TexTaxToo

I don't know the answer, but am curious about the type of visa she had. Was it J-1? (or H1-B or something else?)

If TP B filed 2019 with 2 children before EIP1 was calculated, they would qualify for $2200 based on 2019. Since TP A had not yet filed 2019, they apparently got half of the amount based on 2018, or $1950, as BP said. TP A can trace the payment they say they did not get: https://www.irs.gov/newsroom/questions-and-answers-about-the-first-economic-impact-payment-topic-f-payment-issued-but-lost-stolen-destroyed-or-not-received#qf3

The IRS has now updated their FAQs to say that taxpayers with ITINs can indeed receive EIP3 for any dependents with SSNs: https://www.irs.gov/newsroom/questions-and-answers-about-the-third-economic-impact-payment-topic-b-eligibility-and-calculation-of-the-third-payment The last question:

I don't have one to try, but I got an alert that this is now fixed and direct debit dates after 4/15 will work (as long as your software allows them).

I read that the money would run out in a couple weeks, so without further Congressional action, the extension doesn't mean much.

Yes, just like scholarship income. (Scholarship income has the advantage that it is treated as earned income for the purpose of determining a filing requirement - but once there is a filing requirement, it is unearned income for the kiddie tax. I believe the 1099-Q income would be unearned for all purposes.)

Office Depot sometimes has sales. I've also found 10-ream cases of "Pen&Gear", 92 bright, at Walmart for under $30. Quality seems okay, but who knows how long it will hold up.

Yes, as in the example I linked to: (Only the portion of the distribution representing earnings is taxable.)

It's not that new. You've been able to e-file with dependent IP PINs for quite a while. There is no place for the dependent pin on a paper return, so the other party could still paper file. I don't know if the IRS holds such paper returns or not.

One more thing - the 10% penalty doesn't apply in this case (for the portion of the expenses attributed to the AOTC)!!!

To answer your original question, yes, you can take the AOTC, reduce the amount of qualified expenses, and potentially pay the additional tax on the distribution, as described here: https://www.irs.gov/publications/p970#en_US_2020_publink1000178546 But as Randall said, it's best to try to find expenses that aren't qualified for the AOTC that are allowed for 529 plans to "use up" the distribution.

Anyone can get an IP PIN now. That will prevent e-filing with the dependent without the IP PIN.

US citizens living abroad are generally treated no differently than if living here. The same rules for filing status and most credits apply. https://www.irs.gov/individuals/international-taxpayers/taxpayers-living-abroad

I think the confusion is that the latest instructions only mention Schedule 1, lines 7 & 8. The instructions for the Social Security calculation do not directly involve those lines, but only mention lines on the 1040: It seems pretty clear that you should add back the $10,200 here, but the new instructions do not explicitly say that, so if you follow them literally, it doesn't get added back. Confusing!

The law says the $10,200 has to be added back to MAGI for the taxable Social Security calculation. The worksheet instructions do not clearly say that, but they have already been changed once.

I believe the IRS will just treat it as a math error (so no penalty) if they claim the RRC, but got the EIP. However, if they don't claim the RRC, they will have to amend the return to get it. So if you/they are unsure, and they don't mind waiting for the refund ("a slight delay"!!), might it not be best to claim it? https://www.irs.gov/newsroom/2020-recovery-rebate-credit-topic-g-correcting-issues-after-the-2020-tax-return-is-filed 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.

For EIP1 and EIP2 it is clear from reading the law that at least one parent (and the child) must have an SSN. (Actually, the CARES Act said that both parents on a joint return must have an SSN, but this was changed to one parent in December when EIP2 was passed.) The ARPA for the third stimulus has different language, and my reading is that all dependents with an SSN qualify even if no parent (taxpayer) has an SSN. And I saw a migrant advocacy group saying that. However, the IRS says they will only send EIP3 if at least one taxpayer has an SSN (same as EIP1 and EIP2): https://www.irs.gov/newsroom/updated-details-about-the-third-round-of-economic-impact-payments So I'm waiting to see how this plays out.

The IRS has not yet updated their schema to allow direct debit dates after 4/15. I understand they plan to do so, but until they do, it will reject.

The IRS has updated their instructions for unemployment exclusion. The items where MAGI must include the excluded unemployment are listed (officially now): https://www.irs.gov/forms-pubs/new-exclusion-of-up-to-10200-of-unemployment-compensation (Also, I've heard that efiles are being rejected if there was withholding on the 1099-G but the total unemployment was less than $10,200. IRS plans to fix it.)

I think you are referring to the changes in the just passed ARPA. They apply to 2021 only. The act makes 17-year-olds eligible for CTC and ACTC (and increases the amount, makes it all refundable, and other changes). The qualifying child rules for EIC did not change (there was no under-17 rule for EIC). The act does allow EIC for younger and older adults (below 25, above 65) who are not dependents and have no qualifying children. The phaseout limits and investment income limit increase for EIC, and you can continue to use 2019 EI in 2021.

A CP14 notice was received in December 2020 assessing a penalty for failure to pay sufficient estimated tax for 2019. Most income was received in December 2019, and estimated tax was paid before Jan. 15, 2020. The return included Form 2210 with the annualized income installment method, which shows no underpayment. In early January, a letter was sent to the IRS explaining this with a copy of Form 2210. Subsequently, CP501 and CP503 notices were received, and a followup letter was sent. There has been no response to either letter, which isn't surprising considering the backlog. Now a CP504 notice was received. What would you do?

I got a note from my bank that said they would make the full amount of EIP3 available for use/withdrawal even if the account is overdrawn. Is that common?

If they were truly a dependent, and they checked the box on the 1040, they should not need to file Form 8962: https://www.irs.gov/instructions/i8962#idm140230412085312

This worksheet was provided by the IRS for paper returns. If you are using software, you should wait:

The CARES act wasn't clear about what should happen when someone died, and our previous president said they shouldn't get anything, or should send it back. The law enacting EIP2 makes clear that only those who die before January 1, 2020 are ineligible, and the IRS has recently updated their FAQs to say that anyone who died in 2020 can claim both payments as RRC. See Q1 and Q5: https://www.irs.gov/newsroom/questions-and-answers-about-the-first-economic-impact-payment-topic-a-eligibility For EIP3, those who die before January 1, 2021 are ineligible.