What Is the Recovery Rebate Credit?
The Recovery Rebate Credit was established to deliver financial assistance during the COVID-19 crisis. This payment of $1,400 per individual was allocated to qualifying Americans. However, millions neglected to file their taxes for that year and consequently missed out on these funds. The IRS is now offering these individuals a final opportunity to claim what is rightfully theirs, provided they genuinely qualify. Single taxpayers were eligible with an adjusted gross income (AGI) of $75,000 or less in 2021. Married couples filing jointly could qualify with an AGI of $150,000 or less. Payments were distributed through direct deposit or mailed checks.
Also Read: IRS Stimulus Check: How to check your $1,400 payment status before April 2025 deadline
The Risks of Filing a False Claim
Taxpayers attempting to claim the stimulus payment a second time could have their requests rejected by the IRS. An IRS representative informed Newsweek that the system is programmed to identify duplicate claims. However, if an incorrect claim is processed, the IRS will seek repayment along with penalties and interest.
Financial expert Kevin Thompson, CEO of 9i Capital Group, warns, “In most situations, the IRS already has this information in their system and will detect the mistake before issuing the payment. That being said, errors do occur. If the IRS erroneously disburses funds, they will eventually reclaim it—usually with interest.”
Michael Ryan, founder of MichaelRyanMoney.com, elaborates that trying to claim a second stimulus check could incur substantial costs. “You’re looking at a 20 percent penalty right away. That means $280 on a $1,400 claim! Plus, there’s daily accruing interest until it is returned. Painful.”
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The Fine Print: What Happens If You Get Caught
If the IRS accidentally issues a duplicate payment, they will reclaim the funds. This could unexpectedly burden taxpayers with debt, as Thompson cautions. “Waking up to unforeseen debt can be a severe financial blow. Unfortunately, even if it’s the IRS’s fault—similar to overpayments from Social Security—you’re still liable to pay it back.”
Once identified for an incorrect claim, taxpayers may find their future tax returns subjected to enhanced scrutiny. Ryan describes, “Future returns may receive additional examination, refunds could face delays, and it could even impact other legitimate credits you aim to claim.” He advises taxpayers to steer clear of risky moves: “The IRS does not take this matter lightly, and the penalties can linger in your tax situation for years.”
Also Read: IRS Stimulus Check: Find out if you qualify for a $1,400 payment | Eligibility criteria
What You Should Do Instead
If you believe you qualify for the Recovery Rebate Credit, the IRS recommends filing your 2021 tax return at your earliest convenience before the April 15 deadline. This is the final chance to claim any outstanding refunds from that year. The IRS estimates that around 1.1 million Americans have refunds totaling over $1 billion awaiting collection. After the deadline, this money will revert to the U.S. Treasury.
Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, advises against making fraudulent claims. “When people hear about new stimulus checks being distributed, there’s understandably excitement and a desire to access that funding. However, these aren’t ‘new’ checks; they are catch-up payments for a small group of about one million taxpayers who initially missed out on stimulus funding in 2021. Even if you navigate through the IRS’s system or a third-party tax service to ‘requalify’ for a payment, you are in the wrong, and if the IRS uncovers your actions, they can certainly recover that money and impose fines. Don’t do it.”
The opportunity to claim your rightful refund is swiftly closing. However, trying to manipulate the system could lead to lasting consequences. The IRS is clearly stating: if you are not genuinely eligible for a second stimulus check, do not attempt to claim one. The risks significantly outweigh any potential short-term benefit.
Act prudently—file your taxes if you are eligible, but avoid unnecessary risks that could jeopardize your financial future.
