Third stimulus checks and child support: Everything to know about the new paymentMarch 16, 2021
Thehas several provisions designed to help , which includes an expansion to the . It also includes financial assistance to help cover the cost of child care, and broader guidelines about which children (and ) are of up to . (Here’s , and .) The new rules close one loophole with child support payments and may shut down a second.
There are still many questions about how much money parents who share custody of a child can receive andyour check total. may be straightforward, but complications could affect you and the child’s other parent.
We’ll help explain the complicated details of child support situations and stimulus checks — including the details revealed in the final bill and what to do if you didn’t get as much as you think you should from the .
How is child support connected to the third stimulus check?
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’re claiming it as 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 eligibility for stimulus money
Is the joint custody stimulus check loophole in effect for the third payment?
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 years claiming those children on their taxes. In other words, if one parent claimed a child in an even year and the other in an odd year, both received checks for that 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 tax return, similar to what you’d do if you did not receive a second stimulus check despite being eligible for one.
The new stimulus bill may close that loophole for the third check, however. According to Andy Phillips, director at The Tax Institute at H&R Block, parents who aren’t married to each other may not both be able to receive stimulus money for the same dependent this time around.
Phillips said because of guidelines Congress included in the new law, “it’s possible that if an advance payment is received by one parent for the dependent, no additional payment can be made for the same dependent on the other parent’s return (by claiming the Recovery Rebate Credit).” Phillips said the Treasury Department is expected to issue guidance on this situation.
What to know 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
How other eligibility 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.
For more, here’s everything to know about for up to and how to .
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.