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2020 Recovery Rebate Credit — Topic G: Correcting Issues After the 2020 Tax Return is Filed

2020 Recovery Rebate Credit — Topic G: Correcting Issues After the 2020 Tax Return is Filed

Note from the Editor: The IRS has recently updated their FAQs regarding the Recovery Rebate Credit. Following are some of the major issues; the full text of the FAQs can be found here.

Q G1. I'm eligible for a 2020 Recovery Rebate Credit but did not claim it on my 2020 tax return. Do I need to amend my 2020 tax return? (added March 1, 2021)

A1. If you didn't claim the credit on your original tax return, you will need to file an Amended U.S. Individual Income Tax Return, Form 1040-X. The IRS will not calculate the 2020 Recovery Rebate Credit for you if you did not enter any amount on your original tax return.

You can use the Interactive Tax Assistant, Should I File an Amended Return?, to help determine if you should amend your original tax return.

If you need to file an amended return to claim the Recovery Rebate Credit, use the worksheet on page 59 of the 2020 instructions for Form 1040 and 1040-SR to determine the amount of your credit. Enter the amount on the Refundable Credits section of the 1040-X and include "Recovery Rebate Credit" in the Explanation of Changes section.

If you filed your 2020 return electronically and need to file an amended return, you may be able to file Form 1040-X electronically.

If you did not file your 2020 return electronically, you will need to submit a paper version of the Form 1040-X and should follow the instructions for preparing and mailing the paper form.

Those filing their Form 1040-X electronically or on paper can use the Where's My Amended Return? online tool to check the status of their amended return.

DO NOT file an amended tax return if you entered an incorrect amount for the 2020 Recovery Rebate Credit on your tax return. If you entered an amount on line 30 but made a mistake in calculating the amount, the IRS will calculate the correct amount of the 2020 Recovery Rebate Credit, make the correction to your tax return and continue processing your return. If a correction is needed, there may be a slight delay in processing your return and the IRS will send you a notice explaining any change made.

To check the status of your refund from your original return, check Where's My Refund?

Q G2. I made a mistake when calculating the 2020 Recovery Rebate Credit on my return. How do I fix it? (added March 1, 2021)

A2. DO NOT file an amended tax return with the IRS. If you entered an amount on line 30 but made a mistake in calculating the amount, the IRS will calculate the correct amount of the Recovery Rebate Credit, make the correction to your tax return and continue processing your return. If a correction is needed, there may be a slight delay in processing your return and the IRS will send you a notice explaining any change made.

To check the status of your refund from your original return, check Where's My Refund?

If you did not enter an amount on line 30 of your Form 1040 or Form 1040-SR, see I'm eligible for a 2020 Recovery Rebate Credit but did not claim it on my 2020 tax return. Do I need to amend my 2020 tax return?

Q G3. I filed my 2020 return electronically, but made a mistake calculating my 2020 Recovery Rebate Credit. Will my return be rejected? (added March 1, 2021)

A3. No, the IRS will not reject your tax return if you made an error in calculating your 2020 Recovery Rebate Credit.

If you made a mistake on the line 30 amount, the IRS will calculate the correct amount of the Recovery Rebate Credit, make the correction to your tax return and continue processing your return. If a correction is needed, there may be a slight delay in processing your return and the IRS will send you a notice explaining any change made.

To check the status of your refund from your original return, check Where's My Refund?

Q G4. I received a letter saying that I did not calculate my 2020 Recovery Rebate Credit correctly. What if I disagree? (Added March 16, 2021)

A4. If you disagree with the IRS calculation, please review the FAQs below prior to contacting the IRS. The FAQs below provide additional information to explain what errors may have occurred and what information you should have available when contacting the IRS.

Q G5. I received a Notice CP10, CP11, CP12, CP13, CP16, CP23, CP24 or CP25 saying there was an issue with my Recovery Rebate Credit. What do I need to do? (Added March 16, 2021)

A5. If you received a notice saying the IRS changed the amount of your 2020 Recovery Rebate Credit, read the notice to see the reason provided. Review your 2020 tax return, the 2020 Recovery Rebate Credit requirements and the worksheet in the Form 1040 and Form 1040-SR instructions. Then review the FAQs below for the one that applies to the reason provided in your notice, for additional guidance.