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Economic Stimulus Checks

dlmcferran
Level 3

When a taxpayer dies in 2020 before stimulus checks are issued the IRS says they must be sent back. When this situation happens, Lacerte still tries to give them a Recovery Rebate Credit on line 30 of the 1040 form.  To complicate things, Lacerte's help screen says that this payment is valid even though the IRS says NO WAY. 

Appreciate comments and who's right, Lacerte or the IRS?

Dennis McFerran

RTRP, San Jose, CA

 

 

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qbteachmt
Level 15

It's for all of 2020.

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.

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


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.

*******************************
"Level Up" is a gaming function, not a real life function.

View solution in original post

4 Replies 4
qbteachmt
Level 15

It's for all of 2020.

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.

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


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.

*******************************
"Level Up" is a gaming function, not a real life function.

View solution in original post

dlmcferran
Level 3

Crazy.  Why did they insist on having those checks returned and then return the amounts on the 2020 tax return?  Oh well, my clients survivors won't be upset.

Dennis McFerran

 

 

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qbteachmt
Level 15

"Why did they insist on having those checks returned"

Because many of them were issued to people who died in 2018 or in 2019, since the Projected advances were never based on 2020.

*******************************
"Level Up" is a gaming function, not a real life function.
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IRonMaN
Level 15

Shorter answer - they do get the credit

ACME Taxes, Tatoos, Tires and Turtles (I've expanded my line of products to better serve you)