Recovery credit for separated parents?

[kathyc2]

Greetings.

I'm confused on recovery credit for separated or divorced payment that alternate claiming children.  On 2019 return mother claimed children  and presumably received the EIP.  Father (my client) will claim kids on 2020 return.  It doesn't seem like he should get the credit, but the Recovery worksheet doesn't seem to address the issue, nor does anything that I'm finding.... 

[Margaret CPA in OH]

Same situation just landed here, but reversed.  It appears as though both end up getting the money as the payouts were first determined by 2019 filing to be adjusted for 2020 filing. Gaahhh!  My brain hurts with this and APTC.

[Pacun]

Forget what happened and to who in the 2019 return. Concentrate on the return you have been hired to do, which is 2020. 

Finish the return and ask: How much did you get on your first stimulus? most likely the answer will be $1,200. Click on line 30 and answer that the person has a valid social security and enter $1,200 for the first stimulus. Then ask the person how much he received for the second stimulus and enter that number too.

You are done.

Of course it will be nice if you know how much stimulus they deserve. So if they are claiming two children under 17 for 2020, the first stimulus should have been $2,200 and the second $1,800. If you enter the correct amount received the computer will do the hard work for you.

If the client inquires: Will the IRS ask my ex for the money back? Just say NO.

 

[kathyc2]

It doesn't seem correct that both parents should receive the total amount the same child. But as quickly as they threw this together, it could be an oversight.  Pacun, can you share the source of your information?

[Pacun]

CARES ACT

[ampCT]

They both get it. Check out the last "plus mark" on this page: https://www.irs.gov/newsroom/economic-impact-payment-information-center-topic-j-reconciling-on-your-2020-tax-return

I can't tell you where I originally heard this, but I caught it in training somewhere. Filling out the reconciliation automatically gives you the extra payment if you are truthful about the amount you actually got. BTW, the same works if your client was a dependent last year and claiming herself this year.

[joanmcq]

I was just looking for the answer to this question!  Have recently divorced couple and the kids live full time with one parent but we juggled the 3 kids to optomize refunds last year.  Nice to tell the custodial parent she will get more stimulus.

[kathyc2]

12 hours ago, ampCT said:

They both get it. Check out the last "plus mark" on this page: https://www.irs.gov/newsroom/economic-impact-payment-information-center-topic-j-reconciling-on-your-2020-tax-return

 

Thank you!  Exactly the type of confirmation I was looking for. 

[Pacun]

5 hours ago, joanmcq said:

I was just looking for the answer to this question!  Have recently divorced couple and the kids live full time with one parent but we juggled the 3 kids to optomize refunds last year.  Nice to tell the custodial parent she will get more stimulus.

I have had that situation a couple of times this year and the parent who is claiming the three children in 2020 gets a nice extra $3,300. 

I was hoping that swapping the kids could help but NO. I have a few unmarried people that each claim one child, at first I thought that if I swap them, I would get the benefit but NO. 

[Lion EA]

Yeah, it's the number of kids and not which kids. The number of people on the 2020 return are how many who get the 2020 RRC. Just focus on 2020. 2018 and 2019 EIP were only advances on the 2020 RRC. You just have to know if THIS client (not the ex or anyone else) received any advances to enter on the worksheet. (Don't look ahead to EIP# yet!!!)