The 3rd stimulus payment turns out to be very generous in its treatment. You correctly received the funds in early 2021 based on your 2020 tax return and should report you did on your 2021 tax return. Your children should each correctly claim that they did not receive the stimulus payment and will correctly receive the Recovery Rebate Credit on their 2021 tax returns. You will not be penalized for receiving the funds by having to pay back any amounts for them.
@dasman66
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