Stimulus Checks (Round 3) and Garnishment: What to Know

As the pandemic wears on, the federal government has issued its third round of stimulus check payments to qualifying Americans. And as with each new bill, there are new questions about who will get that money, when they will get it, and if the money will be garnished.

The new bill signed by President Biden on March 11, 2021, includes a third stimulus check for up to $1,400 per person, including children and adult dependents, as well as an expansion to the child tax credit and assistance with child care costs. For families in Florida, we know you have many questions. Here are answers to some of the big ones you may have.

Can your stimulus check be garnished to pay child support?

No! Your third stimulus payment cannot be garnished to pay overdue child support. This is different than the rules applied to the first stimulus check, which had allowed state and federal agencies to seize your stimulus check to cover past-due child support. The rule changed for the second stimulus payment and remains in effect for the third. Your third check cannot be garnished to pay overdue child support.

Can your stimulus payment be garnished to pay other debts?

Yes, rules under the third stimulus check allow garnishment for private debts, such as consumer debt and other private debt. However, outstanding tax debt and child support are protected from garnishment.

How will the stimulus payment affect your tax refund?

Stimulus payments are not considered income by the IRS, so you won’t be taxed on your stimulus money; however, there are situations that may impact your tax return. For example, if there was any missing money from your stimulus checks that needs to be claimed on your tax return, they could be subject to garnishment. We recommend speaking with a tax professional or accountant to discuss your tax situation, especially as you consider your 2020 tax filing options in light of the stimulus payments.

If you have questions about your stimulus checks in regards to child support and garnishment, please get in touch with us at Vasquez de Lara Law Group.