Third stimulus benefits
The third stimulus will help more people than the first two stimulus. The amount of the new stimulus is $1,400.
College students and adult dependents will be eligible for the stimulus.
Young adults may be eligible for a stimulus check by filing their taxes independently. This can be of particular benefit to students whose parents make too much to receive the stimulus. Since the parents wouldn’t be eligible for any stimulus due to their income, their dependents would be eligible to receive the stimulus by filing independently. Individuals who want to qualify for the stimulus on their own should file a tax return as soon as possible to try to become eligible.
Additionally, young adults who didn’t file independently in 2019 and weren’t claimed as a dependent, will still be able to receive their first stimulus check. They will be able to receive the first stimulus by claiming the Recovery Rebate Credit from the Cares Act on their 2020 tax return.
The Center on Budget and Policy Priorities (CBPP) estimates as many as 15 million adult dependents and older children were not eligible for the previous stimulus payments under the CARES Act.
The amount that adult dependents will receive will depend on the income of the person claiming them on their taxes.
The phaseout range starts at $75,000 for singles, $150,000 for married couples filing jointly, and $112,500 for heads of households.
If the income is at or more than $80,000 for singles, $160,000 for married couples filing jointly, and $120,000 for heads of households, they won’t qualify for the third stimulus.
If you are past due on child support, you can still receive the entire stimulus payment. Unlike the previous stimulus payments, it won’t be used to pay late child support payments. Any past-due federal or state debts won’t affect the stimulus. However, private debt collectors may be able to use the stimulus to apply toward debt.
The IRS overpaid stimulus to some parents when the first two payments were made. This was due to the fact that some divorced parents alternate years for claiming their children. The IRS looked at both 2018 and 2019 to determine eligibility for the first check. So, if one parent claimed the child in 2018 and the other parent claimed the child in 2019, both parents received the stimulus for the same child.
The second stimulus check was based only on the 2019 tax return. However, if one parent got the stimulus and the other parent claimed the child on their 2020 tax return, they would receive the stimulus for the same child by claiming the Recovery Rebate Credit.
David Zubler is a tax accountant and Enrolled Agent representing clients before the IRS with over 25 years of tax experience. He is the author of four tax books and is the founder and president of Your Tax Care. The company provides business and tax education to the public at its website, YourTaxCare.com. David can also be contacted by email at firstname.lastname@example.org