Recovery Rebate Credit Problem

[kwesiboat]

My client's ex-partner filed HOH with their 2 kids as dependents and claimed the Recovery Rebate Credit of $1,400 for each dependent in 2020. It's my client's turn to file with the kids in 2021. My challenge is do I indicate on the (Recovery Rebate Credit Worksheet) that the funds( $2,800)  for the dependents have been received already on my client's returns, even though the funds were actually paid to her ex-partner on his 2020 returns?

[TaxGuyBill]

No.

Although the law directed the IRS to create guidance to avoid that type of double-dipping, as of today the IRS has not issued any such guidance.  So as of now, your client can claim the full Recovery Rebate for the children.

[BobKamman]

Your client doesn't have a tax problem.  Conceivably, she has a family-court problem if the other parent wants reimbursement for the $2,800 that now reduces his refund.  (Or does it?  The ACTC might have to be paid back, but not the RRC, right?)  I would focus on the client's tax return and not on someone else's tax return or on the shortcomings of federal government policy.