Stimulus Information and Change in Federal Refund

[mpoliq2021]

I finished adding all of my tax information and had a refund coming back from Federal.  When I logged into Turbo Tax later so I could actually submit my returns, there was an update to the program.  I went through everything again, but there was now a question regarding the stimulus payments, whether we received one or both, and what the amounts were.  Even though we received one payment in 2021, I entered the information (we received what we were supposed to), and the Federal refund reduced by $1200.  We thought maybe it was taxed, so filed our returns.  Upon further investigation, I see the payments are not supposed to be taxed.  It appears our taxable income didn't change at all with the additional information, so I am at a loss as to why the Federal refund changed...

[AlanT222]

The stimulus payments are not taxable.  When you started your income tax return, TurboTax automatically entered the Recovery Rebate Credit.  This credit assumes that you did not receive the first and second stimulus payments.  Once you enter the stimulus payments you actually received, the Recovery Rebate Credit is removed.  It appears as though your refund reduced because you started with a credit you were not entitled to receive.  

[mpoliq2021]

Thank you for the information!