TexTaxToo

ARPA only provided the exclusion "In the case of any taxable year beginning in 2020"

This is the website link to IR-2021-84:

https://www.irs.gov/newsroom/irs-suspends-requirement-to-repay-excess-advance-payments-of-the-2020-premium-tax-credit-those-claiming-net-premium-tax-credit-must-file-form-8962

This may help:  https://www.irs.gov/individuals/additional-itin-information

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Once you receive a SSN, you must use that number for tax purposes and discontinue using your ITIN.  It is improper to use both the ITIN and the SSN assigned to the same person to file tax returns.  It is your responsibility to notify the IRS so we can combine all of your tax records under one identification number.  If you do not notify the IRS when you are assigned a SSN, you may not receive credit for all wages paid and taxes withheld which could reduce the amount of any refund due.  You can visit a local IRS office or write a letter explaining that you have now been assigned a SSN and want your tax records combined.  Include your complete name, mailing address, and ITIN along with a copy of your social security card and a copy of the CP 565, Notice of ITIN Assignment, if available.  The IRS will void the ITIN and associate all prior tax information filed under the ITIN with the SSN.  Send your letter to: 

     Internal Revenue Service 
     Austin, TX 73301-0057 

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:

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I don’t have a valid SSN, but I have a qualified dependent that does. Will I get the third Economic Impact Payment for them? (added March 30, 2021)

You can still receive up to $1,400 for a qualified dependent claimed on your return, even if you do not have a valid SSN, but you must meet all of the other eligibility and income requirements.

For example, if you file as head of household and your adjusted gross income is over $120,000 you would not qualify for any payment for you or your qualified dependent. If your income was under $120,000, you are a U.S. resident alien and not a dependent on another taxpayers 2020 return, you will not receive a $1,400 for yourself, but you may still receive up to $1,400 for a dependent you claimed on your return, if they have a valid SSN and meet all of the qualified dependent requirements.

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:

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Sara's parents claimed an American opportunity credit of $2,500 (based on $4,000 expenses).

... (calculation of taxable amount)

Sara must include $735 in income (Schedule 1 (Form 1040), line 8). This represents distributed earnings not used for adjusted qualified education expenses.

 

(Only the portion of the distribution representing earnings is taxable.)

5 hours ago, Randall said:

 I think it might be new. 

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

26 minutes ago, Abby Normal said:

I already posted the latest from irs.gov that covers the Social Security calculation and others.

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:

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3. Combine the amounts from Form 1040 or 1040-SR, lines 1, 2b, 3b, 4b, 5b, 7, and 8 . . . . . . . . . . . 3.

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.

4 hours ago, Abby Normal said:

My policy is to assume they got the stimulus if their AGI was low enough and let the IRS sort it out.

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?