Regarding the third economic impact payment (3EIP) of $1,400 each here is an answer from the IRS website. Your daughter is eligible to enter on her return that she received nothing. And she is entitled to the $1,400 even though you received it for her last year. On your tax return you would enter what you actually received ($4,200).
- If you were claimed as a dependent on someone else’s tax return for 2020, you were not eligible for the third-round Economic Impact Payment. If no one can claim you as a dependent for 2021 and you are otherwise eligible, you can claim the 2021 Recovery Rebate Credit, and must file a 2021 tax return to claim the credit.
You are not required to pay back the credit you received for your daughter.
- No, there is no provision in the law that would require individuals who qualified for, and received, a third-round Economic Impact Payment (including a plus-up 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.
Reconcile both tax returns with the accurate information. She did not receive the third stimulus and is entitled to it. You received a payment for her because she was your dependent in 2020, and you do not have to pay it back.. It's a win-win!
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