Third stimulus check was given based on 2019 return but not eligible based on 2020 and 2021 income, does that need to be retuned? What does policy say?

[MaryK4]

No, there is no provision in the law that would require individuals who qualify for a Third Economic Impact Payment or an additional payment based on their 2020 or 2019 information, to pay back all or part of the payment if, based on the information reported on their 2021 tax returns, they would have qualified for a lesser amount.

[TG07]

Agree that IRS mentioned it clearly for 2021 income but if 2020 income was higher and not eligible and IRS used the 2019 information as 2020 was not filed by the time of check payment, then should I consider myself as not eligible and return the amount?

[VolvoGirl]

If you got the 3rd Stimulus payments based on your 2019 or 2020 return but are not eligible based on 2021 income you do not have to pay it back. See Question #3 here
https://www.irs.gov/newsroom/2021-recovery-rebate-credit-topic-c-eligibility-for-claiming-a-recovery...

[TG07]

ok I agree about 2021. but the scenario is this -

1. Eligible based on 2019

2. Not eligible based on 2020

3. Did not file 2020 tax return by March 20, 2021

4. IRS used 2019 and paid the stimulus

5. Filed 2020 return in Oct 2021

My question if return was filed before March 20,2021 and IRS would have used 2020 return to determine as not eligible, also not eligible as per 2021, so ideally not eligible, in this case do we need to return the payment similar to how IRS recommends other ineligible cases to return the stimulus

[VolvoGirl]

No.  You never have to return the stimulus?  Where did you see that?  

If you got the 3rd Stimulus payments based on your 2019 or 2020 return but are not eligible based on 2021 income you do not have to pay it back. See Question #3 here
https://www.irs.gov/newsroom/2021-recovery-rebate-credit-topic-c-eligibility-for-claiming-a-recovery...

[TG07]

I did not see any information on this specifically but saw news about IRS recommending individual to return the checks issued to ineligible (like check received for deceased, non-resident and other ineligible), just wanted to get advice on if this case is also considered as ineligible.

I understand the case where the individual is eligible based on 2019 and 2020 but not in 2021 need not return it, but my concern is if IRS thinks that the person is ideally not eligible (in 2020 and 2021) and made ineligible payment. Wanted to make sure if there are cases like this and what does the law/rule say.

[VolvoGirl]

Didn't  you see the link I've been posting?  

[LoganathanB]

No, if you qualified for a third payment based on your 2019 or 2020 tax return, the law does not require you to pay back all or part of the payment you received based on the information reported on your 2021 tax return.

You filed your tax return for 2020 within the time frame in October 2021.

[TG07]

I saw it (https://www.irs.gov/newsroom/2021-recovery-rebate-credit-topic-c-eligibility-for-claiming-a-recovery...) and this is what I understand

If the individual is determined as required support in 2020 or 2021 (during pandemic), then the individual is eligible for stimulus but the case I am talking about is not eligible in 2020 and 2021 and merely eligible because the latest they had was 2019 information. I think this case is not addressed in the link provided or the snapshot shared.