deduction from stimulus payment??

[schirallicpa]

Client has received a check for the recent round of stimulus.  The household includes himself, his wife, and his dependent daughter.  So the check amount would be $1800.  Right?  But his check was for $1736.65.  Can you guys help me on this one?  There was no paperwork or explanation with the check.  

[Gail in Virginia]

Is there adjusted gross income above the $150,000 threshold where the phase out begins?  I still would have thought it would come down in even $100 amounts.  The payments were not supposed to be offset so other than that I have nothing.  Maybe someone else has an idea.

[Pacun]

For sure the IRS got the information from a year that your clients made a bit more than $150K.  Check their 2019 or 2020 return and you will find your answer.

Again, if they deserve more, request it on 1040 for 2020.

[grandmabee]

Child support is the only thing that is supposed to be used for offset.  But with those numbers I agree  over the 150,000.

[Pacun]

The second stimulus is untouchable. Not even by child support.

Plus, $63.35 is too little for the support collection agency to report you to the collection agencies.

[Pacun]

I could be anything because the second check seems to be available to past due obligations.  I just posted this comment on a new thread:

We just received a $30.50 check from the IRS. On the first stimulus, we got a credit card for $1,200, exactly half because we made $175K in 2019. 

On the second stimulus we were expecting half again ($600) but I guess the IRS paid taxes owed for 2019. 

What I get from this situation is that we better depend on what the IRS will have on its website because people like me will say: "we only received $1,200 on the first round and $30.50 on the second round. 

[Lion EA]

EIP2 is NOT supposed to be taken for anything, not even child support. Did the couple make almost the top of the phaseout range? What is it, 5% for every $1,000 over the threshold?

[Pacun]

54 minutes ago, Lion EA said:

EIP2 is NOT supposed to be taken for anything, not even child support. Did the couple make almost the top of the phaseout range? What is it, 5% for every $1,000 over the threshold?

But mine was supposed to be 600 and we only got $30.50. Which is about the amount we owed in interest and penalty for 2019.

[Lion EA]

What does your Notice 1444-B say?

[Tax Prep by Deb]

1 hour ago, Lion EA said:

What does your Notice 1444-B say?

My mom got one but I never got a notice for either payments.  Chances are good one was never sent.

[Pacun]

15 hours ago, Lion EA said:

What does your Notice 1444-B say?

The first time, I got a credit with instructions on how to connect on line to transfer the funds.

On the second stimulus, I got a check and that's it.

[schirallicpa]

no notice.  

 

[Lion EA]

Pacun, did you make just under $175,000? In round numbers, $25,000 over at 5% = $1,250 to subtract. For EIP1 @ $2,400, you received about $1,150 or so. For EIP2 @ $1,200, you received about $0 or so, right? EIP2 was a smaller amount for all families, so it "disappeared" faster. Do the math. Unfortunately, we'll be doing the math for all our clients!!

[Pacun]

1 hour ago, Lion EA said:

Pacun, did you make just under $175,000? In round numbers, $25,000 over at 5% = $1,250 to subtract. For EIP1 @ $2,400, you received about $1,150 or so. For EIP2 @ $1,200, you received about $0 or so, right? EIP2 was a smaller amount for all families, so it "disappeared" faster. Do the math. Unfortunately, we'll be doing the math for all our clients!!

You are right income was just below $175K. So the income is up to $175K for the second stimulus for MFJ. I wonder how the software will handle that. I am going to test with $180K to see if the software claims the second stimulus is 0 and about 1K for the first one.

[Lion EA]

Depends on amount you were expecting. A couple with two kids would've expected $3,400 for 1st and $2,400 for second. So, at $175,000 they should've received $2,150 and $1,150. Single, it's 5% of excess over $75,000 subtracted from expected $1200 and $600; but having a couple of kids changes the base numbers to $2,200 and $1,800 and then subtract 5% of excess. It's going to be a real pain explaining it to our clients, especially remotely! I'm one for pointing and color highlighting. Might have to Zoom instead of telephone and email...

[Sara EA]

From the research I've done, it appears that neither round of stimulus checks could be offset for anything but child support, so I agree that your clients were likely in the phase-out range.  (Those numbers with cents in them are baffling though.)  However, the "recovery rebate," which is the amount you receive on your tax return because you didn't get the amounts you were entitled to earlier, can be offset for the usual back taxes, student loans, etc.  This tax season is going to be the second one frustrated by these payments.  Last year it was the zillion phone calls about when, how much, I didn't get mine.  This year it will be the same plus disputes over the amounts (if they remember the amounts). Every client who claims a recovery rebate will have to warned that the refund calculated on the return may not materialize.  We are so tempted to put another option on our phone lines:  "If you are calling about your stimulus payment, press 7,"  which will give them the IRS number.  Either that or fire all the clients except those who make too much to be eligible.  So tempting....