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EIP #1 and #2 calc for spouse with ITIN PTO

LoveTax
Level 3

ProConnect Tax Online calculates Recovery Rebates credit for the spouse with ITIN. Based on IRS descriptions, the whole family was disqualified for EIP #1 with any spouse with ITIN; only those with SSN were qualified for EIP #2. Is there a way to suppress/fix the calc? 
Case: Husband with SSN valid for employment, wife with ITIN, child with SSN. They received EIP #2 of $1,200 ($600 husband + $600 child). What's the best approach in filing via PTO? Thank you

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2 Comments 2
qbteachmt
Level 15

"Based on IRS descriptions, the whole family was disqualified for EIP #1 with any spouse with ITIN; only those with SSN were qualified for EIP #2."

I think you need to read the IRS info directly and as Currently updated. For instance:

From: https://www.irs.gov/newsroom/questions-and-answers-about-the-first-economic-impact-payment-topic-a-e...

"Update: The first Economic Impact Payment was not made to married couples filing joint returns unless both spouses had Social Security numbers valid for employment or at least one spouse was a member of the military. In December 2020, the COVID-related Tax Relief Act of 2020 changed this requirement. As a result, a married couple filing a joint return is eligible for a partial Recovery Rebate Credit when only one spouse has a Social Security number valid for employment. If you and your spouse didn’t receive the first Economic Impact Payment because one of you did not have a Social Security number valid for employment, you may claim the Recovery Rebate Credit on line 30 of your 2020 tax return."

 

So...

Perhaps it would help to review what is really happening for EIP “stimulus” funds: The funds were paid out as Advanced payment against a projection. The first two payouts were projected based on 2018 or 2019 tax returns, but the eligibility is part of tax year 2020 as Actuals. You use the 2020 return to reconcile what a person is entitled to, against what they got.

If the person is not a dependent in 2020, then they would be eligible for consideration as individual filers. That doesn't mean "not being claimed." It means "no longer qualifies as a dependent." You must correctly address whether they Can be Claimed as a dependent on someone else’s tax return.

The third payout which started in Jan 2021, has different eligibility rules as to dependents and this payout is a projection, using 2019 or 2020 tax returns, then reconciled against Actuals on the 2021 tax return.

You might want to bookmark these links and read the IRS guidance.

Interactive wizards portal includes one for determining dependency:

https://www.irs.gov/help/ita

And:

https://www.irs.gov/newsroom/economic-impact-payment-information-center-topic-a-eip-eligibility

https://www.irs.gov/coronavirus/second-eip-faqs#Eligibility

https://www.irs.gov/newsroom/irs-is-issuing-third-round-of-economic-impact-payments
https://www.irs.gov/coronavirus/third-economic-impact-payment
https://www.irs.gov/newsroom/more-economic-impact-payments-set-for-disbursement-in-coming-days-taxpa...
https://www.irs.gov/newsroom/more-details-about-the-third-round-of-economic-impact-payments


One for each of the three EIP “stimulus” payments.

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LoveTax
Level 3

Thank you, my understanding based on this info and PTO calc, looks like husband with SSN + child with SSN both qualify for EIP #1 even with ITIN spouse, so will file with EIP credit and hope for no IRS notices.

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