IRS Letters Demanding Back Your $1,400 Stimulus Check? Here’s What to Do

Michelle McIllwain
Jul 28
3 min read

Updated: Jul 30

You thought 2020 was over. But now, the IRS has decided it’s time to bring back a greatest hit: those $1,400 Economic Impact Payments (EIP) from the American Rescue Plan.

Recently, taxpayers across the country have been opening their mailboxes to find an IRS letter (often a CP21 or CP24 notice) stating that they received a stimulus payment in error—and need to repay $1,400. Cue the collective groan.

Before you panic and start drafting a tearful “but I already spent it on groceries and sanity” reply, let’s break this down.

Why Are These Letters Going Out Now?

The IRS is auditing stimulus payments issued in 2021 to find ineligible recipients.

You may get a notice if:

You filed a 2021 return showing income above the phase‑out limits.
You were claimed as a dependent on someone else’s return (and weren’t eligible).
You filed under an incorrect status or your eligibility changed between 2020 and 2021.
There was a data mismatch—like someone died, or the IRS applied your return incorrectly.

The IRS is basically saying, “Oops, we shouldn’t have given you that. Pay it back, please.”

What NOT to Do

Do not ignore the letter. This will not “go away.” The IRS has a better memory than your high school ex.
Do not just mail them a check if you aren’t sure. First confirm that you’re actually ineligible. The IRS makes mistakes. A lot.
Do not assume this is a scam. It could be—but the real IRS uses specific notices (CP21, CP24, CP14). If in doubt, confirm.

Steps to Take (Without Losing Your Mind)

Verify the Notice
- Check the notice number (top right corner).
- Compare the IRS records with your own 2021 tax return.
- Confirm whether the payment was listed as a Recovery Rebate Credit.

Was It Really an Error?
- Income limits for the $1,400 EIP:
- Single: phased out starting at $75,000
- Married filing jointly: phased out starting at $150,000
- Head of household: phased out starting at $112,500

If your income went over these thresholds in 2021, you may indeed have to pay it back.

If You Agree You Owe It
- Pay by the due date on the notice. You can pay online at irs.gov/payments.
- Consider an installment agreement if you can’t pay in full.

If You Disagree
- Call the number on the letter (yes, bring coffee).
- Prepare documentation: your 2020 and 2021 tax returns, notice, and any IRS transcripts.
- File a written dispute if necessary. The IRS allows you to request reconsideration.

Can They Take It Out of Future Refunds?

Yes. If you don’t pay, the IRS will treat it as an outstanding balance and can offset future refunds, tack on interest, and add penalties. And no, “but I really needed that $1,400” isn’t a defense. (We tried.)

When to Get Professional Help

If the math doesn’t make sense.
If the IRS insists you were ineligible but your return says otherwise.
If you’re already juggling IRS notices and don’t want this to turn into a collection case.

Pro tip: Don’t DIY an IRS fight when there’s a paper trail involved. That’s like bringing a water gun to a forest fire.

Bottom Line

The IRS is clawing back some $1,400 stimulus checks from taxpayers who were later found ineligible. If you receive a letter:

Verify before you pay.
Dispute errors promptly.
And if the IRS insists and you really do owe it, arrange payment to avoid extra penalties.

If you’re staring at an IRS notice wondering if it’s correct, contact ExFed Tax. We spent decades inside the IRS—so we know how to get them to listen when they’re wrong. And if they’re right? We’ll help you resolve it fast.