3rd Stimulus Dependent Eligibility Changed in 2020

[qz2s4m00]

I am not claiming my son as a dependent in 2020 as he is over 19 years and not a Full Time student. Though he was claimed as a dependent in2019. I had not filed my taxes before the 3rd Stimulus payment deposited $1,400 for having a dependent based on my filing in 2019.

I am assuming I will need to contact the IRS for repayment of the $1,400 as he was not a dependent for 2020.

[JoannaB2]

If you already received the 3rd round of stimulus payment, that's ok. The stimulus payments (1st - 3rd)  are non-taxable and none of the three stimulus checks won’t reduce your refund or increase what you owe when you file your taxes this year or next.

Under the American Rescure Plan Act signed in 3/11/2021, a family with household income of $150,000 or less will receive a stimulus payment of $1,400 per taxpayer and qualified dependents including dependent over 17 years old.

[qz2s4m00]

Though my son was a dependent in 2019 he was not in 2020. Wouldn't the eligibility for receiving the 3rd round be based on status for 2020?

If so, that why it seems the $1,400 is an over payment that the IRS will want corrected.

[JoannaB2]

Yes, the stimulus payment is calculated based on the number of dependents under 17 plus the taxpayer/s. Your son needs to file 2020 income tax return to receive the stimulus payment.  If you received overpayment,none of the stimulus checks are taxable and won't impact your income tax filed this year.

Under the American Rescue Plan Act of 2021 signed in 3/11/2021, a family with household income of $150,000 or less will receive a stimulus of $1,400 per taxpayer and dependents including qualified dependents over 17 years old. 

[shakeyknees]

Sorry, your replies don't seem to be hitting the target on what is being asked. Could you answer the question specifically, I am looking for the exact same information.

Do we have to return the $1400 ?    

We received a 3rd round stimulus payment for a dependent based on the information on our 2019 return because we had not yet filed our 2020 return.  Now that we are filing our 2020 return, we are not claiming this person as dependent for 2020. Would we owe that $1400.00 payment back to the goverment?

In kind, I had heard that if you have higher income in 2020 which puts you out of the stimulus payment in full or partial you do not owe that money back if it was based on your 2019 return and you received the payment before you filed your 2020 return.

Thanks so much

[CatinaT1]

No.  There is no provision for returning the stimulus.

[NCperson]

@shakeyknees - agreed no need to return the stimulus.   The way Congress passed the law is that if you receive stimulus, it is yours to keep and no need to return it. 

The situation you describe was anticipated by Congress and they specifically stated nothing would be required to be returned. 

Similarly, if you look very, very, closely at Line 30 of the 2020 tax return, the result can not be negative, which is another way of stating that if you received stimulus based on your 2019 income and now your 2020 tax return shows a higher number, you are not going to be asked to return any of the money. 

What is on Line 30 of your 2020 tax return; it won't be negative and I suspect it will be zero they way you described your situation.

[AmeliesUncle]

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@shakeyknees wrote:

Do we have to return the $1400 ?    

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We don't know at this point.

For the third stimulus, the law specifically told the IRS to create some rules to try to avoid the double-payment like that (that does NOT apply to the first two stimulus payments).  So far, the IRS has not issued any guidance in that matter.

[NCperson]

@AmeliesUncle - that is interesting. 

Can you document any news articles or where in the law itself that is stated?  

otherwise, it's just a rumor unsupported by fact 

[AmeliesUncle]

The 2021 Recovery Rebate (third stimulus) is in Section 9601 (Subtitle G) of the new law (American Rescue Act?) and creates Tax Code section 6428B.  It start on page 342 of the PDF I am using (628 total pages of the PDF).  Sorry, I don't have a link handy (and this forum messes up most of my links anyways).

Subsection (h) says:

‘‘(h) REGULATIONS.—The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including— ‘‘(1) regulations or other guidance providing taxpayers the opportunity to provide the Secretary information sufficient to allow the Secretary to make payments to such taxpayers under subsection (g) (including the determination of the amount of such payment) if such information is not otherwise available to the Secretary, and ‘‘(2) regulations or other guidance to ensure to the maximum extent administratively practicable that, in determining the amount of any credit under subsection (a) and any credit or refund under subsection (g), an individual is not taken into account more than once, including by different taxpayers and including by reason of a change in joint return status or dependent status between the taxable year for which an advance refund amount is determined and the taxable year for which a credit under subsection (a) is determined.

[Hal_Al]

@qz2s4m00  @shakeyknees 

I'm in the same boat.  My son was my dependent in 2019, but not 2020. We did not file our 2020 returns, until April 2021. I turned over the $1400 to my son; taking the attitude, we'll deal with it if and when the IRS sends him a duplicate $1400.  I suspect the IRS computers are sophisticated enough to prevent duplicate payments from being sent out.  

I think it's a mistake for us  to try to sent it back, at this point. You may never see it again! "A bird in hand....."

UPDATE: I was wrong,  the IRS computers are NOT sophisticated enough to prevent duplicate payments from being sent out.  My son received a direct deposit  of the $1400, two weeks after filing his tax return and one week after receiving his refund

[AmeliesUncle]

Hypothetically, it shouldn't be a problem.  The way I read things, it says they will try to avoid the double-payment BETWEEN the Advance payment (now) and on the 2021 tax return (almost a year from now).  It doesn't really address the double-Advance payment, so hypothetically that would fall under the no-repayment rule.  But it is difficult to know how the IRS will interpret things and the guidance they will give.

From what I have heard, the IRS is giving out double-Advance payments so far.  But it is difficult to know what the IRS will do in the future.

[NCperson]

@AmeliesUncle - can you please post sources of articles you are reading or actual laws.  Otherwise, all you are doing is spreading rumors.  where are you reading "these things".  Is the source vcredible? Reddit, for example, is not a credible source.

Frankly, I have read absolutely NOTHING saying that 2021 (third payment) will be any different than 2020 (1st two payments).  For example, a child who is claimed in alternate years by divorced parents can yield $1400 for EACH parent - as a $1400 stimulus payment now and as a Recovery Credit on the 2021 tax return.  That is how the law works.

[AmeliesUncle]

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@NCperson wrote:

@AmeliesUncle - can you please post sources of articles you are reading or actual laws.  Otherwise, all you are doing is spreading rumors.  where are you reading "these things".  Is the source vcredible? Reddit, for example, is not a credible source.

Frankly, I have read absolutely NOTHING saying that 2021 (third payment) will be any different than 2020 (1st two payments).  For example, a child who is claimed in alternate years by divorced parents can yield $1400 for EACH parent - as a $1400 stimulus payment now and as a Recovery Credit on the 2021 tax return.  That is how the law works.

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Did you not see my post above?  I gave you extensive details about it.

[NCperson]

@AmeliesUncle - Yes, I read it.  I see no evidence of links to articles you have read from credible sources or links to the law itself that supports your point of view.   

My point is that without that evidence, your whole post is theoretical and your opinion only.