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VERIFY: Yes, money can be deducted from your stimulus payment

There are a number of legitimate reasons why money might be deducted from your stimulus payment.

INDIANAPOLIS —

The question

As millions of people get their latest stimulus payment, some are surprised to find they're not getting as much as they expected. 

"I got my check today but it was only $1,077. Are others getting shorted also?" 13News viewer Randy asked Verify. 

Randy wondered why his stimulus payment was $323 less than anticipated, and he's not alone. Others have contacted 13News Verify to ask why money had been deducted from their third stimulus payment, as well.

Why might you get less than expected, and can the IRS or others seize money from your stimulus payment?

RELATED: Stimulus checks for 30 million could be coming soon after SSA sends files to IRS

Our sources

The Internal Revenue Service, the National Consumer Law Center, the CARES Act and the American Rescue Plan, which is the legislation Congress passed to create the latest stimulus.

What we found

This third round of stimulus payments, enacted by the American Rescue Plan, is the largest yet. If you are eligible, you and every person in your household can receive $1,400.

The IRS could not explain to Verify exactly why Randy’s stimulus check was missing $323, but a spokesman did offer several scenarios in which stimulus payments can be reduced.

INCOME PHASE OUT: First, depending on your income, there is a small phase-out window that could reduce how much you get. As your income goes up, your stimulus payment goes down.

For example, someone making more than $75,000 but less than $80,000 in adjusted gross income will see their payment reduced from the full amount. If your latest stimulus check is $700 – half of the maximum amount eligible residents are entitled to – it is likely due to your income falling within the phase-out window. Individuals earning more than $80,000 in adjusted gross income ($160,000 for couples) do not qualify for the latest stimulus.

PRIVATE DEBT COLLECTION: Congress prohibited debt collectors from seizing last year’s stimulus payments, but they could not do that this time around because the third stimulus bill was passed through a process called budget reconciliation. So, if you owe money for privately held debt, such as private student loans, credit card debt or medical debt, a debt collector can access your stimulus funds through your bank account.

The American Bankers Association, National Consumer Law Center and other consumer and financial groups recently issued an urgent plea to change that. 

They sent a letter to Congress and the US Treasury, urging them to enact a stand-alone bill to protect stimulus payments from being seized by debt collectors. 

Some states already have laws or Executive Orders to prevent debt collectors from seizing stimulus payments but, so far, Indiana has not enacted such a law.

GOVERNMENT GARNISHMENTS: The government cannot seize money directly from your third stimulus payment to offset state and federal debts – with a notable exception. If you apply to get your stimulus payments as a tax refund through a Recovery Rebate Credit, that refund can be garnished for debts, such as overdue child support and money you owe for state and federal taxes.

So, we can verify: There ARE a number of legitimate reasons why money might be deducted from your stimulus payment. If you think the IRS simply made a mistake, the agency says it will make things right.

“The bottom line is if you’re owed more than you received, there will be a way later this year to work that out," IRS spokesman Luis Garcia told 13News Verify.

He said the IRS will announce how to do that through a series of Frequently Asked Questions on its website in the next few days.

If you have a question for the 13News VERIFY Team, send us an email at VERIFY@wthr.com.