Question

Recovery Rebate Credit Destroyed my Family

Forum|Forum|4 years ago
May 11, 2022
2 replies
0 views

I've used TurboTax for over TEN YEARS. Look it up. I'm not exaggerating. Every year I pay for the highest level with audit protection.

I AM A GOOD CUSTOMER.

For the first time EVER I got a letter from the IRS explaining that TurboTax did my taxes wrong and that I owed the IRS double. This is all because the TurboTax software gave my family a Recovery Rebate Credit when we were ineligible. I literally don't even know what the Recovery Rebate is. I've trusted TurboTax for 10+ years followed the prompts and never had a problem.

We are self-employed. Finding out we owe the IRS double destroys our family. This is my daughter's first year of college. We are DYING financially because of covid and we're barely surviving.

LOOK AT YOUR FORUM. YOU DID THIS TO DOZENS OF REAL PEOPLE. It's devastating. I don't know what we're going to do.

TurboTax Self Employed Online

VolvoGirl

Employee

The Recovery Rebate Credit is on your 1040 line 30. It is for the 3rd Stimulus payment. Did you not get any of the Stimulus payment that came out in March 2021? The IRS records show they sent it to you. You tried to claim it again on line 30. Did you get letter 6475 telling you how much you got? Each spouse should get a letter for half but you needed to enter the total.

1400 is for the 3rd Stimulus payment for each person. It is on 1040 line 30. Line 30 is only if you didn't get the full amount or qualify for more.

If you claimed a missing stimulus payment on your return but the IRS took it off you have to ask the IRS. They think they already sent it to you. Maybe it went to an account you don't remember. Or you got a check or a card. It was probably easy to miss the debit card in the mail and think it was junk mail. They have to put a trace on it.

Double check your bank statements and Check your IRS account to see when and what they sent you (check both spouse's accounts if married)

Your Online Account | Internal Revenue Service

If the IRS thinks they sent it to you but you didn't get it request a trace for a missing third Stimulus payment

https://www.irs.gov/newsroom/questions-and-answers-about-the-third-economic-impact-payment-topic-j-payment-issued-but-lost-stolen-destroyed-or-not-received Your Online Account | Internal Revenue Service

S

snaphappyAuthor

You don't understand the problem at all. But actually, you probably do and just don't care.

I followed the software prompts. The software determined I was eligible for the Recovery Rebate. We put our trust in TurboTax to find these things FOR US. That's literally what you guys advertise.

LOOK AT THE FORUM.

This happened to LOTS of people.

I'd recommend admitting the mistake and making it right.

VolvoGirl

Employee

A lot of people answered the Stimulus questions wrong. And not just on Turbo Tax. How much did you get last year for the 3rd Stimulus payment? It was 1400 per person. Do you have 1 dependent or more? For married with 1 dependent you should have got 4200 (1400x3). How much was on line 30? Did you check your bank account? You didn't get any 6475 letters?

Sorry there is nothing you or Turbo Tax can fix or amend for. The IRS adjusted your refund. If you didn't already get the 3rd Stimulus payment last year the IRS has to put a trace on it.

K

kkmorrison88

I have similar situation. IRS wants hefty penalty and interest for a 2021 1040 where Turbo Tax mistakenly resulted in a refund by not calculating in a stimulus payment I received that I did not qualify for. I entered the payment in for the stimulus and it did not add it in for repayment, The calculation for my child tax credit should have been $312, not $2000.

I'm trying to work with IRS, but they are adamant for the difference of $1,688 in tax due they want $3,600 in penalty and interest. I have requested penalty forgiveness, but am told I must file a correction and pay it and may be they will provide a small amount of forgiveness on the penalty. Yeah sure, like that will happen...

I need to file a 1040-X, but any suggestions on a way to help this situation on penalty and interest would be greatly appreciated. Its really frustrating Turbo Tax did not let me know in any way that my income level did not qualify for the stimulus payment, I had no idea when I filed the return.

T

ThomasM125

You can request a 1st time abatement of penalties based on a good history of timely tax payments and filings, which would entail not having any tax penalties in the previous three years. You can do this by responding to the penalty notice you receive and citing the 1st time abatement rule. You can also file form 843 Claim for Refund and Request for Abatement of Tax. You can learn more here: Request for 1st time abatement of tax penalties Form 843 request for abatement

[Edited 2/28/24 at 7:08 PM PST] @kkmorrison88

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