Stimulus Check is helping the millions of low-income families and adult dependent who are specially students. The U. S. President recently announced another round of stimulus checks of $1400 for each dependent. This is the third round of stimulus checks issued by the IRS based on parents or guardians claiming dependent in their tax returns in 2019 and 2020.
So this can be a light of hope again for the low-income family who has dependent ages from 17 to 24 years old. They may not have an income source but this amount can help dependents be financially independent. More importantly, empowering the young with financial support is stimulating the economy and it is highly considered in the United States of America. In this article, we are going to discuss a lot of issues on this topic about eligibility, Income requirement, and how to get a stimulus check according to claiming as dependent in a tax return.
Content Outline
About Stimulus Check For Dependents
During the Covid-19 Pandemic, it has been hard to stand for the low-income family because there is no permanent income source. Millions of Americans are facing a crisis due to job loss, medium and small business shut down, and other reasons. So the stimulus checks or stimulus payment is one of the great ways to live hopefully better.
The President of the United States of America also declared this payment by stimulus check by $1.9 trillion to make sure the American can get back on track. This stimulus check payment depends on the college students age 17 to 24 who are depending on family and living with parents and guardians. They are directly dependent on their parents.
According to the IRS guideline, someone may get stimulus payment by filing a tax return. For example, in 2020 parents or guardians may file tax returns according to income guidelines and claim dependents on their income. After fulfilling all eligibility criteria, then the IRS will manage this stimulus check for the parents or guardians.
The Dependents To Get A Stimulus Check
The dependents are an adult aged by 17 and older. When a taxpayer provides a tax return, a dependent may be claimed during that tax return. If someone is claimed as a dependent during tax return, they are not entitled to pay any tax return. But they can qualify for a third stimulus check in 2021 in case they are claimed as dependent on the 2020 tax return.
There are more than 26 million people are going to be eligible for direct payment from the Federal government. So the eligibility as dependents is here for information.
- Those who are high school students up to 17 years old and were claimed as a dependent.
- The college students who are over 17 years old and were claimed as dependents.
- Elderly and Disabled were claimed by someone else.
Eligibility For A Stimulus Check
Stimulus check in this pandemic situation is worth ensuring a better life indeed. When you were dependent on someone’s else tax return, you may be lucky to get this stimulus check as well. The IRS (Internal Revenue Service) is explaining a five-part test to make sure they are eligible to get this stimulus check.
- The adult children need to be older than age 17 and younger than 19 to make sure they are considered adult-dependent from a tax perspective.
- The Taxpayer must claim the adult children as a dependent when they were students at least for 5 months last year and under the age of 24.
- You were not claimed as dependent on other people’s tax returns for the year 2020.
- There are income limit criteria for filing a tax return even if you have low income.
Getting A Stimulus Check If I Was Claimed As A Dependent
The stimulus check amount and eligibility will depend on either the 2019 or 2020 tax return. 2019 and 2020 are the main criteria to calculate stimulus checks. In case you didn’t file a tax return for the year 2020, the IRS authority will get information on the tax return filed in 2019. So it is still possible to get a stimulus check if you were claimed as a dependent in 2019. Even you may file a tax return for the year 2020, then the IRS will get information on your 2020 tax return.
But you get a third stimulus check and then your 2020 tax return is being filed and processed now. In this case, the IRS will make sure to send you additional payment for the difference between your actual payment in 2019 and 2020. The final amount of the third stimulus check will be based on after filing the 2020 tax return.
The taxpayer who has already claimed a dependent needs to follow the income criteria to make sure they are eligible for the payment of the third stimulus check. Those who earn $75,000 are entitled to get $1400. This amount may be doubled when the married couple filed a tax return jointly earning up to $2800 with payments for any dependent.
It is a little different for the individuals with adjusted gross income (AGI) between $75000 and $80000 and couples who earned $150000 and $160000. But it should be clear for each dependent who will get the same payment as the taxpayer. When married couples have two dependents and their payment is based on an AGI of $155000, they are going to get $2800 collectively. On the other hand, A married couple earning below the $150000 threshold with two dependents is going to receive $5600.
The third payment as a stimulus check will be determined based on income earned in the years 2019 and 2020. This can be exactly figured out when the taxpayer filed their tax return for the last year. Then the taxpayer must have claimed dependent in that last year’s tax return.
Ways To Get A Stimulus Check If Claimed As Dependents
The IRS and Treasury Department have a program of stimulus checks for the adult-dependent who are paid stimulus payment. There are mainly different ways such as direct deposit, physical mail check, and prepaid debit card.
Direct Deposit: it is one of the fastest methods of payment from the IRS. When your family has a bank account and routing number and has linked with the IRS, the payment is going to hit the family’s bank account. Additionally, the Treasury Department also is working to make bank account more accessible and available to make sure the family gets this payment to their account.
Mailed Check: Mailed check is considered a long process of payment that can take even a week. For this, you need to be prepared to get any letters and notifications from the IRS department. At some times, the delivery of this document may be longer and you should contact the IRS if that happens.
Prepaid debit card: the IRS recently started to settle payment through debit card. Even if it takes a week but this has been started officially and the IRS will go on delivery of payment through this payment mode.
A stimulus Check is considered as a refundable tax credit which is also the same as a recovery rebate credit. There are different rounds of stimulus checks and the third stimulus check is completely different from another round.
Frequently Asked Question
Some questions come to the mind of the adult and tax filer. These questions are important and you should know all types of information to make sure you are on the right way.
How can dependents qualify for their stimulus check?
This depends on adjusted gross income in case you are filing taxes separately. But It is important to note that you may not get your stimulus check in case your parents file taxes and strongly claim you as dependents. Then payment of stimulus check will be added to your parents’ total. When you as dependents earn and partially have to depend on your parent’s income and fulfill the requirement to get your stimulus check under the IRS rules, you will be eligible to get your stimulus check.
If I work and earn as a dependent, what will happen in this case?
The dependents may not sit idle but they also work and earn to meet their spending. In case these dependents meet half of the spending and have to depend on their parents for another half of the spending, they also will fulfill the requirement to be dependent. In the case of their income, the dependents have to file taxes which can be categorized by earned income and unearned income. For their income, they will have to file a tax return or their parents should file a tax return for them,
Who does the IRS consider an adult or a dependent for stimulus payments?
Under the tax law especially in terms of stimulus check, it is important to define adult or dependent clearly. There are rules from the tax law defining dependents. To be dependent, you must depend on your parent’s income. Then your parent should explain you as a dependent to get stimulus payment in the year 2019 or 2020.
Are payments based on 2019 or 2020 income?
The stimulus check only will be calculated based on 2019 and income as well. But you have recently filed your 2020 tax return. Then payments will be based on 2020.
What happens in case you are married or have a child?
When you are under 24 years old according to the definition of dependents and married, you will not be considered as dependent according to the IRS rules. You will be eligible for your stimulus check.
What if I was a dependent last year, but now I am not?
When you were claimed as dependent as last year but you are not claimed as dependent in 2020. In this case, you will be eligible for a stimulus check for the year 2019.
Final Verdict
Stimulus check as the third round is worth adding financial support for the dependent who are from low-income individuals. This stimulus check is also another way to boost economic activities as this amount directly helps the young generation. The parents of these dependents should study for exact information from an authentic source and know details about the IRS policy especially income requirement and eligibility criteria. There may be more information and this can be better for you in case you consult with a tax expert who deals with tax issues.