This article will help you generate or suppress the Recovery Rebate Credit, understand how Intuit Lacerte handles the credit, and resolve diagnostic reference #54547. For answers to frequently asked questions about the Recovery Rebate Credit and economic impact payments (also referred to as EIP or stimulus), click here.
To generate or suppress the Recovery Rebate Credit:
- Go to Screen 38.2 Recovery Rebate, CTC, EIC, Other Credits.
- Locate the Recovery Rebate Credit section at the top of this screen.
- Enter the amount of Economic impact payment 3 received, or enter -1 to indicate zero.
If left blank, the program will assume your client received the full amount of EIP and suppress the credit.
Economic impact payments for dependents
Enter the economic impact payments the IRS issued to the taxpayer (and spouse, if applicable) here. This includes any increased EIP the taxpayer received for qualifying children based off prior year tax filings.
Taxpayers who didn't receive any EIP because they were claimed as a dependent in prior years, and who were no longer dependents in 2021, may be able to claim a Recovery Rebate Credit. These taxpayers should not enter any EIP amounts that were received by another individual. Enter -1 to indicate none.
Returns with deceased individuals
Taxpayers who died during 2021 or 2022 are considered eligible for the full amount of Recovery Rebate Credit. This includes taxpayers who died in 2021 and 2022.
Regardless of an individual's date of death, they may still claim the Recovery Rebate Credit if they didn't receive the full amount of EIP 3 and they meet the other requirements for the credit.
Using the Taxpayer and Spouse columns
On married filing joint returns, you can enter the taxpayer and spouse EIP amounts separately to control who the payments are assigned to on the MFJ/MFS comparison worksheet and if you decide to split the joint return. Using the separate columns doesn't impact the credit computation.
For payment amounts attributable to a dependent, enter them in the column of the person claiming the dependent this year as noted on Screen 2 Dependents.
What if my client isn’t sure how much stimulus they received?
Use Letter 6475 to confirm the amount of EIP 3 and plus-up payment your client received. The IRS will send Letter 6475 in early 2022 to taxpayers who received EIP 3.
Additionally, you can refer to Notice 1444-C. The IRS sent this notice to taxpayers who received EIP 3 - the only economic impact statement issued in 2021. If your client didn’t keep the notice, they may need to review their bank statements (for records of direct deposit payments or deposited checks), or view past notices at IRS.gov/account. If you can't confirm the exact amount of payment received, enter your best estimate. The IRS will confirm and adjust any Recovery Rebate Credit amounts before issuing the credit.
Diagnostic ref. 54547
If you don’t make any entries on screen 38.2, the following informational diagnostic may generate:
This return may be eligible for the Recovery Rebate Credit. To compute the credit, an entry must be made in "Economic impact payment 3 received as shown on Notice 1444-C (-1 if zero)". You may leave the entries blank to not compute the credit. US - Ref #54547
This diagnostic will generate when your client meets the general eligibility requirements for the credit, but the credit isn't being carried to Form 1040, Schedule 3. Follow the steps above to enter an EIP 3 amount or indicate none was received.