Dependents are now eligible for a greater sum of money in the third round of stimulus checks. However, with it has come stricter qualification criteria. This article will have all the information on dependents. Also, learn if the recently introduced tax breaks will make the family eligible for a bigger paycheck.
A brand new group of the third round of stimulus checks is being sent out currently. The latest category of individuals is eligible for these, as the beneficiaries of SSDI and SSI. Moreover, depending on whether there are dependents who qualify in the household, the amount in the stimulus checks can be much more than the previous two rounds. Reportedly, almost 13.5 million people more will receive the payment worth $1400 in this latest third round than the previous two stimulus checks.
The third stimulus checks are being sent out by the IRS at the same as tax refunds. The agency, though, has breathing space since the tax deadline day has been extended to 17th May. However, the third round has more requirements for dependents to meet before they can qualify for the payment.
This article will have every detail on what it would mean to be a dependent (of any age or other disabilities), along with if the new income limits will affect your stimulus check payment.
No Age Restrictions For Dependents
In the case of the previous two rounds of stimulus checks, dependents only qualified for them if their age was 16 or below. Every dependent also accounted for the total of the family but there was no limit to how many child dependents could be claimed.
The dependents were given $500 each in the first stimulus check which was signed off in March of last year. It was also a component of the government act called CARES. $600 was the rate in the case of the second check which was signed off and delivered in the last month of the year.
The recent American Rescue Plan sets aside $1400 for each dependent. There are no age restrictions and the amount will be given in the paycheck of their guardians or parents. As such, this will be a first for children who are 17 and also adult dependents (anyone aged 18 and above) to be getting a payment. The group reportedly numbers 13.5 million college-goers, children of any age with specific disabilities, and older adults.
Eligibility As Per The Latest Income Limits
The latest round of stimulus checks is specifically intended for families that fall under a particular income threshold. The latest addition to this time’s stimulus check is that dependents will not be paid partial amounts as was the case with the last two rounds. However, there is no negotiable space with the specified income limits.
For single taxpayers, if the AGI is under $75000 then they qualify for the full amount. If the AGI is $80000 or more then they will not be receiving any amount at all. For household heads, the AGI must be less than $112500 to get the full amount. A $120000 or more AGI will result in disqualification. Finally, for married couples and joint filers, the AGI threshold for qualification is less than $150000 while those with $160000 or more AGIs will not be receiving the third stimulus checks.
Tax Return Is A Must Even For Non-Filers
Although most people have received the dependents’ stimulus checks automatically, the IRS has stated that filing a tax return for 2020 will be necessary for some. The reason is that the agency may not know about all the dependents or have them in their system if the individual does not usually file tax returns. That is if they are non-filers. For instance, if a dependent was added in 2020 or a baby was born. The same also applies to any other category of dependents, including older adults and those above 16.
The IRS tool called Free File can be used to file the tax return if the AGI is below $72000. There is an option to choose any of the offers for free filing on the website. After choosing, the software will guide the user through the process of filing the return. The form for filing the Recovery Rebate Credit (RRC) or Form Number 1040 will also be included free of charge.
The IRS stated that payments known as “plus-up” are being sent to families and individuals who qualify for a greater stimulus amount. These depend on whether there are new dependents and other scenarios as per their tax returns of 2020.
Stimulus Checks For Families Of Mixed-Status
Apart from expanding the meaning of the term dependent for the $1400 third round of stimulus checks, the plan also takes account of all families that have mixed status. This implies that families that consist of parents who are not citizens but they have children with US citizenship are also eligible for the stimulus checks.
In the previous round, families that had even a single parent with citizenship were eligible for the payment. In the first round, even if one of the parents or a spouse did not have US citizenship, they did not receive the stimulus payment, regardless of their claimed dependent citizenship.
What The New Child Tax Credit Rules Imply
An additional method by which families might be receiving a greater amount is the recent expansion of temporary expansion of last year’s child tax credit. Age plays an important factor here.
The latest CTC rules ups the credit to $3600 for each child below 6 years of age. Each child whose age is 6 and more but less than 17 will receive $3000. However, the amount will start to decrease for single filers with AGIs above $75000 and couples with AGIs above $150000.
Payments are estimated to happen on a timely basis between July and December 2021.
Dependents And Stimulus Checks, All The Scenarios
Dependents do not get individual stimulus checks. However, they increase the check for the household. As such, babies born anytime in 2020 are claimable as dependents for the previous two rounds of stimulus checks as well. The RRC filing will amount to the $1100 claimable.
Moreover, federal taxes’ regulations separate dependents into two different categories: qualifying relative and qualifying child. For a qualifying child, the dependent must be below 19 or 24 if they are a student. But for “totally and permanently disabled” children, there are no age limits.
For a qualifying relative, the IRS has other specific criteria. Furthermore, listed dependents can be found on Form 1040 of any tax filings after 2018.
In the case of shared custody but non-joint filers, only one can claim the child as a dependent. Unlike the previous two rounds, the IRS will be closing the loophole that allowed both filers to claim the same child individually.
In the unfortunate scenario of a dependent having passed away, the payment will still be made until the IRS is notified of it. However, it should be sent back on moral grounds.