Tax News

Recovery Rebate Credits Getting Separated from 2020 Tax Refund?

Over the last few days, as federal refunds have started to get disbursed, we have been noticing some unexpected behavior regarding tax return acknowledgements and tax refund figures. While investigating refund figure changes, we noticed that the discrepancy appears to be the exact amount of the recovery rebate credit from line 30 on the 1040. We have had no preemptive notification of this from industry banks nor the IRS, and we are working to get more information. The general assumption is that due to the nature of tax return offsets, the recovery rebate credit is being separated to ensure that it does not accidentally get offset due to a regularly permissible tax refund offset reason (e.g.  student loans, prior year tax debt, etc.). The recovery rebate credit is only able to be offset to pay child support. 

If you have noticed that your client’s refund appears to be less than the requested amount, check the recovery rebate credit line on the 1040. 

Additionally, we understand that many of your clients’ may have filed a stimulus only return, and we are working to get information on how those refunds may be impacted. 

Tina Harvey

Recent Posts

Corporate Transparency Act On Pause

Just yesterday, Dec 3rd, there has been a nation wide preliminary injunction against enforcement of…

3 weeks ago

Tax Help Phone Numbers for Professional Tax Preparers

Who do professional tax preparers call when they need help? The answer is, like many…

5 months ago

Tax Certifications For Professional Tax Preparers

Tax season is a busy time for everyone involved, but it's especially important for taxpayers…

1 year ago

IRS Shutting Down MeF E-File System on November 18th, 2023: File Your Taxes Early!

The Internal Revenue Service (IRS) will be shutting down its Modernized e-File (MeF) system on…

1 year ago

2024 PTIN Renewals Open

The PTIN portal is officially open for new 2024 PTINs and for PTIN renewals for…

1 year ago

How Do I Get an ITIN?

An Individual Taxpayer Identification Number (ITIN) is a nine-digit number issued by the Internal Revenue…

1 year ago

This website uses cookies.