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My client's adjusted gross income dropped below $150,000 after the unemployment tax break, but they did not receive their full amount on their 3rd stimulus, how will they recover this. Is Lacerte going to come out with an update to reflect the recovery rebate credit for the 3rd stimulus?
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As EIP #3 is for 2021, and will be reconciled on the 2021 tax returns.... I'm not sure what update you are expecting.
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The third stimulus will be reconciled with the Recovery Rebate credit on the 2021 tax return.
IRS wouldn't know about their income being below the $150,000 threshold until they receive the 2021 return. Since IRS revised the guidance TODAY to exclude unemployment in determining the $150,000 limit, and Intuit hasn't changed the software yet, I assume they don't have this information about your client, right?
Whether they will start kicking EIP #3 out to people once they get qualifying 2021 income tax returns is anybody's guess. Anybody?
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Yes, they are supposed to do a mid-year 'catch up' payment for EIP #3 based on the 2020 tax return.
