Recovery rebate credit

Forum|Forum|5 years ago
March 2, 2021
2 replies
12 views

I have clients who are a married couple and a MFS/MFJ comparison shows a $453 higher refund overall married filing separately.

It is only due to the fact that the spouse will receive a much higher recovery rebate credit by filing MFS.

Is this a glitch in the program or will the IRS allow us to use a different filing status than the year of the initial stimulus payment in order to maximize the recovery rebate?

Thanks for any replies.

Lacerte Tax

This topic has been closed for replies.

qbteachmt

Level 15

This is moot: "than the year of the initial stimulus payment"

The "year of the stimulus" is 2020.

Perhaps it would help to review what is really happening:

The funds were paid out as Advanced payment against a projection. The projection used 2018 or 2019 tax returns. But 2020 is the Actuals. You use the 2020 return to reconcile what a person is entitled to, against what they got.

If the person is not a dependent in 2020, then they would be entitled to the payment/credit as individual filers. That doesn't mean "not being claimed." It means "no longer qualifies as a dependent."

You might want to bookmark these links and read the IRS guidance.

Interactive wizards portal for determining dependency:

https://www.irs.gov/help/ita

And:

https://www.irs.gov/newsroom/economic-impact-payment-information-center-topic-a-eip-eligibility

https://www.irs.gov/coronavirus/second-eip-faqs#Eligibility

One for each EIP.

Don't yell at us; we're volunteers

J

John8290Author

Level 3

Thanks for the reply.

I did check out the IRS FAQs on this but did not see anything that specifically addresses having a different filing status in 2020 than 2019. Since the advance payment was based on a filing status, I assume it must be taken into account.