Who’s eligible to receive stimulus aid for dependent children?

The coronavirus response bill signed into law by President Donald Trump March 27 will send a total of about $300 billion to Americans in the form of direct payments. 

Exactly how much money each person will get depends primarily on their income and the number of dependents claimed on their tax returns. It can be challenging to understand, but if you’re looking for clarity, don’t turn to social media posts as a primary source of information.

One such post is leaving some parents worried: "If you’ve let somebody claim your kids for income tax purposes, you will not receive a stimulus check. The person who claimed your kids is gonna get it."

The reality isn’t as simple as the March 31 post makes it sound. Regardless of who claimed your children as dependents, you should still be eligible for a direct payment as part of the $2 trillion COVID-19 response legislation, as long as you meet the income requirements. But determining who will get the $500 payment that is available for each qualifying dependent child is complicated.

The coronavirus response package will send most single, adult Americans one $1,200 direct payment.

Individuals with Social Security numbers who reported an adjusted gross income of $75,000 or less on their 2019 tax returns will get the full $1,200 payment. Married couples filing jointly who earned less than $150,000 will receive $2,400. 

But the payment decreases incrementally as income goes up. Individuals who made over $99,000 or married couples who earned more than $198,000 and have no dependent children will not receive a payment.

Even people who might not normally file income tax returns — including some Social Security beneficiaries — are eligible for payments. 

Anyone claimed as a dependent is ineligible to receive a $1,200 payment, even if they are an adult, according to reporting by several news outlets.

Due to the coronavirus outbreak, the deadline for filing taxes on your 2019 income has been extended from April 15, 2020 to July 15, 2020. Keeping in mind that many people are still in the process of filing those returns, 2018 filings will apply in cases where the most recent filings are not available. 

If you claimed a child under age 17 as a dependent, your direct payment will increase by as much as $500 per qualifying child, subject to the income level restrictions.

"Whoever claimed the child on the 2019 return — or the 2018 return if the 2019 return is not available — will be eligible for that $500 additional payment," said Elaine Maag, a tax policy expert and principal research associate at the Tax Policy Center.

"Almost all children are claimed by parents," Maag said, but there are several legitimate situations in which others can claim children as dependents.

Caroline Bruckner, managing director of the Kogod Tax Policy Center at American University, said a typical example would be children being raised by relatives.

"It’s not uncommon for a grandparent to claim a grandchild living with them, or for an older sibling to claim their younger siblings or even stepsiblings where the parents are absent or deceased," Bruckner said in an email.

In these cases, the payment goes to the person who claimed that child as a dependent for 2019.

But Maag said there is still a chance that parents who did not claim their children on their 2019 tax returns could get the $500 direct payment. 

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If the parent is claiming the child as a dependent for the 2020 tax year — even if the child was claimed by someone else in 2019 — the parent could be eligible for the $500 payment, according to Maag. In that case, she said, the person who claimed the dependent in 2019 would not have to return the money, and the individual claiming the dependents for 2020 would also get a payment. 

The stimulus aid is considered an advance credit on tax reductions you would otherwise be seeing on your 2020 taxes. (You won’t have to pay them back.) So if taxpayers would qualify for dependent children payments based on their 2020 returns, the IRS will let them claim the payment.

"There’s not a claw-back mechanism," Bruckner said. "Congress is looking to pump money out to taxpayers as quickly as possible to weather this crisis — and they are using information taxpayers provide on their returns to quickly figure out who is going to qualify and how to get it to them as quickly as possible."

If you don’t claim your children in either 2019 or 2020, however, this does not mean you are ineligible for a stimulus check, as this Facebook post says. For most adults, you could still get up to a $1,200 direct payment as an individual or $2,400 as a married couple, subject to the income limits. 

There are also age restrictions that apply to children 17 and older. Families with dependents who are at least 17 won’t be getting $500 per child payments, and those dependents won’t be getting the $1,200 check, either.

A viral image reads, "If you’ve let somebody claim your kids for income tax purposes, you will not receive a stimulus check. The person who claimed your kids is gonna get it."

The reality is more complicated.

If you didn’t claim your child as a dependent, you’ll still get a direct payment as part of the federal coronavirus response package, as long as you don’t earn too much to qualify. 

What you won’t receive is the additional $500 that goes to individuals and couples for each dependent child. Instead, that money will be given to the person who claimed the child as a dependent. But if you are claiming a child as a dependent for the 2020 tax year, you become eligible for a payment as well.

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