IRS Refund and How to Get the Stimulus or Recovery Rebate Credit You Deserve

Woman Looking at Tax Form for IRS Refund

Are you still having troubles with the IRS in regard to getting your refund? Well some of this stems from the shutdown due to the pandemic that they are still digging out from the time they closed. You guessed it the mail kept coming in anyway. So people are still calling and having trouble getting through.

But a good number of people may have not received a stimulus payment yet. If you didn’t, you were told by many to file a return and claim the Recovery Rebate Credit in the year you missed the payment. Per adult the first one was for $1200, the second one was for $600 and the third was for $1400. You got even more if you had qualifying dependents too. If you never got one of those that’s what the Recovery Rebate Credit was for. It’s on line 30 of the return. This may sound easy, but there are potential problems.

Although the stimulus payments aren’t taxable, they reduce the amount of Recovery Rebate Credit you can claim. And if the computers at the IRS see that it was paid and you try and claim the Recovery Rebate Credit for the missed stimulus you will get a “math error” notice instead of a refund. Any time you get a letter starting in “CP” that’s a computer generated letter. Math error notices CP11 through CP13 state you did something wrong and the one for the Recovery Rebate Credit is confusing to some. They list a series of “potential” problems starting with a bad SSN (social security number) but in most cases it’s the last thing on the list you just miscalculated the credit. Miscalculated you say? You never got it how was that possible?

Well remember if the computer thinks you were paid a stimulus payment it will take it off your return and send you that notice. If you never got the check or deposit, the IRS will have to research where the money went by maybe tracing it. Sometimes the money went to the preparer’s bank where they deduct their fee and send it onto your bank. If your bank account was wrong or the account was closed in this scenario it’s sent back to the originator, not the IRS but the preparer. Even if you use a program like Turbotax or H&R Block it could go from the IRS to them, the preparer tries to send it to you but it bounces back to them. In other words, the IRS doesn’t have the money they do. Still, if it’s your bank account because you wrote it on the form or typed it into the program, it can be then sent as a paper check.

But if you moved, it’s now coming back to IRS again! It will sit there too until you contact them or your address changes. It’s literally frozen there until something like that happens. For example, I got an IRS refund check at my house for someone else. I returned it to the post office. It will go back to the IRS and it’s credited back on the account and will wait for the person to call in or something like an address change happens to convince the computer that it now knows where to send the money.

Now stimulus payments can be tricky. At some point in the year they just won’t go out again once a trace is done because at some point they turn that ability off when the next year’s returns will be coming soon. Sometimes they have to manually put an adjustment on the account to put a credit onto the account to force it out the door.

So if you do get a math error notice saying they took away the Recovery Rebate Credit because they already sent payment you should try and call the IRS. Ok so you can’t get through. Then respond to the IRS in a letter of your own and be specific. If you can’t get through, then you need to change your method of contacting them with a written letter.

Remember first you should figure out what you were due. Were you qualified for the stimulus? Then did you already get it. The first two sets of stimulus payments were for the 2020 year and the $1400 one was for 2021.

When figuring the amount you were due you have to remember who was on those returns. Did you have three people on 2020’s return and three people on 2021 but just not the same people does that mean anything?

Some people had different dependents in 2020 and 2021. For example, you switch off which parent claims which kid. Or say you had a dependent in 2020 and lost one but had a new child in 2021. So the third stimulus payment was sent in the first quarter usually before the 2021 return was processed so the amount you got was based on the prior return in many cases. So if the number of qualifying people for the stimulus didn’t change the amount you already got is all you are going to get! The stimulus is again limited to the number of qualifying people on the return. Even if you had different dependents in 2020 vs. 2021.

There are other letters going out too, like the CP32A, If they sent you a refund (or the stimulus) check and the computer sees you never cashed it. The money at this point is on the account. Again it’s another computer generated letter asking you to call in. If you can’t through, then write a letter saying what you are responding to and say I live here now. And they will not send it to another bank account!

Hopefully, this pandemic will be ending soon and all the piled up work will be finished. But don’t get frustrated if you can’t get through to the IRS, there is always the mail.

Don’t file an amended return just to claim a Recovery Rebate Credit that’s going to delay your money by up to twenty weeks! Yeah that’s how long an amended return takes to process. The IRS can and does want to fix this faster for you to get the refund you are entitled to.

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