Those $600 rebate checks most of us received last summer should be a distant memory now. But they're not.
Instead, they are causing all sorts of headaches for taxpayers preparing their taxes.
Did you receive a rebate check last summer? If so, brace yourself. You'll have to enter the amount on your tax forms, and that's the problem.
The IRS says 15% of filers are incorrectly entering last years $600 check as income. One reason is that an early version of Turbotax makes the rebate lower your refund. Turbotax has since corrected that problem.
From the IRS web site
If the taxpayer or preparer is using tax software, the amount of the recovery rebate credit will automatically be calculated and reported properly. If the taxpayer is using the paper method, the recovery rebate credit, as determined through the worksheet, should be reported on Line 70 of Form 1040, Line 42 of Form 1040A or Line 9 of Form 1040EZ.
What to know about the stimulus for taxes
- The rebate is not taxable.
- You do not have to pay it back.
- It should not reduce your refund.
From the 'Doesn't that stink?' file, the fact that this is an issue at all.
Why couldn't the IRS just have a checkbox for people who did not receive their rebate, avoiding this confusion? Doesn't that stink?
The bottom line is that the IRS could have avoided this mess by not requiring filers to enter the rebate on the tax form.
If it looks wrong to you, call your tax preparer or the IRS so you don't waste your money.