Recovery rebate question

[confusedrf]

First I got a letter from the IRS showing my economic impact payment. Second I input all my taxes into turbo tax and was doing the review and it came up with the section where it said I needed to enter my recovery rebate from the prior year. Is this the economic impact payment... because when I entered the 2100 suddenly my federal refund increased by about that much and I'm confused as to why?

[FangxiaL]

Yes, the economic impact payment is the 3rd stimulus payment, also call Recovery Rebate Credit on our tax return Form 1040.

If you filed a joint return with one dependent, most likely you received $4,200. The IRS Letter 6475 reports 1/2 of it to you and the other 1/2 to your spouse. So if you have received $4,200, enter $4,200 instead of $2,100 (if still filing jointly).

[confusedrf]

Sorry if this is a duplicate reply. I pop back in to see if I had any more answers. As I had mentioned above whether it's $2,100 or 4200 I will check that out but my real question is why after entering all of my tax info and running the review it showed up as an error and said enter your recovery rebate and when I did enter 2100 my refuse suddenly grew by about that much ...why would that happen?

[JamesG1]

You asked:  "why after entering all of my tax info and running the review it showed up as an error".

The Recovery Rebate Credit questions show up late in the software because TurboTax wants to make sure all of your information has been entered.

The computation of the Recovery Rebate Credit is a two-step process.  You are able to observe what is happening at each step on line 30 of your Federal 1040.

Early in the program, TurboTax software computes whether you qualify for the $1,400 third stimulus check and gives you immediate credit for the third stimulus check. 

You are able to view this Recovery Rebate Credit on line 30 of the Federal 1040 under Tax Tools / Tools / View Tax Summary / Preview my 1040.

You enter the third stimulus check actually received at the screen Let's double-check the amount you received. 

Then the Recovery Rebate Credit on line 30 is reduced by the amount of the checks received.  You may also view this under Tax Tools / Tools / View Tax Summary / Preview my 1040.

[confusedrf]

I think I'm going to start over from scratch and be more careful and more methodical.

Re:

Early in the program, TurboTax software computes whether you qualify for the $1,400 third stimulus check and gives you immediate credit for the third stimulus check. 

Shame on me for not remembering all the last year was a bad year for many of us. I thought we already got the third stimulus check.

As far as I can tell I received a single letter from the IRS department of Treasury saying my total 2021 economic impact payment was $2,100. I don't recall how it came I do know there's me my wife and daughter here.

Hopefully as I go through this and look at the stuff you referenced it'll make more sense to me.

[ErnieS0]

If you have three people in your household your maximum third payment would be $4,200. If you only received $2,100 then your refund would increase by the difference (assuming you now qualify for the full payment).

TurboTax calculates what you should have received based on your 2021. It then asks if that's the right amount. If not, you enter what you got and the difference gets added to your refund.

[confusedrf]

I am not sure how it got all wonky the first time however I decided to start over from scratch sure enough this time it did ask me about what turned out to be $4,200. I seem to have only gotten one letter for $2,100 perhaps my wife got the other one and lost it I don't know but I went into my checking account and saw the 4200 so I think this part has now all worked out.  I will be posting about something else that just popped up though something about schedule 8812 and annabode that I never remember seeing before! I'll add a new post and consider this one closed thank you all.

[confusedrf]

Hey I know I said I was done asking questions but actually I do have another one. So the third stimulus arrived in march. And I saw the 4200 deposited into my checking account... A single 4200 deposit and I entered that amount in turbotax. I'm going to assume it was $1,400 for myself, my wife and my dependent daughter... that adds to 4,200.  Here's my question why did I get a letter from the government  mentioning 2100 ? It has my name on it and as far as I know my wife and daughter did not get a letter. 

This thing says 'Under the American rescue plan the internal revenue service issued you 2021 economic impact payments for the following amount 2100'. How  did they come up with that number ....if it was supposed to be $1,400 a person it should have said $4,200 which again was what I saw deposited in March. Is this letter affiliated with that $4,200 or is this something else I'm very confused.

Is it okay that I just entered the 4200 and I'll essentially ignore this letter assuming it was some kind of bad math on the irs's part?

[AmyC]

Your wife should have also received a letter for $2,100. As the parents, you each get $700 of your child's amount. The total of the two letters is $4,200 for the stimulus entry.

[confusedrf]

Well that makes some sense so long as I don't need the letter I'm not going to worry about it I think it's the deposit that counts!

No question is this taxable... Are there federal or state I'm just curious I'll assume TurboTax comes up with the right answer but I'm just curious...

Thank you.

[JamesG1]

IRS Publication here states:

Is the Third Economic Impact Payment includible in my gross income?

No, the Third Economic Impact Payment is not includible in your gross income. Therefore, you will not include the third payment in your taxable income on your 2021 Federal income tax return or pay income tax on the third payment.

@confusedrf