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Sunday, May 22, 2022

Stimulus Check Repayment: Will The IRS Claim Repayment On Your Economic Impact Payments

Many families and individuals who received a stimulus check under the American Rescue Plan have been left speculating about returning part of the amount to the IRS. The federal administration has sanctioned three stimulus checks since the start of the pandemic in 2020.

The first two stimulus checks were worth $1,200 and $600. The third stimulus check passed by the Biden administration was the $1,400 check under the American Rescue Act and officially called the Economic Impact Payment.

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The payment was based initially on the 2019 tax returns, and later on the 2020 returns. But families and individuals who filed their tax returns for 2020 and applied for the Recovery Rebate Credit could face some problems.

Around 9M error notices were sent by the IRS between January and July. Of these, 7.4M were linked to the check payments. Instructions regarding the 1040 returns for 2020 were notified of the stimulus payment they received by the IRS. But they have been reassured that they would not have to repay any part of the full amount under any circumstances.

Stimulus Check: Math Error Notice From IRS Confuses People

The error letter from the IRS to people who received the third stimulus check has left them confused.

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Due to the slip, the agency will have to make adjustments on the amount due to eligible people or have to potentially curtail the fund amount payable. The IRS is facing issues regarding the settlement of the stimulus check payments. They have not made calculations or given any explanation of the analysis.

These errors have resulted in people receiving checks even though they were not qualified to receive one.

For instance, some people who lost their spouses filed jointly in 2019 and received an extra stimulus check. But their filing was right under the law. Such families received double payments in the 1st round of payments.

It remains unclear of the position of the IRS regarding repayments. But the agency has stated that people who owed money might also be made to pay a penalty on the money owed.

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