Stimulus Check Problem: What If the Government Overpays You?

Stimulus

Stimulus Check Problem: What If the Government Overpays You?

If you already did receive your stimulus check and the amount seemed too much—which could potentially occur if divorced parents both receive payments for the same dependents—the IRS says that you will likely not have to pay the money back.

 

It appears that the Internal Revenue Service is making great headway in providing much-needed cash to millions of financially struggling Americans.

As of Thursday, the agency has confirmed that one hundred twenty-seven million coronavirus relief checks—totaling roughly $750 billion—already have been sent out under President Joe Biden’s American Rescue Plan.

 

However, in the rush to get the stimulus money quickly out to those most affected by the ongoing pandemic, there are bound to be inaccuracies in the check amount—sometimes being too generous.

If you already did receive your stimulus check and the amount seemed too much—which could potentially occur if divorced parents both receive payments for the same dependents—the IRS says that you will likely not have to pay the money back.

Per the agency’s guidance, there is “no provision in the law that would require individuals who qualify for a payment based on their 2018 or 2019 tax returns, to pay back all or part of the payment, if based on the information reported on their 2020 tax returns, they no longer qualify for that amount.”

There is, however, nothing stopping you from choosing to write “void” in the endorsement section on the back of the check and then mailing it to an appropriate IRS location. If you decide on this route, just write a brief explanation stating the reason for returning the check. Then you would have to contact the agency to see if you can receive a new check with the correct amount.

As for taxpayers eligible for stimulus payments who have recently died but were still sent checks, the IRS says that spouses or relatives should return the funds to the agency.

If you have yet to receive your check, take note that fewer Americans will receive stimulus payments this time around, so make sure to confirm if you even qualify. Individuals who earn as much as $75,000 in adjusted gross income (AGI), or couples making $150,000—in addition to their children or adult dependents—qualify for the full $1,400 per individual.

Single parents with at least one dependent who earn $112,500 or less also get the full amount. Families in which some members have different citizenship and immigration classifications are eligible for a payment, if at least one person has a Social Security number. The payments, however, phase out much more quickly than in previous rounds—an individual with an income of $80,000, or a couple with $160,000, will receive nothing.

If you are indeed eligible to receive a stimulus check based on your AGI, then you should also make sure how much you and your family can expect. According to the details of the American Rescue Plan, the maximum payout all depends on how many dependents you have.

Let’s say you qualify for the maximum amount based on your AGI, and that you’re a family of two adult joint filers with one dependent. In this scenario, you would be eligible to receive a total of $4,200. With two dependents, the check would rise to $5,600, with three dependents $7,000, and so on.

 

Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.