Seizure of Stimulus Checks & The IRS

The Stimulus Checks are a huge topic of discussion, confusion, panic, and speculation, all over the United States. From pondering whether or not you’ll even get one, to being insulted that the government is trying to make you feel good about being given your own money, there’s a lot of questions the people want to have answered. What if you owe the IRS money? Can they seize your stimulus to offset the debt you owe them? Well, if you look at the CARES Act, you’ll find a number of provisions for the seizure of stimulus funds.

CARES Act Provisions

For example: if you owe money to a private collector, all or part of your check can be used to offset the balance of what you owe. If you owe money to a bank; either for unpaid internal credit cards or loans that have yet to be sold to collections, they can claim your stimulus check. Or, if the state you live in has referred your past-due child support payments to the Treasury Offset Program (TOP), then they are legally allowed to seize your stimulus.

One thing they can’t do, though, is take your stimulus to offset your tax debt. Oh, they can take it if you owe money on a car, but if you’re either on a payment plan or owe taxes from 2019, (the filing date for which has been moved to July 15th) then they aren’t legally allowed to take your money under the CARES Act. Neither are they allowed to include your stimulus check in calculations of monthly income while you are filing for Bankruptcy.

The stimulus package also includes provisions for those who are in default of their federal student loans, making it unlawful to seize your stimulus funds to offset your loans. Also, payments on federal loans have been suspended with zero percent interest until September 30th, 2020.