Thought you knew stimulus checks? Here's every catch

Garnishment, wait times and the nitty-gritty of claiming stimulus checks during tax season.

Tax season 2021 is upon us, and if you were missing any stimulus money, now's the time to claim it on your taxes. The filing deadline is April 15, but the IRS is now accepting 2020 tax returns. Just 24 hours after you file your taxes online, you can begin tracking the status of your tax refund (the IRS is asking taxpayers to avoid filing paper returns this year, if possible, to keep the process moving quickly). 

If you didn't receive the first or second stimulus checks that were sent out last year, you can file for a Recovery Rebate Credit -- a one-time special benefit that most people received last year in the form of a stimulus check.

Sounds simple, right? But just when you think you know the stimulus check situation, you don't. Even if you claim missing stimulus money on your 2020 taxes, there are a few catches that could prevent you from getting that money on time -- or at all. Here's what you need to know right now about claiming stimulus money on your taxes.

Claiming a Recovery Rebate Credit takes extra work, even for nonfilers

Unfortunately, your missing stimulus money won't just show up on your tax return. You have to file a form to claim your money as a Recovery Rebate Credit. We've got full instructions on how to file for a Recovery Rebate Credit here, but the basics are: 

1. Confirm your payment status online through the IRS. 

2. When you file your 2020 tax return (check out our list of the best tax software), claim your Recovery Rebate Credit on 2020 Form 1040 or Form 1040-SR. The IRS offers Recovery Rebate Credit instructions to help you work out if you're missing a payment and for how much.

3. If you're filing for a partial check rebate, you'll need the IRS' calculated amount from the letter the IRS sent confirming your payment. This was called Notice 1444 for the first payment and Notice 1444-B for the second payment.

If you don't usually have to file taxes -- for example, if you receive SSI or SSDI, or if you're retired -- you should have automatically received a first and second stimulus check. But if your check never arrived (there were lots of reasons why this could have happened), you will still have to file a 2020 tax return this year and claim your Recovery Rebate Credit to claim your missing stimulus money. We've got instructions on how nonfilers can claim this credit.

You'll have to wait for the IRS to process your tax return before you get any money 

Once you file your taxes with your Recovery Rebate Credit form, you'll have to wait for the IRS to process your tax refund. If you file for the credit and are owed money, you'll either see the amount of your tax refund increased or the amount of tax you owe reduced, depending on the amount of stimulus money you're eligible to receive. 

The IRS says it issues most tax refunds within 21 days, but many people will get theirs far sooner. We've got several different timelines for when you can expect your tax refund to arrive based on your situation. 

If you need to file for a tax extension, your wait will be longer

You can file your tax return anytime before the April 15 deadline. However, if you need more time, you can file for an extension with the IRS, which would move your deadline to Oct. 15. 

You can still claim missing stimulus money through a Recovery Rebate Credit if you file your taxes with an extension, but keep in mind that this means your refund will arrive correspondingly later. For example, if you wait until Oct. 15 to claim it, the earliest you would get the money is Oct. 22. 

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If you owe the IRS any money, you may not get a check

Under the CARES Act from March 2020, your first stimulus check could be seized by state and federal agencies to cover past-due child support. That rule changed with the second stimulus check, which couldn't be taken if you owed money for child support. 

However, these rules are different when you file for missing stimulus money on your 2020 tax return. For certain outstanding debts -- including past-due child support and unpaid student loans -- the IRS can withhold some or all of your unpaid stimulus payment issued as a Recovery Rebate Credit when you file your taxes. An independent taxpayer advocacy group within the IRS is working with the agency to address this issue. (Find out more about your stimulus check rights.)

If you do owe the IRS money, you may be wondering: Should I bother filing for a Recovery Rebate Credit if the agency is going to take my money away? It likely still makes sense for you to do so, because it will help you pay down your debt -- even if you won't be able to access those funds as the laws intended. 

Your money could be garnished, even if you're claiming it due to an IRS error

There were lots of reasons why you may not have received your first or second stimulus check even though you were eligible, including IRS errors, closed bank accounts or changed addresses. Unfortunately, even if there was an IRS error, if you did not get the money as a direct deposit, paper check or EIP card, the IRS can claim it to cover your debts when you file for it on your tax return. 

This is due to a limitation that subjects Recovery Rebate Credits to regular rules for unpaid federal taxes and certain other debts, so the credit is treated differently than the stimulus checks paid up front. 

If the IRS makes another error with your third check, you'll have to wait until tax season next year to get it sorted out

Much like the first and second checks, you'll be able to claim any missing money from the third check owed to you or your dependents during tax season next year, 2022. That's a long way away. The best thing to do right now to make sure your third check does arrive on time is to file your tax return as soon as possible. 

4 ways to get your refund faster 

• If you're filing for a Recovery Rebate Credit, the IRS probably sent you a letter last fall. If you saved the letter, which the IRS suggested, you'll need the amount of the payment listed in the letter when you file this year.
• If you're able to file your taxes before the April 15 deadline, it can mean quicker turnaround for your refund, if one is due to you. In addition, any potential missing stimulus payments are also tied to your taxes this year, so filing sooner would mean a tax refund as well as a stimulus check in one payment. It's also more likely you'll get your full payment with the new stimulus check in 2021 because the IRS would base your third stimulus check on your 2019 and 2020 taxes, according to the latest proposal (PDF)-- which isn't law yet.
• If you don't have direct deposit set up with the IRS, setting it up when you file your taxes can mean seeing your refund sooner -- especially if you combine it with electronic filing. The IRS has actually asked taxpayers to avoid filing paper returns if possible as well, to safeguard against further delays.
• If you've moved recently or you're planning to move, you'll need to inform the USPS and the IRS of your new address, even if it's temporary. Keeping your address information up to date helps to ensure that you receive all your stimulus checks -- the potentially missing ones too -- as well as your tax refund. 

For more, check out everything we know so far about a third stimulus check, when it might arrive and how much money you could get.