Third stimulus check and child support: What to know about the new payment

March 15, 2021 0 By boss

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What are the rules around the third payment and child support?


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The new American Rescue Plan includes a handful of provisions designed to help families with children, including an expansion to the Child Tax Credit, financial assistance to help cover the cost of child care, and broader guidelines around which children — and adultsqualify for a third stimulus check worth up to $1,400 per person. (Here’s when your check could arrive, and how to track it.) The new rules close one loophole with child support payments but may leave open a second.

As with the first and second checks, there are lots of questions around how much money parent who share custody of a child can receive and how your taxes play into your total check total. In some cases, calculating your total stimulus check money may be straightforward. In others, complications could affect you and the child’s other parent.

We’ll explain the thorny details of child support situations and stimulus checks, including the details revealed in the final bill (PDF) and what to do if you didn’t get as much as you think you should from the first two checks.

How is child support connected to the third stimulus payment?

With the third check, if you’re past due on child support, you can still receive your full stimulus payment. It won’t be redirected to cover late support payments. This holds true for any past-due federal or state debts: Your third payment is not subject to reduction or offset. However, private debt collectors may be able to redirect your payment to cover a debt.

Also, the IRS can withhold all or part of a stimulus payment if you are claiming it as Recovery Rebate Credit when you file your taxes. An independent taxpayer advocacy group within the IRS is working with the agency to address this issue.


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Stimulus check 3: How much money you’ll get



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New dependent guidelines open up who qualifies for stimulus money

The third stimulus check makes dependents of all ages count toward the family total, for $1,400 apiece. This time around, a qualifying dependent is anyone you claim on your taxes, including a qualifying child younger than 19 years old, a student younger than 24 years old or a qualifying relative who relies on you for care.

How other qualification adjustments affect your stimulus check

The new stimulus payment are “targeted,” which means that fewer people qualifying overall. The checks come with a sharp income cutoff, so that if you make above a certain amount — say, $120,000 as a head of household — you wouldn’t be eligible for any stimulus check money, even if you have multiple dependents. The date you file your taxes, and when the IRS processes that payment, could also play a significant role in whether or not you’d receive a full or partial payment, or maybe none.

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Stimulus check details can make working out your take-home total a little confusing.


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Is the joint custody stimulus check loop hole in effect for the third check?

Many parents who aren’t married and share joint custody of their children actually received two payments for the same child during the first round of stimulus checks, if they alternated year to year claiming those children on their taxes. To make this work, one parent would claim a child in an even year and the other in an odd year, so both received checks for the same child. That’s because the IRS looked at two different tax years — 2018 and 2019 — to determine eligibility for the first check.

For the second stimulus check, the IRS only looked to 2019 tax returns, but that doesn’t mean the double-dipping loophole has been closed entirely. If you’re a parent in a joint custody scenario like the one above and you typically claim a dependent child in odd-numbered tax years, you may be able to get a duplicate $600 child dependent payment as a tax credit when you file and claim the child on your 2019 tax return, similar to what you’d do if you did not receive a second stimulus check despite being eligible for one.

Since the IRS is using 2020 taxes if available, or 2019 if not, to determine your eligibility for the new payment, there’s a chance this loophole could remain open for some. For the third stimulus check, the payment should go to the parent who claimed the child on their taxes most recently (the IRS will use either your 2019 or 2020 tax return, whichever it has on file). The parent who does not receive a payment may be able to file for missing money on their 2021 tax return

We’ve contacted the IRS and tax experts for clarification on the rules this time around.

What about the Child Tax Credit?

The Child Tax Credit will distribute payments of up to $3,600 per child to tax holders who qualify for the income threshold. According to CNBC, parents of dependent children may be able to use the same even/odd tax filing method to both receive payments. The US Treasury and IRS have not yet offered guidance on how they will administer advanced payments to parents in split custody arrangements, CNBC said.

For more stimulus check details, here’s everything to know about third stimulus check for up to $1,400 per person and how to track your stimulus check money.

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.

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