Stimulus check refund: Will the IRS claim back your economic impact payments?

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Many families and individuals who received a stimulus check under the US bailout have speculated that part of the amount will be returned to the IRS. The federal government has sanctioned three stimulus checks since the pandemic began 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 initially based on 2019 tax returns and then 2020 returns. But families and individuals who filed their 2020 tax returns and claimed the recovery rebate credit could face some issues.

About 9 million error notices were sent by the IRS between January and July. Of these, 7.4 million were related to check payments. The instructions for the 1040 returns for 2020 have been notified of the stimulus payment they received from the IRS. But they were reassured that they would not have to refund any part of the total amount under any circumstances.

Stimulus check: IRS math error notice confuses people

The IRS’ error letter to people who received the third stimulus check left them perplexed.

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Due to the slippage, the agency will have to make adjustments to the amount owed to eligible persons or may have to reduce the amount of funds to be paid. The IRS is facing issues regarding the settlement of stimulus check payments. They did not make any calculations or explain the analysis.

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

For example, some people who lost their spouse filed a joint application in 2019 and received an additional stimulus check. But their filing was in accordance with the law. These families received double payments on 1st round of payments.

The IRS’ position on refunds remains unclear. But the agency said people who owed money could also be forced to pay a penalty on the money owed.

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