Reporting Stimulus in 2021 Tax Year

[ERD50]

Not sure if this is a TaxAct issue (I use the online version), or generic, or maybe not an issue at all?

I've got almost all my info entered, so I run a review. Typical 'warnings' that are OK, but it also says something about I did not enter amounts for my 3rd stimulus payment. I find the entry from my checking account where the direct deposit was made by the US Treasury, so I enter that amount and that seems OK. But as I'm digging through my records (and we were in the process of moving at this time, so things are still a bit scattered), I also find what appears to be the 2nd stimulus (paper) check (it isn't labelled as such, just "Economic Impact Payment", dated 3.26.2021), for $1741, and I did a mobile deposit of this check at the time.

But then TaxAct comes up, "Good News you have an additional tax credit of $1,741". Hmmm, that matches the check that I got. It seems to me that TaxAct just does not "know" about that check, and I can't find any place to enter it.

Or is it legit, and the numbers are the same for some reason?

Although I try to hold myself to a high ethical standard, at this point,, with my frustration over how complex Congress has made our tax laws (* see the start of a rant below), and the fact that they are so backlogged that when would they even get to this if it a problem, I'm tempted to just take the credit and plead ignorance (which is true!).

Any advice on how to proceed at all?

(*start of a slightly off-topic rant) - TaxAct said I should have received form 'Notice 1444-C' , but I've had some US Treas mail get lost (displayed in my Informed Delivery, but never showed up - I need to report it, but have little hope, but can use the deposit number from my bank account). TaxAct also said I should be able to download a copy from my IRS account - OK. But now, just my login/pw isn't good enough, they run me through the id.me stuff. Short version, it failed, and I can't believe all the hoops I have to jump through just for me to DL a form I was mailed. But, I'll save that for another thread, if I can manage to stay within guidelines).

-ERD50

 

[ERD50]

I guess that title should be "Reporting Stimulus Payments in 2021 Tax Year"

But after going through id.me, I guess I wouldn't be too surprised if the Government stared asking me about any and all "stimulus" I may (or may not have) received in 2021!

-ERD50

 

[jebmke]

The payment you received goes on Form 8915F; it should appear there if you entered it correctly in the software. Normally there is a dialog to enter this payment.

You also should be receiving or have received a letter from the IRS showing their record of your payment.

 

[cathy63]

Lots of people haven't received their letters yet. DH got his, but I haven't gotten mine and most of the people I help at Tax-Aide are in the same boat. It's terribly confusing for people because in most cases there was only one deposit per family, but they send two letters with half the payment on each person's letter.

The third stimulus was a max of $1400 per person, including dependents, and it should have been paid around March 17, 2021. The phase-out was between 150k and 160k for an MFJ return. You might also have gotten a plus-up payment after your 2020 return was processed if the original payment you received was for less than the full amount. If you have an IRS.gov account, you can login and view the EIP amounts there. Multiply that amount by 2 if you are married.

 

[cathy63]

... Although I try to hold myself to a high ethical standard, at this point,, with my frustration over how complex Congress has made our tax laws (* see the start of a rant below), and the fact that they are so backlogged that when would they even get to this if it a problem, I'm tempted to just take the credit and plead ignorance (which is true!)...

Don't do this. We have seen a couple of different outcomes when people told us they had not received the stimulus so we claimed it on their tax return and then later they figured out that they did get it. Sometimes the IRS has reached into the account where they originally deposited the stimulus and taken it back. For some this has happened before they got their refund which also included the stimulus, so people were out $$$ for a few days until the tax refund arrived. Other clients have gotten letters and the entire refund has been held up until they respond, which means sending a letter/form, and we all know how quickly the IRS is opening and responding to paper mail. There's an option to call and wait on hold, but I haven't heard how that's working out.

 

[cathy63]

The payment you received goes on Form 8915F; it should appear there if you entered it correctly in the software. Normally there is a dialog to enter this payment.

You also should be receiving or have received a letter from the IRS showing their record of your payment.

Stimulus payments don't go on your tax return if you did receive them. You put the amount you did not get in advance but are entitled to on line 30 of your 1040.

Form 8915-F is used if you took a disaster-related (including Covid as a disaster) withdrawal from a retirement account and either repaid it or are spreading the tax over 3 years.

 

[Dreamer]

I received my Letter 6475 dated 02/09/22 in the mail today showing my Total 2021 Economic Impact Payment of $1,400.00. My DH has not received his letter yet.

I did not remember the amount that we received, so thanks Cathy63 for saying that we would each receive a letter.

 

[ExFlyBoy5]

I received my Letter 6475 dated 02/09/22 in the mail today showing my Total 2021 Economic Impact Payment of $1,400.00. My DH has not received his letter yet.

I did not remember the amount that we received, so thanks Cathy63 for saying that we would each receive a letter.

Yep, both DW and I got them about a month ago. I used TaxAct and at some point in the "interview" it asked if we got the payment and how much they were. I would have to go back to see where (or if) it's actually reported on any of the filed forms, but as mentioned earlier...I don't think that it is.

 

[ERD50]

So I went through the interview process for the "Recovery Rebate Credit" one more time, and confirmed that it only asks about the 3rd payment. I clicked on an info button, and it includes this:

Do I include my plus-up payment in the total?

Yes. Include any initial payment and plus-up payment you received in 2021. The total of all 3rd round stimulus payments will be shown on Letter 6475.

What struck me is (and I don't have my 6475 letter yet) is it mentioned the total of all 3rd round payments. As I understand it, we (MFJ) qualify for $2,800 total (which we received between a paper check in March, and a direct deposit in May).

Now maybe the terminology is throwing me. The paper check makes no reference to it being a 1st, 2nd, or 3rd payment, it just says "Economic Impact Payment". The direct deposit at least had a "TAXEIP3 " notation, which I take to mean "Economic Impact Payment #3".

So maybe I'm supposed to add both of the payments together as the "3rd"? That would seem to resolve this (they add up to the full $2800), TaxAct would then (I assume) net it out and say I have no additional credit due, and would not credit my refund/due amount. That would seem to reflect the reality of it, if I'm understanding it correctly.

I guess I need to see that letter to better understand this?

Don't do this. We have seen a couple of different outcomes when people told us they had not received the stimulus so we claimed it on their tax return and then later they figured out that they did get it. Sometimes the IRS has reached into the account where they originally deposited the stimulus and taken it back. For some this has happened before they got their refund which also included the stimulus, so people were out $$$ for a few days until the tax refund arrived. Other clients have gotten letters and the entire refund has been held up until they respond, which means sending a letter/form, and we all know how quickly the IRS is opening and responding to paper mail. There's an option to call and wait on hold, but I haven't heard how that's working out.

Thanks. As I said I try to take the high road, but sometimes I need a kick in the rear for motivation!

-ERD50

 

[sengsational]

Back during the time when the various economic stimulus payments were coming out, I didn't remember ever being disappointed that I didn't get one that other's were getting, so when I got to that question in the interview about "recovery rebate credit" asking if I got the "plus-up" payment, I said "yes", and moved on.

Just now I searched my account register for amount $2,800 and found one on 3/29/2021. I guess I made the correct assumption.

 

[Aerides]

So I went through the interview process for the "Recovery Rebate Credit" one more time, and confirmed that it only asks about the 3rd payment. I clicked on an info button, and it includes this:



What struck me is (and I don't have my 6475 letter yet) is it mentioned the total of all 3rd round payments. As I understand it, we (MFJ) qualify for $2,800 total (which we received between a paper check in March, and a direct deposit in May).
-ERD50

The first two payments were made in 2020. Only the 3rd, which came in 1Q, was 2021. There was no May 2021 payment.

 

[cathy63]

What struck me is (and I don't have my 6475 letter yet) is it mentioned the total of all 3rd round payments. As I understand it, we (MFJ) qualify for $2,800 total (which we received between a paper check in March, and a direct deposit in May).

Now maybe the terminology is throwing me. The paper check makes no reference to it being a 1st, 2nd, or 3rd payment, it just says "Economic Impact Payment". The direct deposit at least had a "TAXEIP3 " notation, which I take to mean "Economic Impact Payment #3".

So maybe I'm supposed to add both of the payments together as the "3rd"? That would seem to resolve this (they add up to the full $2800), TaxAct would then (I assume) net it out and say I have no additional credit due, and would not credit my refund/due amount. That would seem to reflect the reality of it, if I'm understanding it correctly.

I guess I need to see that letter to better understand this?

Yes, the check is the "plus-up" payment and you're supposed to add them together. Everything you received from the IRS after March 17 is either part of EIP3, or it's a tax refund or interest for a prior year's return. If the check says "Economic Impact Payment", then it counts for EIP3 and can't be a refund or interest.

The first two payments were made in 2020. Only the 3rd, which came in 1Q, was 2021. There was no May 2021 payment.

There were additional payments for people whose initial EIP 3 was based on their 2019 tax return and came out to less than $1400. Once their 2020 return was processed, the IRS recalculated the amount they should get and if it was more than the initial payment, they sent out the difference as a check. They sent these payments starting in May and ending in December last year, so many people did get two payments and have to total them up for their tax return.

The 6475 letter and IRS.gov account have the total of all payments sent for each person, so for an MFJ return you have to add each individual's numbers together.

 

[aja8888]

H&R Block tax software asked if we got the 3rd stimulus check (deposit) and I filled in the amount when I looked back into my checking account to verify it (Mid March 2021 IRS Deposit to our account). I sent the tax return in last week via e-file.

Today I received the IRS letters mentioned in the above posts. Timely stuff.

 

[ERD50]

Yes, the check is the "plus-up" payment and you're supposed to add them together. Everything you received from the IRS after March 17 is either part of EIP3, or it's a tax refund or interest for a prior year's return. If the check says "Economic Impact Payment", then it counts for EIP3 and can't be a refund or interest. ... .

OK, great, this is all adding up then. And I did verify that these were stimulus payments ("EIP3" noted on the direct deposit in May 2021; "Economic Impact Payment" noted on the paper check in March 2021). I did get a Fed Tax Refund, but I recognized that for what it was.

So I'll enter the sum of those 2 checks/deposits as my '3rd payment'.

Thanks to all (except maybe the IRS and/or Congress and/or TaxAct for making this so obtuse)!

-ERD50

 

[jebmke]

Don't do this. We have seen a couple of different outcomes when people told us they had not received the stimulus so we claimed it on their tax return and then later they figured out that they did get it. Sometimes the IRS has reached into the account where they originally deposited the stimulus and taken it back. For some this has happened before they got their refund which also included the stimulus, so people were out $$$ for a few days until the tax refund arrived. Other clients have gotten letters and the entire refund has been held up until they respond, which means sending a letter/form, and we all know how quickly the IRS is opening and responding to paper mail. There's an option to call and wait on hold, but I haven't heard how that's working out.

There are very few situations where an ignorance plea will change an outcome with the IRS. The only one I know of is inadvertent failure to take RMDs. Most waiver request on 5329 are granted if the explanation passes the smell test.

 

[ERD50]

Quote:
Originally Posted by Aerides View Post
The first two payments were made in 2020. Only the 3rd, which came in 1Q, was 2021. There was no May 2021 payment.

There were additional payments for people whose initial EIP 3 was based on their 2019 tax return and came out to less than $1400. Once their 2020 return was processed, the IRS recalculated the amount they should get and if it was more than the initial payment, they sent out the difference as a check. They sent these payments starting in May and ending in December last year, so many people did get two payments and have to total them up for their tax return.

The 6475 letter and IRS.gov account have the total of all payments sent for each person, so for an MFJ return you have to add each individual's numbers together.

So just to close the loop on this, I entered the sum, and it all comes out as expected (no additional credit applied, as the sum was the full $2,800).

And just to verify the cause, I looked at me 2019 AGI and my 2020 AGI. Now I recall, I had some 'lumpy' income in 2019, and my AGI was just above the point where they start reducing the payments. Then my actual 2020 AGI, was below the limits, triggering a 'make up' payment. So that all adds up to cathy63's explanation.

Thanks again.

-ERD50