Rebate Credit will reduce any tax you owe for 2021 or be included in your tax refund.

https://www.irs.gov/newsroom/2021-recovery-rebate-credit-topic-f-receiving-the-credit-on-a-2021-tax-...

However, when I entered the Recovery Rebate Credit, it increased my Federal Tax due.

TurboTax Tab (s) Personal Review ask for the following information:

• Let's double check the amount you received
•  
• Based on the tax info you entered and your combined adjusted gross income of $150,948, you and spouse are eligible for a third stimulus payment of $2,548.
•  
• Does this match the amount on Letter(s) 6475 for you and Spouse?
•  
• Yes or No - I selected No because Letter 6475 total should be $2,800. Then my Federal Tax due increased.

But the IRS states, "Recovery Rebate Credit will reduce any tax you owe for 2021 or be included in your tax refund".

Please advise.

[LenaH]

Before you entered your third stimulus payment, TurboTax was most likely giving you the Recovery Rebate Credit.

Generally, if taxpayers did not get a third stimulus payment, and now they qualify due to a change in circumstance, then they would get a 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. 

Once you entered your third stimulus payment, the credit got eliminated because you received all you were qualified for. This decreased your tax due. Stimulus payments were not considered income and are not taxable. 

To access the stimulus section of the return, please complete the following:

1. Open your return.
2. Search stimulus with the magnifying glass tool at the top of the page.
3. Click on the Jump to link. 
4. Enter the amount of stimulus you received on the page, Let's double-check the amount you received. Enter your total third round payment as it appears on your Letter 6475 from the IRS. 

@badams_taxes

[badams_taxes]

As previously mentioned, I only changed the $2,548, which populated, to $2,800 mentioned in Letter 6475; it did not increase a refund or decrease the amount of tax owed. Still, it did increase the amount of Federal Tax Owed.

My Federal Tax Due went from $2,372 to $4,965 when I changed the $2,548 to $2,800.

[LenaH]

If you are still getting an error, it would be helpful to have a TurboTax ".tax2021" file that is experiencing this issue.

You can send us a “diagnostic” file that has your “numbers” but not your personal information. If you would like to do this, here are the instructions: Go to the black panel on the left side of your program and select Tax Tools. 

1. Then select Tools below Tax Tools. 
2. A window will pop up which says Tools Center.  
3. On this screen, select Share my file with Agent. 
4. You will see a message explaining what the diagnostic copy is. Click okay through this screen and then you will get a Token number. 
5. Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.  

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

@badams_taxes

[badams_taxes]

See the below question information from the TurboxTax:

We crunched the numbers and the amount you received looks right.

Base on your combined adjusted income $150,948 and the third stimulus payment you received $2,800, we are confident you got every stimulus dollar you qualified for.

Why am I not getting the Recovery Rebate Credit?

Not getting the credit means you already received the full amount you qualify for. This is common as most taxpayers got the full amount they qualified for when stimulus payments were issued.

Your stimulus payments are like a cash advance on the Recovery Rebate Credit. Typically you'd just get the full credit on your taxes but many taxpayers couldn't afford to wait until tax time for this  money. In response, stimulus payments were sent out before tax season.

Please advise.

[badams_taxes]

Hello, 

I sent two (2) messages and no one responded.

Please advise.

[VolvoGirl]

You have received 2messages back.  Did you get the separate 3rd Stimulus payment that came out starting in March 2021 for 2,800?  Or not?   The Recovery Rebate Credit on line 30 is only if you didn't get the full amount or qualify for more.  If you did NOT get any then say NO and put down 0.  Do not enter the 2800 you qualify for.  

So why are you entering 2800 if you did not receive it?  You only enter the amount you did receive to see if you get more.