Recovery Rebate Credit Worksheet

[dwmarine]

MFJ AGI $183,726.

On the Recovery Rebate Credit Worksheet line 15 the adjusted credit is $714.

$183,726-150,000=$33,726*.05=1686

$2,400-1686=714

They received $512 as the first rebate and show a credit of $202 on line 17

Received second stimulus check of $569, entered on line 19, no additional credit on line 20.

Total credits on line 21 are $202 which were reported online 30 of form 1040.

The IRS just sent a letter which removed the $202 credit?  I can't figure out where I went wrong or the IRS or the worksheet?

Do you see anything.

[The-Tax-Lady]

Not sure why, but I have a similar one that has been in process since 3/12/21. Spoke to IRS today but was told it is still processing and they are way behind because of all the verifications required on the 2020 return.

Did your client file MFJ in 2019? Mine filed MFS in 2019 and MFJ in 2020 so I think that might be part of the delay, but it's just a guess. IRS could not give me specific details on the client's return and just read off a list of excuses for the delay.

[dwmarine]

They were MFJ in 2019 too.  The return was accepted, they owed money but then received a notice that they owed more money!

[The-Tax-Lady]

Then I guess your only alternative is to call the number on the notice or the Priority line and see if you can get an explanation of why the correction was made. If you are the preparer and/or 3rd party designee, you can call without having the client sign an 8821.

[sjrcpa]

If they are allowed a RRC of $714 but received $1,081 (512 +569) then there should not be a credit on the 2020 1040.

What am I missing?

[PATAX]

@dwmarine are you sure of the amounts that they said they received for eip1 and eip2 are correct... Did they bring in the letters... I have not had any issues with this including married filing joint couples who made similar amounts as your client...