Taxpayer asks:
Punched in all the numbers in TurboTax for my 2008 taxes. The first thing It asked was how much my 2008 Economic Stimulus rebate check was ($2100). Surprise, surprise, it reduced my 2008 refund by $2100. According to the IRS web site the rebate should not effect by 2008 refund plus or minus. Is this right?
Taxgirl says:
Your rebate check from last year should not result in a reduction in your tax refund. (It could, however, result in a bigger “refund” check or a reduction in federal tax owed if you have not yet received your full rebate check from last year, though only about 3% of taxpayers are affected).
I haven’t seen a version of TurboTax for this year, so I can’t comment on the specifics. However, the good folks at Intuit are in the know about the rebate and have made accommodation in the software. If there’s a problem not related to your actual rebate check from last year or your eligibility, it may be a skipped line entry or some other confusion. I’d recommend contacting Intuit and having them take a peek. Their contact page indicates that you can call, email, or chat online to get answers.
Good luck!
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I entered an amount on my sister’s, my mother’s, and my own return and it had no effect on any of the returns…
I think what happened here is that when you start out the software assumes that no economic stimulus was received and calculates your “anticipated” refund according FOR THAT MOMENT IN TIME. As more info is entered, the refund amount is continually adjusted accordingly. Thus, when the actual economic stimulus is entered the refund takes that into account. It isn’t really reducing your refund, it is just reflecting what is now in the software. That’s the way TAXWISE works, I would assume Turbo Tax is similar.
Hey Sarah, Thanks. That makes a lot of sense!
Your 2008 tax liability is not affected by your stimulus check. However, based on your 2007 filing status, dependents and income, you were entitled to a $2,100 “rebate”, which you in turn received. If for whatever reason you did not get your $2,100 check during 2008, you are to get it with your tax return. Turbo Tax correctly has recalculated your 2008 rebate check and then, if you told it you didn’t receive your check earlier, it added it to your 2008 refund. When you plugged in that you did get the money, it took it out to keep from doubling it up. That’s how it should work; the software did its job perfectly.
Thanks Tom. I haven’t seen the software but that makes sense and is in keeping with what Sarah said earlier.
as a customer rep at IRS we are already seeing plenty of errors with the Rebate Recover Credit, The IRS will automatically adjust the return correctly and spit out a a notice of change to your return. Of course, if you do not put in the correct amount that you received for the Economic Stimulus Payment it will reject your return. And the phones were ringing off the wall when people heard that an Economic Stimulus Bill was passed. There are “no” checks being mass mailed. Thank God! It cost more money to send notices and mail checks than to give the economy a boost. which I don’t believe it ever did. Please share the info with your friends. IRS is not issuing checks for Economic Stimulus!
Thanks for the info I am starting with Turbo tax and will be careful on the interview.
There is also a calculator on the irs website at http://www.irs.gov. if you think you are suppose to get an additional amount and Turbo tax does not calculate one, you find it may have other factors calculated in. For instance a person did not file a tax return last year. Did not get any ESP(economic stimulus payment) made over $3,000. in 2008,was not claimed on anyone return last year or this year, married filing separate. Due to his AGI of 8,008 he was not entitled to the Rebate Recovery Credit. I was confused. I did the calculator. He was not entitled to the Rebate Recovery Credit. If he filed in 2007, He would have received $300.