Recovery rebate worksheet errors

[KGBKaren]

How do I make the recovery rebate worksheet go away? Client filing single made over $90k last year, not eligible. I am stuck with software calculating $1800 that is not due. Errors won't go away. Do I enter that he received the credits so it doesn't add to his refund?

[IRonMaN]

You enter into the worksheet the payments that were actually received for the year.

[KGBKaren]

He received nothing. He isn't eligible. If I enter 0, that makes it calculate that he gets $1800. 

[IRonMaN · Accepted solution]

If you enter zeroes and a credit is calculated, it sounds like his income dropped to the point of actually qualifying.  The credit is based on actual income for 2020.  2019 was only used as an estimate for sending out the early payment.

[KGBKaren]

Yes, his income dropped in 2020. What if he isn't interested in accepting it? How can I make the worksheet go away so he doesn't receive the payment? If I right click and delete it, it comes back and continues to show errors.

[IRonMaN]

If he isn't interested in receiving it, you have 2 options:

1.  Enter the amounts as if he had received them

or

2.  Send me the money --------- I'm interested in receiving it 😁

[KGBKaren]

Back to square one - that was my initial question and proposed solution.  Thank you.  I learned something about the stimulus payments about 2019 being merely a starting point and 2020 income was the actual determinate. I didn't realize a drop in actual income was the defining place for this. Appreciate the lesson.

[IRonMaN]

You betcha!

[qbteachmt]

"I didn't realize a drop in actual income was the defining place for this."

It's not, really. It's the 2020 Actuals that matter. A "drop" or not, isn't part of this. You might be confusing the EIP and the EITC. The EITC allows a lookback. Not for the EIP.

You need this again, for 2021.

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.

[dkh]

---

@KGBKaren wrote:

Yes, his income dropped in 2020. What if he isn't interested in accepting it? How can I make the worksheet go away so he doesn't receive the payment? If I right click and delete it, it comes back and continues to show errors.

---

My suggestion to clients that have told me they did not want the EIPs - donate the money to their church or a local food bank.  Everyone knows a family that struggles to make ends meet that would be grateful for the money. 

I don't suggest sending it back to IRS.

[IRonMaN]

A very worthy organization for those unwanted stimulus checks:

IRonMaN's Home for Wayward Coyotes.  

[poolcleaner]

Wiley, aren't you?

[abctax55]

"...Wayward Coyotes."

Jeff - what about the turtles?

[IRonMaN]

That is my Tuck the Turtle Foundation.  For a contribution of only $1.37 a day, you can make sure a turtle has a safe roof over its shell so that it can be safely tucked into bed each night.