Here's What You Need to Remember: College students fall into a strange grey zone, in which it's not immediately clear whether they qualify for full stimulus or not.
But also know that sometimes, the Internal Revenue Service has mistakenly sent out stimulus funds to those who don’t deserve them.
Case in point: One college student, still considered a dependent, somehow received three stimulus payments to date. Apparently, he has already deposited those checks but has not spent a dime of them. What should he or the parents do?
According to MarketWatch’s personal finance editor, since the college student is an adult dependent over sixteen, “he did not qualify for the first two stimulus checks.” But under President Joe Biden’s American Rescue Plan, “dependent students may receive the full stimulus.”
The details of the $1.9 trillion legislation state that those who earn as much as $75,000 in adjusted gross income, or couples making $150,000, qualify for the full $1,400 per individual—and this also applies to college students who are dependents.
However, an individual with an income of $80,000, or a couple with $160,000, will not be getting any stimulus check this time around.
Keep in mind that for the first round of stimulus funds disbursed last year, parents of dependents were eligible for $500 payments, while the second round featured $600 checks.
The personal finance guru added: “It bears repeating: The $1,400 stimulus check is not a loan. This third stimulus check is an advance tax credit on your 2021 taxes and calculated based on your 2020 taxes. You could wait to see what the IRS does, of course, but that leaves another question: Should he pay it back? Yes.”
To return the funds, they should write “void” in the endorsement section on the back of the check and then mail it to a local IRS location. If one decides on this route, they should also take time to write a brief explanation stating the reason for returning the stimulus payment.
However, if the check was already deposited into a bank account—much like the college student’s case—then one can mail a personal check or money order to an appropriate IRS location.
Just make the check payable to “U.S. Treasury” and write “Third EIP” and personal taxpayer identification number—social security number or individual taxpayer identification number—on the check.
Be aware that according to the law office of Stechschulte Nell, one should always think twice before cashing a stimulus check that’s not rightfully theirs, as the act could carry hefty fines and long prison sentences.
“There are serious consequences for committing check fraud. This can include a fine of up to $1 million, or you can be imprisoned for up to thirty years (or both). If you have been charged with depositing a dead or fraudulent COVID-19 stimulus check, this may be one of the charges you are faced with,” the law firm wrote.
This first appeared earlier and is being reposted due to reader interest.
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.