The Internal Revenue Service continues to see a large number of tax returns with errors in claiming the Recovery Rebate Credit and is hearing from taxpayers who are confused by the way the credit is calculated by some tax software.

“The critical thing is for filers to enter the correct amount of stimulus payment they received last year – don’t guess,” said IRS spokesman Mike Dobzinski. “Then trust the tax software to correctly calculate the credit.”

Filers who don’t remember how much economic stimulus payment they received in 2008 can easily get the amount by using the online tool, “How Much Was My Stimulus Payment?” at www.irs.gov or by calling the IRS Stimulus Hotline toll-free at 1-866-234-2942.

Those inquiring will need to provide the primary Social Security number from their 2007 tax return, along with their filing status and number of exemptions claimed.

“Also, don’t be confused if your tax software program appears to decrease your refund when you input your stimulus payment amount,”Dobzinski said.

He said that some software automatically gives the filer the Recovery Rebate Credit early in the tax preparation process then subtracts it when the filer inputs their stimulus payment. This indicates the filer is not eligible for the credit, but some incorrectly assume it means the stimulus payment is taxable or is reducing their refund of taxes withheld.

Those filing paper returns should use the correct amount of stimulus payment when completing the Recovery Rebate Credit worksheet.

They also have the option of requesting that the IRS calculate the credit for them by writing “RRC” on the Recovery Rebate Credit line of their tax return, he said.

Most taxpayers who received stimulus payments last year are not eligible for the Recovery Rebate Credit. Exceptions include taxpayers who had a qualifying child born in 2008 or who ceased being a dependent.

Also filers whose 2007 income level prevented them from getting a stimulus payment but whose income changed for 2008 may qualify for the credit. Others who simply did not file to claim a stimulus payment last year may also be eligible to file a 2008 tax return and claim this credit.

Dobzinski reminded filers that the Recovery Rebate Credit is included in their regular 2008 tax refund, not issued as a separate payment. Also, it is not part of the 2009 stimulus legislation signed into law recently.

More information about the Recovery Rebate Credit is available at IRS.gov. Michael Dobzinski is an Internal Revenue specialist in Area 2 in Plantation, Fla.