I have been deluged with clients asking about their stimulus three payments wanting me to prepare the 2020 return so they can get that sweet sweet cash. I've tried to explain that it's also based on 2019, and that adjustments will be made based upon 2020 return as compared to 2019.
I apologize if this has been asked and answered and I've looked through the forums as well as the IRS instructions, but I am unclear still and have advised the client to hold on to their overpayment - the taxpayers (married joint, with one dependent in 2019) received 1,400 for their son, who filed his 2020 return and claimed himself (he graduated from college) - he also received 1,400 based upon his 2020 return.
Some stimulus overpayments have not been required to pay back, but I am unclear as to whether or not the parents will need to repay the 1,400 they got for their son, who they won't be claiming in 2020, but claimed in 2019. Again, I advised them to set that money aside for now and be prepared to repay it.
The second issue I have is personal, also stimulus related. My AGI is over the threshold for 2019 and I haven't prepared my 2020 return as of yet.
Yesterday, I received an email from my bank notifying me that my wife and I received 1,400 from the IRS. Two things here, one which is more concerning than the other:
1 - I've used three different stimulus 3 calculators, as well reading through the IRS guidelines, and it is beyond clear that we are not eligible for #3 ---- so, I'm heading down to the bank to see if perhaps it was mistakenly deposited into my checking account.
2 - I have never given the IRS my account number, nor have I used this account for direct deposit when I've made an ACH payment or received (ha ha ha ha ha ha) a refund - I use another bank account which I still have. I know the IRS has knowledge of our bank account info, but I just opened this account within the last year and am surprised that a stimulus payment was deposited into this account.
My guess is that someone else's stimulus was deposited into our account by mistake, so I'm headed down to the bank when I take a short break in a few.....
Are you sure your 2019 return has been processed? Maybe they are using 2018.
Are any direct deposits going in to that bank account? Social Security, VA benefits, government pension?
EIP#3 rule is the same as the first two: If you get too much, you don't have to pay it back.
It appears, based on my client calls, that 2019 info was used for paying this Stimulus.
Clients with new bank accounts that were filed and received their refunds for 2020 in the correct account, received the Stimulus direct deposited to the bank account on the 2019 return, which was of course was rejected and now they are waiting on a check.
I believe as part of the new tax law, there is a provision that allows tax preparers to strangle up to 4 clients per week. If you do go over the quota, the only penalty is reducing the upcoming week's quota by the number that you exceeded the current week's allowance. So choose wisely so that you don't use up your total allotment before May 17th. Isn't this a fun tax season? 😬
UPDATE - - The stimulus deposited to my account was someone else's 🙂
Possible reason for the error is that possibly the deposit was hand-coded into the account and there was as transposition or other input error and that it was input by hand due to some "readability" issue with the equipment that reads the data.
Oh well, easy come, easy go 🙂