WASHINGTON — Question:
Which dependents qualify for an additional $600 in stimulus checks? Do teenagers qualify? What about college students? Are adult dependents eligible? How about babies born in 2020?
Answer:
Parents or guardians with qualifying incomes will be able to collect an additional $600 for their dependent, so long as this dependent was 16-years-old or younger on their parent's 2019 tax filing. Parents or guardians will be unable to collect for dependents who are 17-years-old and older.
Parents will not receive an additional $600 on their stimulus checks for babies born in 2020 because the payments are based on 2019 tax filings. However, parents will eventually receive this compensation when they submit their 2020 tax filings, so long as their income qualifies.
Source:
Henry Grzes, Association of International CPA's
Text of the Bill, "Consolidated Appropriations Act, 2021"
National Conference of State Legislatures, COVID-19 Economic Relief Bill Analysis
U.S. Tax Code, Guidance on 'Qualifying Children'
IRS Guidance for CARES Act Passed in March
Process:
On Dec. 27, President Donald Trump signed into law a mammoth bi-partisan bill, that would in part distribute stimulus checks to millions of Americans.
Under this bill, individuals would receive a $600 check, so long as they made $75,000 per year. Couples making up to $150,000 would receive a check for $1,200.
The checks would begin to phase out above these income levels, maxing out at $87,000 for individuals and $174,000 for couples. Income levels will be based on 2019 tax filings.
Families would also receive an additional $600 for each dependent child under 17-years-old. The VERIFY Team turned to Henry Grzes from the Association of International CPA's for more information on dependents.
Grzes said individuals must pass two tests to be considered a dependent. The first requirement is known as the 'support test.'
"The parent who's claiming you has to provide more than 50% of your support…” he said. "That would include food and lodging, tuition, etcetera, etcetera.”
The second test is referred to as the 'Residency Test.'
“That child has to be living with you more than 50% of the time,” he said.
Parents or guardians will only be able to collect an additional $600 if their dependent was 16 or younger when the parent submitted their 2019 tax filings.
“If you’re 17 or older," Grzes said. "And can be claimed as a dependent on your parents’ return, you’re not going to qualify for this additional $600.”
The additional $600 will also be available for parents of dependents that are away at boarding school or college, so long as they are less than 17 years old.
“That’s considered a temporary absence," said Grzes. "So they’re still technically living with their parent...They have the right to claim you as a dependent.”
Things get more complicated for parents who have a baby in 2020. These parents or guardians will not be able to collect an additional $600 in their stimulus checks, because the payments are based on the 2019 tax filing.
However, Grzes said these parents should expect $600 when they file their 2020 tax returns, in the form of a $600 recovery rebate credit.
"It may seem odd," he said. "You use the 2019 return as a basis for the payment but you reconcile it with the 2020 return info."