Third stimulus check and child support: What to know about the new paymentMarch 15, 2021
The newincludes a handful of provisions designed to help , including an expansion to the , financial assistance to help cover the cost of child care, and broader guidelines around which children — and — worth . (Here’s , and .) The new rules close one loophole with child support payments but may leave open a second.
As with the, there are lots of questions around how much money parent who share custody of a child can receive and your total check total. In some cases, 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. 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.
New dependent guidelines open up who qualifies for stimulus money
How other qualification adjustments affect your stimulus check
Thewhich means that . The checks come with a , so that if you make above a certain amount — say, $120,000 as a head of household — you wouldn’t be , even if you have multiple dependents. The date , 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.
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 aand 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, whichever it has on file). The parent who does not receive a payment may be able to file for missing money on their .
We’ve contacted the IRS and tax experts for clarification on the rules this time around.
What about the Child Tax Credit?
The 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.will distribute payments of up to $3,600 per child to tax holders who qualify for the income threshold. According to
For more, here’s everything to know about for up to and how to .
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