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

[Bsch4477]

Stimulus does not have to be returned. 

[TG07]

As per IRS, No, if you qualified for a third payment based on your 2019 or 2020 tax return, the law doesn’t require you to pay back all or part of the payment you received based on the information reported on your 2021 tax return.

This speaks about ineligible based on 2021 income, but what if not eligible as per 2020 income also...
IRS said stimulus needs to be returned if ineligible person received it, so question is about the scenario of someone eligible solely because IRS had only 2019 info and 2020 was not yet filed and would be ineligible if 2020 was filed. Appreciate the inputs.

[Opus 17 · Accepted solution]

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@TG07 wrote:

As per IRS, No, if you qualified for a third payment based on your 2019 or 2020 tax return, the law doesn’t require you to pay back all or part of the payment you received based on the information reported on your 2021 tax return.

This speaks about ineligible based on 2021 income, but what if not eligible as per 2020 income also...
IRS said stimulus needs to be returned if ineligible person received it, so question is about the scenario of someone eligible solely because IRS had only 2019 info and 2020 was not yet filed and would be ineligible if 2020 was filed. Appreciate the inputs.

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At this point, the stimulus is ONLY a credit on your 2021 tax return.  The IRS was instructed to make estimated payments using whatever old information they had.  If you qualify for a larger credit than you received, you will get the different added to your refund.  If you qualify for less of a credit than you received (or even no credit), you do not have to repay it.

Note this is different from the advance child tax credit.  If you received an advance child tax credit and you qualify for less (because you claim fewer dependents or your income is too high) you do have to repay the excess child tax credit.  

[DianeW777]

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.

• IRS Topic H-Reconciling your 2021 Tax Return for the Third Economic Impact Payment (3EIP)
  • ​​​​​​​Look at the last question