Most adults in the U.S. will be getting coronavirus stimulus checks for $1,200 or $2,400 for those who are married, so long as their income is under $75,000 for singles or $150,000 for married couples. But what about the extra $500 you’ll get for each child under 17? The rules around those payments are a little more tricky.
1. My ex and I share custody of our kids. Who will get the $500?
The parent who claims the children as dependents on their tax return would be the one who gets the $500 payment.
2. I have custody of my grandchild. Will I get the $500 credit for them?
You should be able to, so long as you’re able to claim them as dependents on your tax return. To claim a child as a dependent, they generally need to be related to you, live with you more than half the year and receive at least half of their support from you. That includes not just your children, stepchildren and foster children, but also younger siblings, grandchildren, nieces and nephews under 17 if they can be claimed as your dependents.
3. I had a baby in 2020. Will I get the extra $500?
Eventually. But you’ll have to wait until you file your taxes for 2020, which means you won’t get the $500 until early 2021. The stimulus checks are technically a credit for 2020 taxes. But since we’re only three months into the year, the IRS has to use our 2018 or 2019 returns to determine whether we’re eligible for payments. Since your new addition won’t be listed on those returns, you’ll have to wait another year for the $500 credit.
4. My child turned 17 in 2019, but I haven’t filed my 2019 tax return. Can I still get the extra $500 for him?
The jury’s still out on this one. The bill doesn’t specify a date for when someone’s 17th birthday makes their parents ineligible to get the child coronavirus stimulus credit, and the IRS hasn’t said how it will handle this situation.
5. I claim my college kid as a dependent. Do I get the extra $500, or do they get their own $1,200 check?
Unfortunately, neither. The bill is clear that only children ages 16 and younger qualify for the $500 payment. We just don’t know exactly when someone’s 17th birthday would make them ineligible. But provided that your child is 17 or older for the tax year the IRS uses to calculate your payment, you don’t get $500 on their behalf. Even if you claim your child as a dependent, they won’t qualify if they’re 17 or older.
To get the $1,200 stimulus payment, you can’t be claimed by someone else as a dependent. That means a lot of young adults won’t get the money. Same goes for other adult family members you claim on your tax return. For example, if you claim your elderly parent as a dependent on your tax return, they wouldn’t qualify for the $1,200 or the $500.
6. Is there a limit on how many children I can get the additional $500 for?
No. You can get the credit for each child under 17 who lives in your household more than half of the time.
7. Is there an income limit for receiving the $500 per child payment?
Yes, but the way it works is confusing. First of all, the $1,200 benefit for singles and $2,400 for married couple starts to phase out when your income is above:
$75,000 for singles.
$112,500 for those who file as head of household
$150,000 for married couples who file jointly.
The benefit is reduced by 5 cents for every dollar you earn above those amounts.
The $500 per-child-credit will be tacked onto the check your family receives; you won’t get a separate payment for a dependent child under 17.
So if you’re married with one child and your adjusted gross income is $150,000, your family would get a single check for $2,900: $2,400 for you and your spouse, plus $500 for your child.
8. Is the credit taxable?
No. None of the stimulus payments will be taxable.
9. What if my child was born in 2019, but I still haven’t filed my 2019 return?
This is a situation where you’d want to file your 2019 return ASAP instead of taking advantage of the coronavirus tax deadline extension.
The IRS will use your 2018 return to determine your stimulus payment if you haven’t yet filed for 2019. But if the IRS uses your 2018 return — before your child was born — to determine your payment, you’ll have to wait until your 2019 return is processed to get the additional $500.
If you have legal issues related to Corona Virus Stimulus, call Lasiter & Jackson at (602) 234-5900.