Recovery Rebate Credit Worksheet: Calculating Correctly?

[JOFI]

Anyone else having concerns over how this worksheet is calculating stimulus payments?  I have a married couple, no dependents, with an AGI of $188,846.  No bueno on the second round, but they should have received a stimulus check for the first round last March, but never did, so I am now trying to claim it.

This is what I have:

Line 12:  150,000

Line 13:  38,846

Line 14:  1,942

Line 15:  458

Line 16:  0

Line 17:  458

Line 20: 0

This is all good and correct; taxpayer should have received a $458 credit last spring, but never did, so they should receive it now.  And, in fact, Line 21 says it is just an addition of Line 17 and Line 20.  But Line 21 shows nothing.  So there is no credit applied.

What am I missing here?

[Just-Lisa-Now- · Accepted solution]

you entered 0 on Line 19?

[JOFI]

Thank you, that did the trick. Line 19 was blank, and there was no error message prompting me to enter a value.  I assumed that, because their AGI was too high for the second stimulus payment, that the program automatically assumed it was 0, but I did need to enter the 0.

Now the $458 credit appears.

This is a minor bug in the program.  Not sure why, before I do anything with this worksheet, an empty Line 16 triggers an error alert, but an empty Line 19 does not.  If I need to enter a value into Line 19, then an error alert should appear until I enter a value there.

Nevertheless, thank you!

[Just-Lisa-Now-]

I think I noticed that early in the season, Ive made the crypto box and the RRC worksheet the first 2 things I fill in when I start working on a return.

[BobKamman]

You lost me at "no bueno."  If they qualify for a partial payment on EIP#1, why not one for EIP#2 ?

[Just-Lisa-Now-]

they meant they didn't get the second stimulus advanced payment.

[JOFI]

There was a lower income threshold for the second stimulus payment. For the first round, a married couple, no dependents, could get a partial stimulus payment if their AGI was as high as $199,000.  For the second round, the ceiling topped off at $175,000.

Because my client earned $188K in 2020, I knew they qualified for a partial first stimulus, but no second stimulus.

[qbteachmt]

"There was a lower income threshold for the second stimulus payment."

Nope. Perhaps you are confusing Advanced payouts with actual rule. There is no change or split for the income eligibility.

"No bueno on the second round, but they should have received a stimulus check for the first round last March, but never did, so I am now trying to claim it."

"I knew they qualified for a partial first stimulus, but no second stimulus."

Nope.

Perhaps it would help to review what is really happening:

The funds were paid out as Advanced payment against a projection. The projection used 2018 or 2019 tax returns. But 2020 is the 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 entitled to the payment/credit as individual filers. That doesn't mean "not being claimed." It means "no longer qualifies as a dependent."

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

Interactive wizards portal 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

One for each EIP.

And here:

https://proconnect.intuit.com/community/federal-taxes/help/recovery-rebate-credit-for-tax-year-2020-...

It's something you will need to more thoroughly understand.

[JOFI]

Thanks for the condescending response.  Perhaps you should review the tax laws yourself before you post incorrect information.

The income threshold phaseouts for the second round of payments occur at a more accelerated pace than the first round of payments.  Accordingly, a married couple with a final 2020 AGI between $175,000 and $199,000 who did not receive any Economic Impact Payments during the calendar year would now qualify for a partial Rebate Recovery Credit for the first payment, but still get nothing for the second round.  

I never discussed anything involving dependents, so not sure why you brought that up.

[Just-Lisa-Now-]

Agreed.

I do remember noticing what you did about the RRC worksheet not prompting to fill in payment number 2 when they are high earners....I believe its a programming glitch, Ive just been filling out the worksheet first thing, so I dont have to worry about possibly missing it.

[qbteachmt]

"Thanks for the condescending response."

Well, it wasn't condescending. These are all Text-based discussions; the only inflection you perceive is the one you infer. I tend to speak (and type) matter-of-factually. I try to be even more precise when it includes reference materials.

"The income threshold phaseouts for the second round of payments"

That's where we disagree, then.

The Advance payment went down by $5 for every $100 over the limit. The Advances changed. The income limit threshold never changed. And, it's moot, now. All of it is based on 2020 Actuals.

"would now qualify for a partial Rebate Recovery Credit for the first payment, but still get nothing for the second round."

It seems we also disagree on the fact that the stimulus is for 2020 as a whole, even though the payments were broken into two parts. They either qualify or they don't, and then the Advance payments are individually compared to the income for 2020 and the funds already received.

"I never discussed anything involving dependents, so not sure why you brought that up."

It's a macro; I've provided the text and links so often, it's now automated. Sometimes I remove specific parts, but not this time, since it was meant to provide a resource.