I got the full amount for the third stimulus check. ($5,600 for a family of 4)
I just did my taxes for the 2020 year and an online calculator shows that I would have gotten $4,000 less if I had filed my taxes at in February.
Generally, the IRS is well known for collecting all the money it is owed.
So I want to know, am I going to have to pay that $4,000 back when I file my 2021 taxes? Or did my laziness really just net me $4,000?
The IRS has done a good job of creating a FAQ for each change in the tax law regarding these payments, they have even updated them as the situation has changed:
From the IRS: Questions and Answers about the Third Economic Impact Payments — Topic H: Reconciling on Your 2021 Tax Return
I received a Third Economic Impact Payment. Do I need to pay back all or some of the third payment if, based on the information reported on my 2021 tax return next year, I don't qualify for the amount that I already received? (added March 26, 2021)
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.
In other words if in April 2022 it was discovered that they overpaid you in the payment sent in March 2021, because they based it on your income from 2019, then you don't have to return it.
This happened to me with the first two payments. The first payment was based on my 2018 income because I hadn't filed yet. So they sent me a couple of hundred more than I would have gotten if I had filed my 2019 taxes when they calculated the amount. The 2nd check was based on the 2019 income, so I received a small check. But when I filed my 2020 taxes it turned out my income in 2020 was slightly lower than my 2019 income so they actually owed by $93 more. I didn't have to repay the overage but they sent me the additional $93.
No. There are two parts to the stimulus payment: the advance refund (the "check") and the tax credit (in the case of the third stimulus payment, it's a tax credit for the 2021 tax year). For the advance refund, you received the correct amount; and for the tax credit, the lowest it can be is 0 (it cannot be negative).
Let's look at the text of the law. For the 3rd stimulus payment, this is in the American Rescue Plan Act of 2021, section 9601, which inserts 26 USC 6428B. Subsection (g)(1-2) specifies the eligibility and amount for the advance refund:
(1) IN GENERAL.—Subject to paragraphs (5) and (6), each individual who was an eligible individual for such individual’s first taxable year beginning in 2019 shall be treated as having made a payment against the tax imposed by chapter 1 for such taxable year in an amount equal to the advance refund amount for such taxable year.
(2) ADVANCE REFUND AMOUNT.—
(A) IN GENERAL.—For purposes of paragraph (1), the advance refund amount is the amount that would have been allowed as a credit under this section for such taxable year if this section (other than subsection (f) and this subsection) had applied to such taxable year.
So the eligibility and amount for the advance refund are the eligibility and amount of the tax credit, if the tax credit were applied to the 2019 tax year instead of 2021. There is a provision in subsection (g)(5)(A) where it will use the 2020 tax year instead of 2019 if you had filed your 2020 tax return prior to the initial determination date:
(5) APPLICATION TO INDIVIDUALS WHO HAVE FILED A RETURN OF TAX FOR 2020.—
(A) APPLICATION TO 2020 RETURNS FILED AT TIME OF INITIAL DETERMINATION.—If, at the time of any determination made pursuant to paragraph (3), the individual referred to in paragraph (1) has filed a return of tax for the individual’s first taxable year beginning in 2020, paragraph (1) shall be applied with respect to such individual by substituting ‘2020’ for ‘2019’.
But this did not apply to you because you had not filed a 2020 tax return prior to the initial determination date. So based on the facts of your situation and the provisions of the law, the amount based on your 2019 tax year, is the correct, and the only correct, amount you should get for the advance refund (the "check").
There is a provision in subsection (f)(1) that coordinates between the advance refund and the tax credit, whereby your stimulus tax credit in the 2021 tax year will be reduced by the amount of the advance refund that you received, but (and this is the key part) it cannot be reduced below 0:
(f) Coordination with advance refunds of credit.—
(1) REDUCTION OF REFUNDABLE CREDIT.—The amount of the credit which would (but for this paragraph) be allowable under subsection (a) shall be reduced (but not below zero) by the aggregate refunds and credits made or allowed to the taxpayer (or, except as otherwise provided by the Secretary, any dependent of the taxpayer) under subsection (g). Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1).
So, in the case where the amount of advance refund you received is greater than or equal to your stimulus tax credit (before subtracting the advance refund), at the worst, you would get 0 tax credit in the 2021 tax year (i.e. you get no additional credit). You would never have "pay the difference back" because that is only possible with a negative stimulus tax credit, and the law does not allow that.
I did a quote to see what I was going to get back it said 3200 then it ask for the stimulus payment then it dropped to 1800 so 3200 - 1400= 1800 so it says we are not paying it back but that's not what H&R is showing 2021 tax year.
