Can they garnish the 3rd stimulus check?

Despite the fact that millions of people have already received third stimulus checks, the others may not be able to receive the money in their bank account. Unlike the second stimulus check, the new stimulus bill does not have the same protection against your $ 1400 check being confiscated by a debt collector.

Thus, if you are expecting your third stimulus check, you are most likely asking the questions “how will I know if my stimulus check was garnished” or “can debt collectors take my stimulus check” and many others.

Can my 3rd stimulus check be seized to pay my debts?

Yes, unfortunately, your third stimulus check can be seized to pay off some of your debts. Read on if you want to know why.

The second stimulus check bill states that your money cannot be garnished to pay off debts such as child support and also banks and private creditors. However, if we are talking about the third check, some of the rules have changed.

You should be aware that at the moment the third checks are not protected from all the garnishment (even though lawmakers are trying to solve this problem).

So now there are three types of outstanding debt that can be paid through garnishment: private debt, unpaid IRS tax debt and other government debt (such as child support).

3rd stimulus and child support

You are most likely also asking the questions “can stimulus check be garnished for child support” and “can child support take your stimulus”. So, please note that your third stimulus check cannot be withdrawn for child support. In March 2020, the CARES law stated that the first stimulus check could be withdrawn to cover overdue child support, however, this was changed for the second stimulus check. Thus, your stimulus check cannot be taken away if you owe money for child support. Thus, both the second and third checks cannot be used to pay out overdue alimony.

Important! Please note that although your second and third checks cannot be used to pay overdue child support, your tax refund and Recovery Rebate Credit can be. Thus, according to the bill that regulates the second stimulus check, your payment cannot be accepted if you are withholding money for child support. However, also remember that for some overdue debts (including child support) the IRS can withhold your unpaid stimulus payment (issued as a Recovery Rebate Credit) when you file your taxes.

Can banks and lenders garnish my stimulus check?

It is important to know that now banks and lenders can take your third stimulus check under certain circumstances. As you know, with the first stimulus check, private lenders and banks could have withdrawn your money in order to cover your outstanding debts. However, this changed when some states (such as California) issued orders that prohibit banks and lenders from garnish your stimulus check. Thus, with the second stimulus check, your money was protected from bank, collector or lender's garnishment. Thus, most likely the third stimulus check will most likely also be protected from bank garnishment, but most likely it will not have protection from private collectors and creditors.

Will my third stimulus check be taxed or not?

No, your stimulus payment will not be taxed, but there is one point you should pay attention to. So, since the IRA does not count stimulus checks as a source of income, they will not be taxed so you don’t need to worry about it. However, please note that if you are filing for missing stimulus money as a Recovery Rebate Credit on your tax return this year, then the IRS can garnish that money to pay off any tax debts