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RECOVERY REBATE CREDIT

gk
Level 4

Hi,

One of my client  did not receive any money under CARES Act ( they suppose to get $3400) and only $600 in the second stimulus ( suppose to get $2400). Can he eligible to get rest of the stimulus money (ie $5200) when they do the tax this year? Kindly advise

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Just-Lisa-Now-
Level 15
Level 15

The recovery rebate gets reconciled on the return, so if they didnt get as much as they were entitled to during 2020, they can pick up the remainder on the 2020 return. 

It settles better in my brain by seeing the mechanics happen right on the screen by plugging in a "what if" situation into the 1040 and seeing the outcome.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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11 Replies 11
Just-Lisa-Now-
Level 15
Level 15

Im sure you learned about this in the Continuing Education you took in preparation for this upcoming tax season.

Open up the 1040 for this client and plug in some estimated figures for them so you can see how the reconciliation works.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
gk
Level 4

Hi Lisa,

I am taking the the Tax season Readiness virtual conference on Jan 6-7. 

 

Sincerely

Gk

Just-Lisa-Now-
Level 15
Level 15

The recovery rebate gets reconciled on the return, so if they didnt get as much as they were entitled to during 2020, they can pick up the remainder on the 2020 return. 

It settles better in my brain by seeing the mechanics happen right on the screen by plugging in a "what if" situation into the 1040 and seeing the outcome.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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Hillenburg
Level 3

Lisa, where is this entered on the return ?  I'm not seeing it. Thanks.

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Just-Lisa-Now-
Level 15
Level 15
Looks like Line 30 of the 1040/1040SR Worksheet has a quickzoom to the worksheet for it.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
Hillenburg
Level 3

Thanks Ms. Lisa .

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gk
Level 4

Lisa,

I see the work sheet but that states only about First stimulus payment. How do we reconcile Second stimulus money if they didn't get it. 

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Just-Lisa-Now-
Level 15
Level 15
Oh I doubt the software has been updated for the second one yet, give it a couple weeks

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
gk
Level 4

Great. Thank u Lisa

BobKamman
Level 14

Would there happen to be some SSN's not eligible for employment involved here?  Family of four, but only one US citizen or qualifying resident alien?  

itonewbie
Level 15

Read that some of the aliens with SSN ineligible for employment were, indeed, sent EIP.

I also wouldn't rule out that some (few may there be) who were sent paper checks (and Notice 1444) just never received them and the IRS may not agree with those reconciliations on the return.  There will probably be a few notices here and there.

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