IRS stimulus payments

[GolfTravelDude]

Got a question. The 2nd part of the stimulus was paid out in January 2021. Did anyone input that income into their 2020 return? Upon doing my return I didn't input that payment of $1200. And now the IRS has come knocking saying they want the $1200 back. My return garnered a $1200 credit and now the IRS wants a $1200 payment. Anyone else have this situation?

 

[DaBuckBoys]

I used H & R Block software. It asked if I had received it but it didn't affect the return.... this year.

 

[Reframmellator]

How did you do your taxes? If software or a preparer, they should be able to help you, possiblyu with fees involved. You can still get 2020 tax software and potentially file an amended return (that may not be possible if the IRS has come after you, but I'm not a tax accountant or attorney.)

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[GolfTravelDude]

The IRS has deemed the government stimulus payment which I received in January and was released on January 6th per their records by the Fed as income for 2020. I didn't include it and when figuring out the Recovery Rebate Credit....Thus I got a $1200 credit. The IRS has sent me a notice saying I owe $1200 based on my error of return. My simple question is....Did anyone else do what I did? I have always put income in the year it was received....But right now it seems stimulus payments made in January 2021 are deemed as 2020 income....

 

[Reframmellator]

Fortunately, we did not have to worry about a stimulus payment. It sounds as though you used the very common cash method for accounting for income. Again, not a tax guy, but the IRS classifies the stimulus payments as tax credits, not income. Because it's not income, the cash method likely does not apply in your case, because it's a tax credit, which the IRS defined as being applicable to 2020.

Your Congressional Representative's office can probably tell you how common this is based on their phone calls.

 

[McLovin]

pm me for more info, but it sounds like you owe it back if you received the advanced payment in january and also claimed the credit on your 2020 tax return.

 

[GolfTravelDude]

pm me for more info, but it sounds like you owe it back if you received the advanced payment in january and also claimed the credit on your 2020 tax return.

That's exactly what I did and I'm amazed Tax Slayer didn't pick that up. Tax credit payment vs cash payment. Yea we owe it back.

 

[Stryker]

My accountant asked me if we had received all the stimulus payments when she did our taxes. She said that so many people missed getting theirs that they are asking because if you did not get it then it will be included on your tax return.

 

[JW Smoove]

pm me for more info, but it sounds like you owe it back if you received the advanced payment in january and also claimed the credit on your 2020 tax return.

This, seems you received both the stimulus and the credit. So one has to go back. Barring fees/penalties should be a wash.

 

[DataDude]

pm me for more info, but it sounds like you owe it back if you received the advanced payment in january and also claimed the credit on your 2020 tax return.

Love having experts in other stuff in the community!!!

 

[McLovin]

That's exactly what I did and I'm amazed Tax Slayer didn't pick that up. Tax credit payment vs cash payment. Yea we owe it back.

unfortunately there is no authentication system in place to catch this during filing. fortunately only one of my clients goofed and told me he didn’t receive a payment that he actually did, so he received a love letter from irs similar to yours.

what is incredibly stupid is irs didn’t devise a form to send taxpayers confirming what they received. there was a portal, but it was too clumsy. it wouldn’t have been difficult to create something like a 1099-eip to tell people how much they received.

 

[RabidWombats]

unfortunately there is no authentication system in place to catch this during filing. fortunately only one of my clients goofed and told me he didn’t receive a payment that he actually did, so he received a love letter from irs similar to yours.

what is incredibly stupid is irs didn’t devise a form to send taxpayers confirming what they received. there was a portal, but it was too clumsy. it wouldn’t have been difficult to create something like a 1099-eip to tell people how much they received.

That portal was a disaster. It took me longer to get set up on the IRS website to double check that I was inputting the correct $$ than it did to complete my taxes.

 

[Matthew]

Stimulus check? No, not here.
But a friend of mines mother passed away before the 2nd round of checks went out, they sent her a check addressed as (deceased) Name. When he called to see what he needed to do, they told him to keep it. She was alive on whatever the cut off date was and was due the stimulus. I guess the point is, they knew she had died it said it right there on the payment. Why send it out anyway? Very off topic & sorry for the derail.