How to Claim Missing Stimulus – Can IRS Garnish Stimulus?

How to Claim Missing Stimulus Money
Can the IRS Garnish My Stimulus?

Recovery Rebate Credit

Non-filers were qualified for the stimulus tax credit, but did not receive it because they did not file a 2018 or 2019 tax return.  Non-filers include RetireesSSDI or SSI recipients and those with incomes less than $12,200. IRS advised Non-filers to file a claim using the Non-Filers tool by Nov. 21, 2020.  The IRS said  If you missed the deadline you can still claim the payment through the Recovery Rebate Credit when you file a 2020 federal income tax return: 

When you file a 2020 Form 1040 or 1040SR you may be eligible for the Recovery Rebate Credit. Save your IRS letter — Notice 1444 Your Economic Impact Payment — with your 2020 tax records. You’ll need the amount of the payment in the letter when you file in 2021.

That means even if you don’t usually file taxes, you will have to do so this year to claim any missing stimulus money. If you meet the requirements, you can get started with your claim using the IRS’ free tax-filing service. We have more detailed instructions for how nonfilers can file a tax return to claim missing stimulus money here.

Can IRS Garnish Your Missing Stimulus or
Recovery Refund Credit?

Unfortunately, it can. Stimulus checks are technically considered a tax credit. While IRS normally reduces a taxpayer’s refund to repay outstanding debts like past-due child support, unpaid student loans and certain other federal and state liabilities, the CARES Act stated that stimulus checks could not be garnished for these purposes, except for overdue child support.

The December stimulus package went a step further and protected the second round of stimulus checks from all garnishment, including for child support.  However, it also limited that exception only to advance payments.  Payments that you would have already received.  The  Recovery Rebate Credit falls outside of that category. Bottom line: If you’re eligible for a stimulus payment through the Recovery Rebate Credit, some or all of your credit refund could be withheld to pay debts such as unpaid student loans and other Federal and States debts. 

Although the IRS has told taxpayers that they can claim their full missing stimulus payment on their 2020 returns, this is inaccurate based on the law change.  IRS said it “has been looking into this issue and is exploring ways to exercise its discretion to help vulnerable taxpayers, taking into account the limitations of its IT systems, resource issues, and a rapidly approaching start to the filing season.” Stay Tuned…

What If My Check Was Mistakenly Garnished?

IRS could garnish your first stimulus check for overdue child support. However, if the parents are separated or divorced, only the spouse who owes child support should have their check seized. Your second check can’t be seized for overdue support if it was sent as an advance check (see above).

According to the IRS, the parent who doesn’t owe child support should receive their portion of the first payment without having to take action. If you haven’t received your check, the IRS says it’s working to send out the missing payments.

While you don’t have much recourse to appeal IRS decisions, you can also click her to try the Non-Filers tool to create a record of your claim.

How To Claim Missing Stimulus For Child Dependents 

Under the CARES Act passed in March 2020, each qualifying child dependent — those 16 years old and younger — were eligible for a $500 check. But some people’s payments were short $500. for each eligible dependent. If claimed it by Nov. 21 of 2020, you should have received the payment in December 2020.  If you the missed the deadline, the IRS says you can claim the payment on your 2020 federal tax return this year, by filing a 2020 Form 1040 or 1040-SR. Use IRS’s stimulus check calculator to get an idea of how much you may be owed.

In the second stimulus check, which went out in December, children under 17 were each allotted $600 as part of the family total. If  parents are separated or divorced and share joint custody of a dependent, each parent can get a $500 or $600 payment per eligible child, for the first and second checks, respectively. 

What To Know If You’re a US Citizen Abroad Or A Non-Citizen

The IRS has rules that set the payment eligibility guidelines for US citizens who live abroad and non-US citizens who work in the US along with spouses of nonresident aliens. IRS has a guide that walks you through the various eligibility scenarios along with what to do if you qualify but didn’t get a check. (And here’s how your status might change in a third check for mixed-status families.)   

People In Jail Can Still Receive A Stimulus Payment

Since April, the IRS has gone back and forth on whether those who are in US jails and prisons qualify for a stimulus check.  A ruling last fall by a federal judge in California, seems to have settled the question for now and required the IRS to contact those incarcerated and let them know they can file a claim for a stimulus check. The deadline to file a claim in 2020 either through the mail or onlinehas passed. As with others who are missing a payment, the IRS said if you didn’t receive a payment by Dec. 31, 2020, you may be able to claim it this year by filing a 2020 Form 1040 or 1040-SR.