Stimulus $600

[audreyh1]

Quote:

Originally Posted by sengsational Thanks. I got the update to the tax software and it's pretty simple. The "mini-worksheet for line 30, recovery rebate credit" just makes sure you're eligible, and for what amount, then subtracts any amount you got in 2020. And nothing to to with the "by January 15th payment" as far as I can tell. I'll admit to not paying all that much attention, but I somehow thought the current stimulus payments had something to do with 2020 taxes.

Yes, they are all reconciled on your 2020 taxes.

[SecondCor521]

Quote:

Originally Posted by sengsational Thanks. I got the update to the tax software and it's pretty simple. The "mini-worksheet for line 30, recovery rebate credit" just makes sure you're eligible, and for what amount, then subtracts any amount you got in 2020. And nothing to to with the "by January 15th payment" as far as I can tell. I'll admit to not paying all that much attention, but I somehow thought the current stimulus payments had something to do with 2020 taxes.

The "by January 15th payment" is indeed on the worksheet for Form 1040 line 30. In the IRS instructions, the worksheet on page 59 has it on line 8 (out of 21) and refers to it as "EIP2". You might also see reference to Form 1444-B, which is the notice of payment that you get telling you how much your EIP2 amount was.

If your tax software update is not yet making reference to two different EIPs, I would wager that you should check for another update and not file until you get a worksheet or data input screen with 2 EIPs on it.

[lemming]

Those people who used online software and had their fees paid out of the refund amount are screaming now because the IRS is sending the $$ to the "green card" people. The IRS is telling them they sent the money to Turbotax. Screams ensued. Both Santa Barbara bank and Turbotax are denying responsibility. What a mess

[sengsational]

Quote:

Originally Posted by SecondCor521 ... If your tax software update is not yet making reference to two different EIPs, I would wager that you should check for another update and not file until you get a worksheet or data input screen with 2 EIPs on it.

The early January update only makes reference to one. Another update is scheduled for 1/20. Thanks, all, for putting up with my ignorance.

[SecondCor521]

I wouldn't want to be the programmers and QA people putting that software together at the last minute under time pressure. I'm sure they have well developed tools and processes in place to help with their speed and accuracy. But having done that sort of work in my career in a less time-critical context, I wouldn't want to be in their shoes. One missed line number, one negative sign, one missed condition, and if it's anywhere near common, you later get to deal with helping 3,678 people file a Form 1040-X for the trouble you caused them, and probably for free. I guess that's an incentive to get it right the first time around. Thankfully the IRS doesn't ever change their rules or guidance or interpretation of tax law (ha!).

[Golden sunsets]

I wonder how the methods of claiming the credit on a 2020 tax return will change if the new Congress quickly passes the proposed expanded stimulus payments($2,000) as is being forecast by the new administration. If the legislation is passed as quickly as planned, the 2020 return instructions might be further revised to provide for the larger credit.

[audreyh1]

Quote:

Originally Posted by Golden sunsets I wonder how the methods of claiming the credit on a 2020 tax return will change if the new Congress quickly passes the proposed expanded stimulus payments($2,000) as is being forecast by the new administration. If the legislation is passed as quickly as planned, the 2020 return instructions might be further revised to provide for the larger credit.

Seems like any additional stimulus passed in 2021 will ultimately apply against your 2021 return.

[calico1597]

My grandson, age 19, did not apply for the first stimulus check or file any taxes. He went to welding and pipefitting school in 2019 after graduating high school. His parents told him since he didn't file or pay any taxes that he wasn't entitiled to the $1200. I think otherwise, told the parents, but what do I know? So he's not going to the the $600 this time either most likely. Isn't he entitled to both?

[Gumby]

Is he filing taxes for 2020? If yes, the total of $1800 is a refundable tax credit that he can get now.

[calico1597]

Yes, he did work and pay taxes in 2020. Will that be an automatic refund to him?

[Gumby]

Quote:

Originally Posted by calico1597 Yes, he did work and pay taxes in 2020. Will that be an automatic refund to him?

It's a refundable credit against taxes paid in 2020. So, if you assume his paycheck withholding equals his tax due, he'll still get an $1800 refund. (i.e. -- You add $1800 to his tax paid in 2020)

[SecondCor521]

Quote:

Originally Posted by calico1597 Yes, he did work and pay taxes in 2020. Will that be an automatic refund to him?

It won't be automatic, but if he files his taxes correctly he should see $1800 listed on line 30 of his Form 1040.

The main stumbling block would be whether or not his parents could claim him as a dependent in 2020 - it sounds like they probably cannot if he turned 19 in 2020 and was not a full time student.

(If he were claimable as their dependent, then he would not be entitled to $1800, and his parents couldn't get one for him either since he's over 17.)

[skipro33]

Quote:

Originally Posted by SecondCor521 The "by January 15th payment" is indeed on the worksheet for Form 1040 line 30. In the IRS instructions, the worksheet on page 59 has it on line 8 (out of 21) and refers to it as "EIP2". You might also see reference to Form 1444-B, which is the notice of payment that you get telling you how much your EIP2 amount was. If your tax software update is not yet making reference to two different EIPs, I would wager that you should check for another update and not file until you get a worksheet or data input screen with 2 EIPs on it.

It's not on the H&R Block tax software that way. The mini worksheet for line 30 is for $2,400 only.
Step e; Enter $1,200 ($2,400 if filing jointly)---This step establishes how much rebate you may be eligible for. I left out the steps for kids and AGI calcs.
Step m; did you get an economic stimulus payment in 2020? If yes, enter in line m.----This step establishes the amount you received in stimulus based on the amount you are eligible for as calculated above.
Step n; Recovery rebate credit.---This step establishes the difference between what you got and $2,400. If I put down I got nothing, then this box is populated with $2,400.

For the above steps, I played and entered $2,400 and step n/line n was zero. If I changed that to $1,200, then line n was $1,200. The combination of m and n, what I received and what I would get for credit always added to $2,400.
So the 2nd stimulus, the $600 per person, is not on the 2020 taxes according to H&R Block software.

I understand that this should likely get updated at some point before the final allows me to file my taxes. BUT, since I already went through these steps, an update wouldn't trigger me to have even checked. I will now because of what was posted here, but most likely if I were not a member of this site, I would have only done the first stimulus and not the 2nd.

BTW, if I don't claim I got the $2,400, my taxes change from owing $1,964 to a refund of $436. That means the credit gets applied to owed taxes. They do not keep the stimulus separate as a payment from your taxes owed.

One last thing; H&R Block software says the next update will be January 20th.

[SecondCor521]

Quote:

Originally Posted by skipro33 It's not on the H&R Block tax software that way. The mini worksheet for line 30 is for $2,400 only. Step e; Enter $1,200 ($2,400 if filing jointly)---This step establishes how much rebate you may be eligible for. I left out the steps for kids and AGI calcs. Step m; did you get an economic stimulus payment in 2020? If yes, enter in line m.----This step establishes the amount you received in stimulus based on the amount you are eligible for as calculated above. Step n; Recovery rebate credit.---This step establishes the difference between what you got and $2,400. If I put down I got nothing, then this box is populated with $2,400. For the above steps, I played and entered $2,400 and step n/line n was zero. If I changed that to $1,200, then line n was $1,200. The combination of m and n, what I received and what I would get for credit always added to $2,400. So the 2nd stimulus, the $600 per person, is not on the 2020 taxes according to H&R Block software. I understand that this should likely get updated at some point before the final allows me to file my taxes. BUT, since I already went through these steps, an update wouldn't trigger me to have even checked. I will now because of what was posted here, but most likely if I were not a member of this site, I would have only done the first stimulus and not the 2nd. BTW, if I don't claim I got the $2,400, my taxes change from owing $1,964 to a refund of $436. That means the credit gets applied to owed taxes. They do not keep the stimulus separate as a payment from your taxes owed. One last thing; H&R Block software says the next update will be January 20th.

Right. H&R Block needs to update their software. They're a good company and it's an obvious thing, so I'm sure they'll do so in the next week or so.

And yes, the recovery rebates will be applied to any taxes owing first and then any excess would become a refund to you.

[skipro33]

Quote:

Originally Posted by SecondCor521 Right. H&R Block needs to update their software. They're a good company and it's an obvious thing, so I'm sure they'll do so in the next week or so. And yes, the recovery rebates will be applied to any taxes owing first and then any excess would become a refund to you.

Thanks. And BTW, the reason I owe $1,964 is because my wife filed for her SS in November and had it backdated to her birth month of February. SS paid a single payment through December. So 9 months worth all in one lump sum. SS did not take deductions. I did file to have the penalty removed because of the unequal monthly payments and the lump sum at the end of the year. It was only $24, not a big deal, but still, worth the paper work to get the penalty pulled.

[skipro33]

Here's something about the second stimulus payment as well. My father died in November of 2020, before the 2nd stimulus payment was announced. I assumed he would not get the 2nd stimulus. I have closed the bank account he received the 1st stimulus already and checking on line, it didn't say one way or the other. However, when I pulled up instruction for line 30 on the Form 1040 we are discussing, I saw that it said he is. Here's the language;

Quote:

Generally, you are eligible to claim the recovery rebate credit if in 2020 you were a U.S. citizen or U.S. resident alien, weren't a dependent of another taxpayer, and have a valid social security number. This includes someone who died in 2020, if you are preparing a return for that person.

The instructions I found this on is here;
https://www.irs.gov/pub/irs-dft/i1040gi--dft.pdf

It is a draft, so maybe it will change?

[SecondCor521]

Quote:

Originally Posted by skipro33 Here's something about the second stimulus payment as well. My father died in November of 2020, before the 2nd stimulus payment was announced. I assumed he would not get the 2nd stimulus. I have closed the bank account he received the 1st stimulus already and checking on line, it didn't say one way or the other. However, when I pulled up instruction for line 30 on the Form 1040 we are discussing, I saw that it said he is. Here's the language; The instructions I found this on is here; https://www.irs.gov/pub/irs-dft/i1040gi--dft.pdf It is a draft, so maybe it will change?

That is a draft, but the language is also in the final instructions at https://www.irs.gov/pub/irs-pdf/i1040gi.pdf. Assuming your father otherwise qualified (had a valid SSN, etc.), then whomever files his 2020 Form 1040 can put $600 on line 30 for him.

You can confirm this by going to the FAQs on EIP2 at https://www.irs.gov/coronavirus/second-eip-faqs (search for "deceased"):

"With regard to eligible individuals who died in 2020, the Recovery Rebate Credit may be claimed on line 30 of their 2020 tax return. Please refer to the instructions for the 2020 Form 1040 for more information."

If there is a refund on his 2020 return, it will go to his spouse if they are still living and they file MFJ. If he was single, then there is a procedure and form to fill out for an executor to claim a refund. I don't recall the form offhand, but it's pretty straightforward.

Technically his $600 EIP2 should become part of his estate and should be distributed according to the terms of his will.

[carnivalday]

So in reading thru the draft from the IRS provided here in this thread, it states that the recovery rebate credit is based on your 2018 or 2019 tax return. Do you have a choice which one to use? I didnt get the first stimulus check since I was still in the process of filing my 2019 tax return. Based on 2018 return, I wasnt eligible, but based on my 2019 return I was. Can I file for the first stimulus payment based on my 2019 return?

[cathy63]

Quote:

Originally Posted by carnivalday So in reading thru the draft from the IRS provided here in this thread, it states that the recovery rebate credit is based on your 2018 or 2019 tax return. Do you have a choice which one to use? I didnt get the first stimulus check since I was still in the process of filing my 2019 tax return. Based on 2018 return, I wasnt eligible, but based on my 2019 return I was. Can I file for the first stimulus payment based on my 2019 return?

The recovery rebate credit is an advance on your 2020 tax credits, but they had to guess how much you would be entitled to since nobody has filed a 2020 return yet, so they based that guess on your 2018/2019 return. The IRS chose which year to use (generally, the most recent one they had processed). You didn't have any input into that, and you can't use your 2019 numbers to claim the credit now.

Since you didn't get any of the rebate in advance, you will figure your actual credit based on your actual 2020 income when you file your 2020 tax return this year.

[cathy63]

Quote:

Originally Posted by skipro33 Here's something about the second stimulus payment as well. My father died in November of 2020, before the 2nd stimulus payment was announced. I assumed he would not get the 2nd stimulus. I have closed the bank account he received the 1st stimulus already and checking on line, it didn't say one way or the other. However, when I pulled up instruction for line 30 on the Form 1040 we are discussing, I saw that it said he is. Here's the language; The instructions I found this on is here; https://www.irs.gov/pub/irs-dft/i1040gi--dft.pdf It is a draft, so maybe it will change?

The text of the latest covid relief act makes it clear that people who died during 2020 are eligible for the second payment. Since excluding your father would violate the law, I think you can rest assured that the IRS will not be modifying this part of the draft instructions.