Is this an overpayment by chance?

2019 my parents claimed me as a dependent (2019) which means I did not receive the first two stimulus checks. I am aware that the 3rd was to be included with my parents lump some but when I asked them for my share they said “they didn’t get it” and only got $2800. When I filed for my 2020 taxes, I clicked that I did not receive my $1400 in which it automatically generated in my tax return. I have received the payment of $1335.02. Yesterday, I received a paper check of $1400 from the US treasury. I’ve contacted the IRS and the US treasury but have no been able to get ahold of a representative. Could this possibly be an over payment? Is it okay to send this back if it Is? Thank you!

5 Answers

  • 1.  Any payment to your parents was to them, not you.  It was based on prior year returns and if too much, they won’t have to repay anything.  Note, for the early EIP checks, dependents aged 14 or older didn’t generate any additional money.  Ev en if it had, it wasn’t your money, it was your parents.

    2.  The IRS computer is good at keeping track of these things.

    3.  I’m more concerned about what event made you stop being a dependent?

    Are you 24 or older and had income of more than $4300?

    Are you 19 or older, had income of more than $4300 and were *not* in school?

    I fear many parents aren’t claiming dependents they are entitled to because they think their children are missing out on free money.  If the parent *can* claim them, the child is NOT eligible.

  • I think you’re mixing up a couple things here. There have been 3 stimulus payments which are officially called “Economic Impact Payments” (EIP)

    In all 3 cases the payments are structured as a one-time tax credit but the IRS would use the previous 2 years to send out an advance payment before tax season. Then there’s an opportunity on your tax return where people can claim any stimulus money they didn’t get during the advance payment for one reason or another.

    EIP#1 was $1200 per adult plus $500 per child under 17 against 2020 taxes. Dependents 17 & older did not generate money for their parents and did not get a stimulus of their own.

    EIP#2 was $600 per adult and $600 per child under 17 against 2020 taxes. Again dependents 17 & up did not qualify.

    EIP#3 was $1400 per adult and $1400 per dependent regardless of age against 2021 taxes. this time ALL dependents generated an extra $1400 for their parents (or whoever claimed them).

    When your tax software asked you about stimulus payments it was asking about EIP1 and EIP2. You didn’t get either of those, so you would qualify for the recovery rebate credit (RRC) for $1800 (covers the $1200 and $600 payments). This is just added to your 2020 tax refund. So you won’t get a separate payment, your refund is just $1800 larger than it would have been without any stimulus packages.

    EIP#3 is for 2021 taxes, so it would not have been on any forms or software for your 2020 return. That $1400 check you received was because the IRS just processed your 2020 return, realized you’re now independent, and sent you the advanced payment for this stimulus. You’re free to cash that check and spend it however you choose, but you will NOT get another $1400 when you file your 2021 taxes next year because you’ve already received the full amount.

    Also, it sounds like your parents are telling the truth. $2800 would have been the correct amount for a married couple with no dependents for the 3rd round.

  • It’s all fine.

    Your parents correctly got it based on their 2019 tax return.

    You got it based on your 2020 tax return.

    YES, it’s an overpayment BUT the IRS is not collecting these overpayments.

    You all get to keep the money, do good things with it.

  • Under the Trump administration, any overpayment were considered to be a mistake by the government and you were allowed to keep it.  

    There has been no decision yet on how the Biden administration is going to handle overpayments like that.

  • The third stimulus ($1400) could not have been claimed on your 2020 tax return. It is an advance payment on a 2021 tax credit.  Only the first two could have been claimed on a 2020 tax return.  It is not a mistake.

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