- If Your E-filed Return Was Rejected with "Recovery Rebate Credit" Message
If Your E-filed Return Was Rejected with "Recovery Rebate Credit" Message
Why am I getting this rejection message?
Most likely you gave an incorrect number (or overlooked the question) when asked to provide the amount of the tax rebate you got last year.
The IRS requires you to enter the amount of your rebate, also known as a stimulus payment, when preparing your 2008 tax return. If the rebate amount you entered doesn't agree with the number the IRS has for you, your return could be rejected by the IRS. You might see:
- Error reject code 0269
- Form 1040/1040A/1040EZ - Recovery Rebate Credit cannot be claimed because the maximum amount has already been received based on the information contained on the 2007 tax return.
- A message that tells you how to solve the problem and that begins,"You received the Recovery Rebate Credit payment last year. You need to . . . "
You should be able to resolve this quickly in the TurboTax program, by following the steps below.
Steps to e-file correctly
- Go back to the Personal Info section in TurboTax, and click on Done with Personal Info and proceed to You & Your Family. You should see a page that says Last Year's Stimulus Rebate.
- It will ask: "Did the IRS issue you a rebate last year?"
- You must enter the correct amount for which you qualified, if any, in 2008. Please don't guess. If you enter the wrong amount, your tax return could be rejected.
- IMPORTANT: Check with the IRS to verify the amount of your 2008 rebate, or stimulus payment. Click on How Much Was My 2008 Stimulus Payment? This takes you to a secure IRS site.
- Follow the instructions, by entering your Social Security number (if married filing jointly you can enter either spouse's number).
- Select the filing status you used last year.
- Enter the number of exemptions you claimed on your 2007 return. Generally you should have had one exemption each for you, for your spouse and for each dependent (or zero if you filed but claimed as a dependent on someone else's return).
- Once you verify the amount of your stimulus payment, enter it in TurboTax on the screen that asks, "Did the IRS issue you a rebate last year?"
- Then go to the Print & File tab in TurboTax and follow the on-screen instructions to file your return again.
Does your refund monitor change?
After you enter the correct amount of the rebate you received in 2008, you could see the amount of your refund go down, or the amount of your taxes owed go up.
We understand that this can be alarming, and also make you think that your rebate is being taxed.
Your rebate is not being taxed.
We ask you about the rebate you got last year, in case you missed out and would qualify to get one (called a recovery rebate) this year.
If you don't enter the amount you got early in the program, TurboTax assumes you qualify for the recovery rebate and adds that money to the refund monitor. So when you later put in the correct amount you did receive (say $300, $600, or $1,200), TurboTax adjusts the amount in the refund monitor by that amount. The program is simply subtracting an amount that was added inadvertently or incorrectly.
Video Help
View this video for additional guidance in resolving this issue:
Why do I need to enter the rebate amount I got last year?
Some people who did not get a 2008 rebate, or stimulus payment, or got less than the full amount, could qualify for a payment this year, based on their 2008 tax returns. These payments are known as "recovery rebate credits."
That's one reason the IRS requires you to enter the rebate amount you received last year, as you prepare your 2008 tax return - in case you qualify for a recovery rebate.
The IRS is reminding taxpayers that the rebates will not be taxed and do not need to be repaid.
What if my rebate was reduced to pay back taxes or child support that I owed?
The IRS might have reduced or eliminated your rebate last year to pay your outstanding debts, such as:
- Back taxes,
- Child support or
- Student loan payments
If this happened to you, the IRS still requires you to enter the rebate amount for which you qualified (before it took money out).
Learn this amount by going to How Much Was My 2008 Stimulus Payment?
Then enter that amount - and not what you actually received.
What if my filing or marital status changed in 2008?
If you got married, got divorced, or otherwise changed your tax filing status in 2008 from 2007, you might need to take an extra step in determining what amount to enter for the stimulus payment you received last year.
Read this short IRS guide to Claiming the Recovery Rebate Credit If Your Filing Status Changed.
Will my rebate be taxed?
No.
Congress authorized the stimulus payments in February 2008 and wanted to send them out as quickly as possible, to help the economy.
It's a bit confusing, but the stimulus payments were actually advance tax credits on the 2008 tax returns that taxpayers are filing now in 2009.
What the IRS stated in 2008 is still true: The credit, or stimulus payment, is not taxed and doesn't need to be repaid.
If you received a payment, it was based on your 2007 tax return information. The payment wasn't part of your regular tax refund, but was sent instead as a separate payment by mail or direct deposit starting in the spring of 2008.
This year, if you qualify for a recovery rebate, it will either increase your tax refund or reduce the amount of taxes you owe.
For more information, read this IRS article: Questions and Answers about the Recovery Rebate Credit.
