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IRS agrees to protect some stimulus checks from debt reductions

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IRS has agreed to not seize some Americans' stimulus check to offset outstanding federal tax debts, according to an agency watchdog.The issue is a change that Congress made in late December affecting how people with unpaid government debt would be treated if they claimed the first two stimulus payments — worth a respective $1,200 and $600 — on their 2020 tax return rather than receiving a direct payment like most Americans.Those who claimed a Recovery Rebate Credit would see it factored into their overall tax return, including liabilities.

That means, for instance, if you received a credit for a $600 stimulus check, but owe $500, you would only receive a payment of $100."It is a tax credit against your 2020 income tax," the IRS said in.

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