• Unmarried Parents; Their Kids; Third Round of Stimulus Payments

    From honda.lioness@gmail.com@21:1/5 to All on Tue Mar 8 17:25:23 2022
    Parent Liz and Parent Raymond share custody of three-year-old Child X. Per a court order, Parent Liz takes Child X as a dependent et cetera in 2020.

    Parent Liz receives $2800 total in March of 2021. This represents the third round of stimulus payments. The $2800 reflects the reality of Parent Liz having taken Child X as a dependent in 2020.

    The Parents proceed to have another child ("Infant Y") in June of 2021.

    Per the court order, Parent Raymond takes Child X as a dependent et cetera in 2021. Parent Raymond filed his taxes a month ago, taking Child X as a dependent and reporting that his household received all of the third round stimulus payments that were
    owed.

    Parent Liz just started yesterday doing her taxes with help from the local VITA site. Parent Liz plans to take Infant Y as a dependent for 2021. During the VITA interview, Parent Liz reports that she already received $2800 for the third round of stimulus
    payments, for her and Child X. Per the Taxslayer software, she is owed no more.

    Now: $1400 is out there, to be claimed somehow, on account of Infant Y entering the world in mid-2021, but clashing with IRS rules for filing one's taxes and/or software limitations.

    Options as I see them:

    Option 1.
    Parent Liz goes ahead and files now, taking Infant Y as her sole dependent et cetera. Parent Raymond subsequently amends and removes Child X as a dependent. Once Parent Raymond's amendment is complete, then Parent Liz could amend, adding Child X as a
    dependent.

    The drawback of this plan is that, first, the IRS is incredibly backed up when it comes to processing amended returns. We may very well be looking at a few years before the dust settles and the IRS processes Parent Raymond's amended return. Second, then
    the IRS may take another few years to process Parent Liz's amended return. Toss in the other general complications of figuring out custody, including custody now of a new infant.

    Option 2.
    Forego the $1400.


    Does anyone see any other options?

    --
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  • From Tempuser@21:1/5 to honda....@gmail.com on Tue Mar 8 18:33:48 2022
    On 3/8/22 2:25 PM, honda....@gmail.com wrote:
    Parent Liz and Parent Raymond share custody of three-year-old Child X. Per a court order, Parent Liz takes Child X as a dependent et cetera in 2020.

    Parent Liz receives $2800 total in March of 2021. This represents the third round of stimulus payments. The $2800 reflects the reality of Parent Liz having taken Child X as a dependent in 2020.

    The Parents proceed to have another child ("Infant Y") in June of 2021.

    Per the court order, Parent Raymond takes Child X as a dependent et cetera in 2021. Parent Raymond filed his taxes a month ago, taking Child X as a dependent and reporting that his household received all of the third round stimulus payments that were
    owed.

    Parent Liz just started yesterday doing her taxes with help from the local VITA site. Parent Liz plans to take Infant Y as a dependent for 2021. During the VITA interview, Parent Liz reports that she already received $2800 for the third round of
    stimulus payments, for her and Child X. Per the Taxslayer software, she is owed no more.

    Now: $1400 is out there, to be claimed somehow, on account of Infant Y entering the world in mid-2021, but clashing with IRS rules for filing one's taxes and/or software limitations.

    Options as I see them:

    Option 1.
    Parent Liz goes ahead and files now, taking Infant Y as her sole dependent et cetera. Parent Raymond subsequently amends and removes Child X as a dependent. Once Parent Raymond's amendment is complete, then Parent Liz could amend, adding Child X as a
    dependent.

    The drawback of this plan is that, first, the IRS is incredibly backed up when it comes to processing amended returns. We may very well be looking at a few years before the dust settles and the IRS processes Parent Raymond's amended return. Second,
    then the IRS may take another few years to process Parent Liz's amended return. Toss in the other general complications of figuring out custody, including custody now of a new infant.

    Option 2.
    Forego the $1400.


    Does anyone see any other options?

    Asked and answered as IRS 2021 RRC FAQ # 17 at: https://www.irs.gov/newsroom/2021-recovery-rebate-credit-topic-e-calculating-the-2021-recovery-rebate-credit

    --
    Alan

    --
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    << The foregoing was not intended or written to be used, >>
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    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
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  • From honda.lioness@gmail.com@21:1/5 to Alan on Tue Mar 8 20:07:52 2022
    On Tuesday, March 8, 2022 at 5:38:31 PM UTC-6, Alan wrote:
    IRS 2021 RRC FAQ # 17 at: https://www.irs.gov/newsroom/2021-recovery-rebate-credit-topic-e-calculating-the-2021-recovery-rebate-credit

    Thx. Then the way I see it for this scenario, Parent Raymond made a tax mistake on his 2021 return. Parent Raymond should amend his 2021 tax return, stating in the amended return that he received, during tax year 2021, only $1400 for his household for
    the third round of stimulus payments (which is true). For the amended return, the software then credits Parent Raymond $1400 for Raymond's 2021 dependent, Child X.

    Parent Liz need do nothing but file single with one dependent (Infant Y) and state she already received the $2800 for the third round of stimulus payments.

    If anyone sees this any other way, please chime in.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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  • From Tempuser@21:1/5 to honda....@gmail.com on Wed Mar 9 16:35:10 2022
    On 3/8/22 5:07 PM, honda....@gmail.com wrote:
    On Tuesday, March 8, 2022 at 5:38:31 PM UTC-6, Alan wrote:
    IRS 2021 RRC FAQ # 17 at:
    https://www.irs.gov/newsroom/2021-recovery-rebate-credit-topic-e-calculating-the-2021-recovery-rebate-credit

    Thx. Then the way I see it for this scenario, Parent Raymond made a tax mistake on his 2021 return. Parent Raymond should amend his 2021 tax return, stating in the amended return that he received, during tax year 2021, only $1400 for his household for
    the third round of stimulus payments (which is true). For the amended return, the software then credits Parent Raymond $1400 for Raymond's 2021 dependent, Child X.

    Parent Liz need do nothing but file single with one dependent (Infant Y) and state she already received the $2800 for the third round of stimulus payments.

    If anyone sees this any other way, please chime in.


    The problem is the misinterpretation of the law. The taxpayer does not
    report the EIP3 received by the household. The taxpayer on the 2021 tax
    return reports the EIP3 received by the taxpayer. The taxpayer in this instance, Raymond, only received $1400. Therefore, he needs to amend
    his 2021 tax return in order to generate a $1400 RRC.
    --
    Alan

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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