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What are the eligibility rules for the Recovery Rebate Credit wrong in Turbo Tax.

Forum|Forum|4 years ago
May 7, 2022
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The eligibility requirements are incorrect in Turbo tax which cause an error after I filed and I now owe $300 plus interest instead of a $5000 rebate. This is from the IRS web site. Turbo tax says $150,000 for joint filers and review does not catch this. I waited until April 13th to file to get all the updates I could.

Q H4. How do I know if I don’t qualify for the repayment protection for filers based on their income during 2021? (updated February 1, 2022)

A4. You won’t qualify for any repayment protection if your modified adjusted gross income (AGI) is at or above the following amount based on the filing status on your 2021 tax return:

$120,000 if you are married and filing a joint return or if filing as a qualifying widow or widower;
$100,000 if you are filing as head of household; and
$80,000 if you are a single filer or are married and filing a separate return.

For information on the definition of modified AGI, see Topic C: Calculation of the 2021 Child Tax Credit.

Best answer by VolvoGirl

Filed joint with 2 dependents. New wrinkle. After downloading from the IRS my transcript of the federal taxes they claim they processed a payment on 3/17/21 for $5600. This never entered my bank account. Now the fun begins.

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

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NCPERSON1

something does not make sense. Is your issue the Recovery Rebate Credit or the Advance Child Tax Credit? (your question states the RRC but the FAQ is about the child tax credit, leaving me confused).

Both required you to enter how much you already received. if you did not enter the amounts already received, the refund would be inflated

What is on line 30 of your tax return?

What is on Line 28?

What is on Line 11?

if you received the 3rd stimulus (around March - May, 2021) and did not enter that into TT when prompted, it would cause Line 30 to be incorrect.

If you received the advance child tax credit from July to December, 2021 and did not enter that into TT when promoted, it would cause Line 28 to be incorrect.

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SweetieJean

Employee

You have posted the income limit for the Child Tax Credit, but your question is about the Recovery Rebate Credit. These are two different credits, with different income limits. See here:

2021 Recovery Rebate Credit — Topic C: Eligibility for claiming a Recovery Rebate Credit on a 2021 tax return | Internal Revenue Service (irs.gov)

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SweetieJean

Employee

Many taxpayers have been misunderstanding these credits. As of April 7, the IRS had issued 9.4 million math error notices — and 8.3 million of these notices were related to the recovery rebate and the child tax credit.

Where's My Refund? IRS has some answers but others left clueless (freep.com)

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PherpichAuthor

The IRS denied my eligibility. Total AGI is 124,000 for 2021. So who is wrong? The IRS or Turbo tax?

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xmasbaby0

Employee

@Pherpich You have not mentioned your filing status or which credit you are asking about. The eligibility criteria for the recovery rebate credit ("stimulus" check) is not the same as the eligibility for the child tax credit. TurboTax follows the IRS rules for both credits. And....if your income is above the eligibility for the full amount, there are phase outs.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**

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PherpichAuthor

Filed joint with 2 dependents. New wrinkle. After downloading from the IRS my transcript of the federal taxes they claim they processed a payment on 3/17/21 for $5600. This never entered my bank account. Now the fun begins.