Dependents and stimulus checks: What to know about eligibility, money, tax breaks, more - CNET

Whom Congress considers a dependent for stimulus checks has dramatically changed. Here's how it works.

Angela Lang/CNET

Since the Senate has approved a $1.9 trillion stimulus bill, roughly 13.5 million more dependents will count in the third stimulus check -- for $1,400 apiece. Unfortunately, the details surrounding qualifications, taxes and more are still a bit cloudy, especially if you're part of a fringe case for one reason or another.

The third stimulus check's projected arrival puts it in the middle of tax season, which also complicates the situation. Also, you might be wondering what happens if you're missing any stimulus money for dependents from either of the first two checks? What if you had a new baby in 2020, or you're in a family with mixed-status citizenship?

We'll explain what you need to know about dependents like older adults and people of all ages with disabilities, how changes to income limits could also potentially lower the amount of your stimulus check or make you ineligible altogether and all the rest. (On the flip side, here's who the IRS counts as an adult for stimulus checks.) This story was recently updated with new information.

Age is no longer a rule when it comes to dependents

For the first and second stimulus checks, qualified dependents were defined as anyone age 16 or younger. Here is how the first two checks compare with the third. Each dependent counted toward a flat rate in the family total, with no cap on the number of child dependents claimed. That rate was $500 for the first check, approved in March, and $600 for the second, which was approved and sent in December.

The Senate-passed bill (PDF) would earmark an additional $1,400 per child dependent, to be added onto the checks of their parents or guardians. For the first time, 17-year-olds and adult dependents (anyone 18 or older) would also be eligible for a payment as part of the new bill. This group would include around 13.5 million college students, older adults and children of all ages with certain disabilities. 

The Senate is now working on the bill with the goal of having President Joe Biden sign it into law by March 14, when federal unemployment benefits are set to expire.

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A new income limit could stop your family from getting a check -- regardless of dependents 

If the current version of the bill becomes law, the new third stimulus check will be targeted to families with a certain income threshold. In a change this time, dependents would not bring some families a partial payment as they did with previous checks -- the income limits would be absolute. (See for yourself with our $1,400 stimulus check calculator.)

Stimulus check income limits (March 6 version)

	Qualifies for full $1,400	Does not qualify for stimulus check
Single tax payer	AGI below $75,000	AGI of $80,000 or above
Head of household	AGI below $112,500	AGI of $120,000 or above
Married, filing jointly	AGI below $150,000	AGI of $160,000 or above

What mixed-status families should know about dependents and their check

In addition to opening up the definition of a dependent to all ages, Biden's $1,400 stimulus check proposal also seeks to include all mixed-status families. This could potentially mean that families with noncitizen parents but US citizen children would be eligible for stimulus money. This part of the bill is still being tweaked, and there is discussion of further restricting the stimulus check eligibility of undocumented immigrants.

For the second check families with one citizen parent could receive a payment, whereas the first stimulus check blocked all families with one noncitizen spouse if they filed jointly, even if they claimed a US citizen as a dependent. The same restriction applied to a noncitizen head of household who claimed a US citizen child as part of the previous tax return. Here's what to know about citizenship and stimulus checks.

Your stimulus check total could dramatically rise with new rules for dependents.

Sarah Tew/CNET

Expanding the Child Tax Credit could mean more money

One way families could get even more stimulus money is through an expansion of the Child Tax Credit, which passed unchanged in the Senate version of the stimulus bill. Age really is critical here. 

The new CTC rules would bring up to $3,600 per child under age 6, and $3,000 per child up to age 17 over the course of a year, for families that qualify. Payments would begin phasing out for individuals who make more than $75,000 and married couples who make more than $150,000. Payments would happen periodically from July through December.

Do dependents receive their own check?

Dependents don't receive their own stimulus checks, but they can add funds to the household's total. Children 16 years and younger who you claimed in your last tax filing added a flat rate of $600 to the household's second check. That's $100 more per dependent than in the first round of payments. The total amount of money allocated in any of the three stimulus payments would depend on your adjusted gross income, which you can also find on your taxes.

I gained new dependents since the last time I filed taxes. What does that mean?

Parents of babies born or adopted in 2020: You can claim dependent benefits from the first two checks retroactively on your 2020 tax return. Because eligibility for the first two stimulus checks was based on your most recent tax return, babies born in 2020 were excluded from their parents' stimulus check dependent benefits. But that money is not lost for good. The Recovery Rebate Credit on your 2020 return will recoup that missing stimulus money, which totals up to $1,100 for qualifying babies (the $500 dependent stimulus payment from the CARES Act plus the $600 payment from the second bill). 

You can do this before the third stimulus bill is passed, and your eligibility will be the same as it was for the first two checks. All you have to do is file your taxes -- and we recommend doing so sooner than later, because if a third check goes out before your new dependent becomes known to the IRS, you'll have to recoup that money next year.

You can also find out if you can claim a child or another relative as your dependent on your taxes with this tool from the IRS. 

Stimulus checks and the Child Tax Credit aim to help lift kids out of poverty.

Sarah Tew/CNET

Why dependents aren't always the same for taxes and stimulus checks

In terms of federal tax regulations, a dependent can fall into two categories: a qualifying child or a qualifying relative. They don't need to be children, or directly related to you, but they do have to meet certain requirements set out by the IRS. 

To be claimed as a dependent on your taxes, a qualifying child must be either younger than 19 years old, or a student younger than 24 years old at the end of the calendar year. If, however, your child is what the IRS calls "permanently and totally disabled," you can claim them as a dependent no matter their age. 

To claim a qualifying relative -- either a child or an adult -- as a dependent, they must meet other IRS criteria. This might include an elderly relative who relies on you for care. (Find out more about what older adults need to know about stimulus checks, including those who may be qualifying relative dependents.)

Even if a dependent was claimed on your tax return, only people who meet a specific definition of "child dependent" were eligible to count toward the household's money from the first round of stimulus checks due to the requirements of the CARES Act. The same was true for the second round under the December $900 billion law: The child dependent must be age 16 or under as of your 2019 tax return to qualify for any payment. 

However, as mentioned, the current proposal under consideration for a third check would make dependents of all ages, including young adults and older adults, eligible to add up to $1,400 each to the household's total. 

What's the tax form my dependents are listed on?

If you filed taxes in 2018 or later, you'll find your dependents listed on form 1040, US Individual Income Tax Return. In the middle of the first page, you'll see a box labeled Dependents. Dependents, along with their Social Security number, relationship to you and whether they qualify for a child tax credit or credit for other dependents, will be listed there. 

Find your dependent on your 2019 tax form 1040.

IRS

What if my spouse and I share custody of a dependent but file our tax returns separately?

In this case, a child can still only be claimed as a dependent on one return in a tax year. To find out who should claim the child on their return, check out the IRS information on a qualifying child of more than one person.

I'm divorced or legally separated but share custody of a child. What's the situation now?

Here's where things can get confusing. A child can only be claimed as a dependent by one taxpayer for a tax year. Typically, the child counts as the dependent of the custodial parent -- the parent who the child lived with for a longer period of time during the year, even if financial support came from the other parent. However, this isn't always the case. Find out more from the IRS here.

One case that has cropped up with the first check has been parents who aren't married and have joint custody and alternate years in which they claim each dependent child (or children) on their tax returns. In that case, both parents were eligible under the CARES Act to receive $500 per child (for a total of $1,000 per child between them both). 

Here's how that works: If you are a parent who didn't claim your child on your 2019 return, when you file your 2020 tax return, you may be able to claim up to an additional $500 per child on that return, if you qualify to claim the child as your qualifying dependent for 2020. 

Bottom line? A parent with 50/50 custody of one or more children who didn't receive a $500 payment per child as part of the stimulus package can get that money along with their tax refund after filing 2020 taxes (in 2021), regardless of whether or not the other parent received that payment for the same children in the first round of checks. Because these payments are essentially tax credits, they don't have to be repaid to the IRS, even if both (again, not married to each other) parents end up with a check for the same children. 

We don't yet know if these rules will change with a third stimulus check. (You can read our story about how stimulus checks impact child support payments here. And here's more information from the IRS about the qualifying child of more than one person.)

My dependent has a disability. What does that mean?

This is one area where the qualifications diverge for stimulus checks and taxes. If you have a child dependent with disabilities whom the IRS defines as "permanently and totally disabled," they can still count as a child dependent on your tax return, regardless of their age. The IRS says your child falls under this category if both of the following apply:

• They can't engage in any substantial gainful activity because of a physical or mental condition.
• A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death.

The rule has been different for stimulus checks so far. Children who are disabled or aged 17 years or older are not eligible for the $600 allotted to child dependents, unless they were aged 16 or younger on your 2019 tax return. However, it appears this rule could change with a third stimulus check. 

What do I do if my dependent has died recently?

With the first check, if a child dependent who was listed on your last tax return has since died, it's likely you were still sent the extra $500, and that they would be included in a second stimulus payment too. However, a payment made to someone who died before they received it should be returned to the IRS. You also cannot claim a stillborn child as a dependent, according to the IRS. 

For more information, here are all the details we know about so far about a third stimulus check. If you still haven't gotten your first or second check, find out how to claim a missing payment and learn how to report your missing check to the IRS.

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