A lot of confusion relating to stimulus checks — and how to claim a tax credit for any money still owed — is triggering trouble, extra letters and delays as people file their 2020 tax returns.
The Internal Revenue Service is correcting plenty of mistakes that are being made after people plug in the wrong number for the Recovery Rebate Credit on their federal income tax returns.
"Anytime there is something new on the tax return it usually has an elevated error rate," said Mark Luscombe, principal analyst for Wolters Kluwer Tax & Accounting.
"So," Luscombe said, "the IRS may have a greater volume of erroneous tax returns than normal, and refunds are generally slowed when the IRS detects such errors."
Luscombe said the extra errors are probably creating some processing problems.
Why am I getting a letter from the IRS?
The IRS has already begun mailing letters to some taxpayers who claimed the 2020 Recovery Rebate Credit and may be getting a different amount than they expected.
"If a correction is needed, there may be a slight delay in processing the return and the IRS will send the taxpayer a letter or notice explaining any change," the IRS stated.
The IRS will calculate the correct amount, if mistakes relating to the first and second stimulus payments are found on Line 30 of the 1040 or 1040-SR.
Once the correct amount is calculated, the IRS will make the correction and continue processing the return.