2020 Stimulus claimed on 2020 tax filing applied to back taxes

[walkkjs]

A portion of my refund included the amount that I was due from the 2020 stimulus payment, however, the IRS sent me a letter stating the full amount of the refund (including the stimulus) has been applied to back taxes. Even though I thought that since I am on a repayment plan that is in good standing, the IRS would not take my refund to apply to past due taxes, but I guess I can understand this, but I certainly did not think they would take the stimulus amount and apply it towards back taxes, and I did not think they could do this. Please advise. Thank you. 

[xmasbaby0]

Sorry--but yes, they can take that recovery rebate credit for back taxes.   A credit can be applied to any tax owed including the back tax you owe, even when you are on a payment plan.   If you are eligible for the 3rd stimulus they will not take that.

[fanfare]

Just think, how much less you owe the IRS now!