Approximately one million Americans are eligible for unclaimed $1,400 stimulus checks this year, but most taxpayers no longer qualify for the 2021 Recovery Rebate Credit.
Despite this, the Internal Revenue Service is encouraging taxpayers to submit their 2021 tax returns before April 15 to receive any potential refunds they might have overlooked. This includes the stimulus check; however, Americans who try to claim the funds again could encounter serious repercussions.
Why This Is Important
The Recovery Rebate Credit, valued at $1,400, was initially distributed to support Americans financially during the coronavirus pandemic. Many individuals who were eligible for the rebate did not file their taxes that year and consequently missed out on the benefits.
Key Information
Taxpayers who attempt to improperly claim the stimulus check a second time may find their requests blocked by the IRS, according to an agency spokesperson.
Nonetheless, if you somehow receive the stimulus check a second time, you risk having the IRS demand repayment along with penalties and interest, the spokesperson informed Newsweek.
Currently, about 1.1 million Americans have refunds totaling over $1 billion still unclaimed with the IRS, but after April 15, these funds will revert to the Treasury.
Attempting to claim stimulus funds again is inadvisable, as it could result in substantial fines and complications in the future.
Qualifying individuals for the Recovery Rebate Credit can expect to receive their payment through paper check or direct deposit, provided their adjusted gross income did not exceed $75,000 in 2021.
For married couples, the limit rises to $150,000 for the 2021 tax year.
Comments from Experts
Kevin Thompson, a finance expert and CEO of 9i Capital Group, shared with Newsweek: “In most instances, the IRS already has this information in their system and will catch the mistake before issuing the payment. However, errors can occur. If the IRS mistakenly sends out additional funds, they will eventually seek to recover it—likely with interest.”
Michael Ryan, a finance expert and founder of MichaelRyanMoney.com, cautioned Newsweek: “If someone has already received the third stimulus payment or claimed it on a prior tax return, attempting to double-dip could lead to significant repercussions. We’re talking about a 20 percent penalty right off the bat. That’s $280 on a $1,400 claim! Plus, you’ll accrue daily compounding interest until it’s repaid. Ouch.”
Alex Beene, a financial literacy educator at the University of Tennessee at Martin, remarked to Newsweek: “When Americans hear about new rounds of stimulus checks being issued, it naturally stirs excitement and a desire to access those funds, if possible. However, these are not ‘new’ checks; they represent remedial payments for a limited group of roughly one million taxpayers who missed the original stimulus disbursement in 2021. Even if you navigate the IRS’s system or a third-party tax service to ‘requalify’ for a payment, you’re on shaky ground. If the IRS uncovers your actions, they can certainly reclaim that money and impose fines. It’s not worth the risk.”
Looking Ahead
In the event the IRS mistakenly distributes a second stimulus check for 2021, the agency will reclaim the funds, potentially creating future debt challenges, according to Thompson.
“Waking up to an unexpected debt can be a significant financial shock. Unfortunately, even if the error originates from the IRS—similar to Social Security overpayments—you remain obligated to repay,” Thompson explained.
Ryan noted that when taxpayers are flagged for incorrect claims, the IRS may add a permanent note to their file.
“Future tax returns could be scrutinized more closely, refunds might be delayed, and it could even impact other legitimate credits you’re attempting to claim,” Ryan advised. “What people need to understand is that while this opportunity is legitimate for those who genuinely missed out, it’s not worth jeopardizing your financial stability over an erroneous claim. The IRS has stringent measures in place regarding this, and the penalties can linger on your tax situation for many years.
