How to use the recovery rebate credit worksheet TY2020

The Recovery Rebate Credit is authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
More details about the Recovery Rebate Credit are available here at IRS.gov.

Any eligible individual who did not receive any and/or the full amount of the recovery rebate (aka stimulus or
economic impact payment) as an advance payment, can claim the Recovery Rebate Credit on a 2020 Form
1040 or Form 1040-SR. Generally, this credit will increase the amount of the taxpayer’s TY2020 refund or
lower the amount of the tax they owe (any EIP over-payments do not impact the refund calculation and do not
have to be paid back). These forms can also be used by people who are not normally required to file tax
returns but are eligible for the credit.

• The second payment is considered a 2020 event and is incorporated into the Recovery Rebate Credit
on the TY2020 federal return. This is true even though some payments will not be received by
taxpayers until early 2021.

Important Tax Program Note: While IRS states taxpayers “do not need to complete any information about the
Recovery Rebate Credit on your 2020 Form 1040 or 1040-SR if you received all your recovery rebate in 2020”,
the tax program will return an informational Verification Warning Message if you do not complete the
Recovery Rebate Credit Worksheet on the tax return.

Note: This message is simply an informational warning and does not prevent the e-Filing of the tax return.

This helpful guide provides easy instructions for how to complete the Recovery Rebate Credit Worksheet, including how to enable or disable the displaying of Verification Warning Messages if you choose that option.

Option 1 (Recommended): Complete the Recovery Rebate Credit Worksheet

To satisfy the Verification Warning Message, complete the Recovery Rebate Credit worksheet as follows:

1. Enter the amount of payment(s) received, including any off-set amount that was withheld from the payment(s) by the Treasury Department (off-sets were limited to child support).
   • Note: If taxpayers are uncertain of the amount they received, they should locate and refer to Notice 1444 (Payment 1) and Notice 1444-B (Payment 2) the IRS sent to all taxpayers who received payments.
2. If no payment(s) were received, mark the applicable check box in each column.

If the taxpayer is eligible for an Economic Impact Payment (or an additional payment), the amount will appear on Line 30 of Form 1040 (or Line 30 of Form 1040-SR).

Option 2: Do Not Complete the Worksheet and Bypass the Verification Warning Message

If you choose to not complete the Recovery Rebate Credit Worksheet and need to bypass the Verification Warning Message (Example: Taxpayer does not have IRS Letter 1044 and does not remember the amount of their payment received), follow the steps below:

1. Click the Queue button in the toolbar.
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2. Click the Next button to bypass the informational Verification Warning Message
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3.  Proceed with return processing as normal

Optional: Steps to Disable / Enable Verification Warning Messages

If you do not receive this Verification Warning Message and/or prefer to not receive the messages, follow these steps:

1. Click the Setup Menu located on the Work in Progress (WIP) Screen.
2. Click > Office Setup > Applications Settings > Registration tab.
   • 
3.  To enable and/or disable the display of informational Verification Warning Messages, mark, or un-mark the “Display Warning-type Errors” checkbox.

For more information on Economic Impact Payments along with answers to an extensive list of FAQs, please go to: IRS.gov/Coronavirus and Economic Impact Payment FAQs.

If you have additional questions about the instructions contained in this Here’s How To guide, please contact our Partner Support Team at 206-209-2653. You can also email us at help@erosupport.com.