When I enter my 2021 economic stimulus amount into Turbo Tax, my tax goes from about a $1900 refund to a $1700 amount owed. Why?

[bob-welsh-jr]

the irs website and other sources say that this should not impact your tax bill. So what is happening here? Is it a glitch in turbo tax or is there somewhere to enter a credit that offsets this?

[xmasbaby0]

You might have become confused by the flow of information in the software.   That "refund monitor" on your screen displays a "refund" amount that includes the stimulus money. as part of your 2020 refund.   But later when you enter the amount of stimulus you really received already, it removes the stimulus already given to you.   And it looks to you like you "lost" your refund,   But ---you do not get the same stimulus money twice--that is why it came out.

Look on line 30 of your Form 1040 for your recovery rebate amount.

https://ttlc.intuit.com/questions/1901539-how-do-i-preview-my-turbotax-online-return-before-filing

Click on Tax Tools on the left side of the screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

[bob-welsh-jr]

So in spite of what the IRS said it was not just a check that would not need to be paid back, but instead was an advance on your 2020 refund essentially and it does actually in fact get taxed. 

[DawnC]

No, it does not get taxed - at all.   It is a 100% completely refundable tax credit.   You can look at your Form 1040.   Your tax liability (Line 24) is the same whether or not you already received the payments.   If you received the payments, you don't get another credit.   If you did not receive the payments (or were short), the amount you did not receive will be credited.

Are you by any chance looking at your state refund when you entered the amount of the stimulus you received?  

[bob-welsh-jr]

Nope.  Before entering the stimulus amount received, it shows Federal Refund : 1933"

After I put in the two rounds of stimulus checks totalling $3600, it shows "FederalTax Due: 1667"

So it is obvious based on this that either A) the money has to be paid back, or B) there is a bug in the online Turbo Tax program. 

[MaryM428]

In some returns, TurboTax started out by adding the amount of both stimulus payments to your refund or to offset any taxes due.  In your case something does seem to have gone wrong with that calculation.  Then when the stimulus payments are input as received that amount of money is deducted from the total and the amount due goes up.

Please follow these steps to see it your amount owed calculates correctly.  

Delete the Recovery Rebate Credit worksheet.

You will need to open TurboTax in a browser or on a computer.  This will not work in the app.

1. Go to Tax Tools on the left panel of your screen
2. Tools
3. Delete a Form
4. Find the Recovery Rebate Credit Worksheet and click Delete  

Add the Stimulus Recovery Rebate Credit Worksheet

At the top of your tax return select Federal Review

That will take you to this screen where it asks if you have already received your stimulus payments.  If you received the first or second payment already, then select Yes and fill in the information.  If you did not receive any payment select No.  If you received the first payment only, fill in that amount and put zero (0) for the second payment.

When the screen is correct, you refund will be adjusted for the amount of stimulus payment that will be added to your 2020 refund.

@ bob-welsh-jr

[plasher]

I am having the exact same issue and have been trying to determine why this is happening.  Have you had any luck?

[plasher]

According to a person at the IRS, the stimulus payment should NOT increase the amount of tax owed.  The payment does not show up anywhere on the 1040 form !  She believes it is an issue with Turbo Tax, however I have been unsuccessful in getting any assistance from Intuit/Turbo-Tax. 

[plasher]

Your suggestion of deleting the recovery rebate credit worksheet does not work with Turbo Tax.  There is no option of "Tax Tools" on the left panel of the screen.  Nor have I found any way to DELETE a FORM ?

[CatinaT1]

Before you enter the amount of the stimulus payments at the screen Did you get a stimulus payment?, you have been given the full Rebate Recovery Credit (the equivalent of the two stimulus payments).   This can be found on line 30 of the 2020 Federal tax return.  At this point, this is an 'incomplete' Rebate Recovery Credit.

The refund monitor on your screen displays a refund amount that includes the stimulus money as part of your 2020 refund.   When you enter the amount of stimulus you received, the refund monitor adjusts to account for this.

See this TurboTax Help.

This TurboTax Help states that the Economic Impact Payments (both the first and second) are not considered income, and therefore are not taxable.

[plasher]

Prior to entering the amount of stimulus I received [$3600], Turbo Tax shows a refund due to me of $1612  After entering the amount I received, Turbo Tax now shows me owing $788. 

So much for stimulus payments not affecting how much we owe or are due a refund ????

[Critter-3]

Let me explain how stupid the placement of the stimulus question in the interview flow is  ...  Until you get to that point where you enter the amount of the stimulus you got in ADVANCE  the program was including  the entire stimulus credit you are eligible for based on your 2020 return  and that is reflected IN THE REFUND METER ... but when you finally tell the program that you already got that money  it is removed from the form 1040 line 30 so it will either increase your balance due or reduce the refund.    So if it gave you $3600 in stimulus money but you then say you already got the $3600 in advance you will see the meter reflect that change.   The stimulus money is NOT taxable  but you do not get it again on the return if you already got it in advance.  

It would be nice if the TT programmers would have asked for that information in the beginning of the interview (like in the MY INFO section)   BEFORE you entered in the income   BUT the programmers did not ASK us posters in this forum  AND  they will not listen to us now and change it so I will be posting this answer A LOT  this year.  

[Critter-3]

@plasher 

Look at the form 1040  before and after entering the amount of stimulus payment you got to see how line 30 changed your bottom line.  

You can peek at only  the Federal form 1040 and the summary of the state info by going here:

1) lower- Left side of the screen...click to the left side of the "Tax Tools" text selection.
2)  then select "Tools"
3) then select "View Tax Summary" from the pop-up
4) then back to the left-side and "Preview 1040"

Then hit the "Back" on the left side to get back to your tax entries.

To view your entire return using the online editions (including the state) before you file, you will need to pay for your online account.

To pay the TurboTax online account fees by credit card, without completing the 2019 return at this time, click on Tax Tools >>> Tools  and then Print Center.  Then click on Print, save or preview this year's return.  On the next page, to pay by credit card, click Continue.  On the next screen it will ask if you want Audit Defense, if you do not want this option just click on the Continue button.  The next screen will ask for all your credit card information so you can pay for the account.

[totten2433]

My wife got $1400., I got nothing in March of 2021.   Where is this reported or not reported in Turbo Tax

[AamilD]

If you did not receive $1400 in March of 2021, you may be eligible to claim the stimulus payment when filing the return. However, please verify with your bank statements to be sure that you did not receive one. Additionally, if you received Letter 6475, please make sure the amounts tie to what is reported on the letter with what you enter in TurboTax.

Please follow the steps below to report the $1400 your wife received and to determine if you are eligible to get the additional $1400 for yourself:

1. Sign into 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 Let's double-check the amount you received; you will be able to enter the amounts. TurboTax will state the amount you should have received based on the information you have entered. If that amount ties to what you have received you will click on the Yes option. If that is not what you have received, you will click on No and enter the amounts you have received as stated on Letter 6475.

Please be very careful that you enter the the exact amounts you have received or else there may be significant delays before you received your refund.

Please refer to the image below: