IRS may keep stimulus payments from some with outstanding debts

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IRS may keep stimulus payments from some with outstanding debts


Millions of Americans are still waiting to receive stimulus payments — and many of these payments might never come.

Last year’s CARES Act, which authorized the initial round of stimulus payments, prohibited the Internal Revenue Service from retaining money except when needed to satisfy child support debts, noted Erin Collins, the National Taxpayer Advocate.

But another, subsequent law allows the IRS to hold some stimulus payments not yet received from the second round made in January 2021 to satisfy a wider range of debts, she said in a Jan. 28 statement.

Along with child support, those additional debts can include unpaid student loans and some federal and state back taxes.

This means stimulus paymentsstill owed to people with outstanding debts could be held or “offset” by the IRS, creating hardships and effectively treating taxpayers differently, depending on when they receivedor were supposed to receive payments, Collins said.



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