Did you enter ALL of the stimulus money that you had already received correctly in the recovery rebate credit section when you prepared your 2020 return? The IRS cross checks and if you did not enter all of the money you received, they recalculate your refund.
MY REFUND WAS LESS THAN I EXPECTED
There can be a number of reasons why your refund was less than the amount you expected. First of all, look carefully at your actual tax returns. There is sometimes confusion about the amount of refund to expect when users misinterpret the “summary” they saw in TurboTax. The amount of your refund is on your tax return. Federal refund is on line 34 on Form 1040 State tax forms are all different so we cannot tell you what line to look at on your state form. BUT it is important to actually LOOK at your tax return forms yourself and see the amounts of your tax refunds and/or tax due. A lot of confusion would be avoided by doing that.
TurboTax does not receive feedback from the IRS regarding money that was offset from your refund. If you owed back taxes, child support, student loan debt, etc. you will receive a letter of explanation from the IRS in several weeks. The WMR site will contain a message regarding your offset. It is also possible that the IRS caught a mistake you made and reduced your refund.
A possible reason for the reduction could be that the recovery rebate credit was completed incorrectly and you may have entered the amount of stimulus already received wrong, which could have reduced the refund you thought you were seeing.
It is also possible that your state reduced your refund for debts owed in your state—if the state reduced your state refund you will receive a letter from the state.
IRS Treasury Offset Program Call Center at 1-800-304-3107
Be aware also that your Federal refund and state refund do NOT come together. Federal and state tax returns are processed by two completely separate entities. There is no rule as to which one will come first,
Did you choose to have TT fees deducted from your Federal refund? (Remember that if you did that, you also agreed to an extra refund processing fee of $39.99)
How can I see my TurboTax fees?
Reduced Refund https://www.irs.gov/taxtopics/tc203
NOTE: You can contact the IRS Treasury Offset Program Call Center at 1-800-304-3107 to ask if they have an offset for you on file. TurboTax would not have that information.
The IRS will send you a letter explaining the change. You might not get the letter until a month or so after you got the refund. Until you get the letter, we're just guessing at what the problem might be.
The difference is about $1,800. Did you have that on 1040 line 30? That could be the amount of the first and second stimulus checks you already got. Did you maybe get the second one after you filed? Line 30 should be only if you didn't get any stimulus checks or qualify for more. The IRS knows they already sent it to you but you tried to claim it again.
Same here it happened to my Federal and state they took $3,800 off my Federal and $2,000 from my state.
I think that Turbo Tax should have made it much more usual friendly and caught this and help guide us to whatever caused this.
for starters IRS ain’t paying us back I promise that but EVERYONE that got back way less than Turbo Tax told us then we need a refund at minimum. This is not cool it’s never happened in the 40 years I’ve been filling. NEVER. oh also, thank Joe Biden, I told everyone that money was not free and that it would bite us family with children in the ass.
NOW LOOK!! **bleep**
@Brianp81 - the two errors that are being corrected the most (by far) by the IRS are the Recovery Rebate Credit (line 30) and the Advance Child Tax Credit (line 28) of Form 1040.
If you've been doing taxes for 40 years, I'll assume the issue is Line 30.
During the TT interview process, you were asked how much you received for the THIRD stimulus (received March - May, 2021). If your response did not match the IRS records, the IRS adjusted Line 30.
What made this more complex is that the IRS send out a letter to each taxpayer confirming how much stimulus they received. But if you filed joint, there were TWO letters, one addressed to each spouse, with half the money on each letter. In TT, you needed to ADD the amounts of the two letters together. If you didn't, then Line 30 was inflated, which inflated the refund and the IRS caught that error.
is that what happened to you?
@Brianp81 BOTH your federal and state refunds were reduced? Something else is going on. The state would not reduce your state refund for child tax credit or the recovery rebate credit. Did you owe back tax to the the state? Only the state can tell you why your state refund was reduced. Or do you owe delinquent child support?
There are many possible reasons for the IRS to reduce your federal refund. If you owed back tax or child support those would be reasons, and as already stated, two very common reasons this year for reduced federal refunds are mistakes made with the recovery rebate credit and/or the child tax credit. Lots of people made incorrect entries when asked how much they received for the third stimulus checks or for the advance child tax credit payments sent between July and December.
You will be receiving letters from the IRS and your state that explain why your refunds were reduced. Wait for the letters.