July 2021, I received a EIP2 card. February 2022, the IRS said I shouldn't have gotten it and I need to pay it back with interest. How do I report that?

[summertime]

In March 2021 IRS sent letter 1444-B saying I got an EIP2 payment.  When I called them they said disregard the letter, it was applied to my 2020 federal tax amount owed.  Then, in July 2021 I received an EIP2 payment card.  But in Feb this year they wrote me saying I shouldn't have gotten it and I had to pay it back with interest.  How do I report that?  Do I report that I received the EIP or not on my taxes?

[Cynthiad66]

Yes.  Report that you received it.  You will have to report paying it back when you pay it back.  So if you return the payment in 2022, that will be accounted for on your 2022 return.

If IRS has actually determined that you are not entitled it could possibly reduce your refund by the amount that you receive.  So input your information as received.