As of December 29, 2020 the Internal Revenue Service (IRS) and the Treasury Department began delivering a second round of Economic Impact Payments as part of the 2021 CARES Act (stimulus checks). Direct deposit and paper checks started being distributed on Wednesday December 30, 2020. Please visit IRS.gov/eip for further information on the stimulus checks.

 

How to calculate your second round of stimulus income

Eligible individuals will automatically receive an Economic Impact Payment of up to $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child under the age of 17. Generally, if you have adjusted gross income for 2019 up to $75,000 for individuals and up to $150,000 for married couples (found on page 1 line 8b of the Form 1040) filing joint returns and surviving spouses, you will receive the full amount of the second payment. For filers with income above those amounts, the payment amount is reduced.

Click here to visit Kiplinger.com to calculate your stimulus check if your check will be phased out.

 

Checking the status of a payment

Starting today, people can check the status of both their first and second payments by using the Get My Payment tool on the IRS website at IRS.gov, available in English and Spanish only.

 

Children age 17 or older and Adult Dependents are not Eligible for the $600 Stimulus Check

Only dependent children under 17 years old are eligible for the additional $600 stimulus payment to the taxpayer claiming them on their taxes. Like the first round of stimulus checks in March, adult dependents are once again largely left out of being eligible for some type of aid.

That means dependents who are 17 years or older, such as college students or disabled adult dependents, won’t receive stimulus payments. The Center on Budget and Policy Priorities (CBPP), a nonpartisan research and policy institute, estimates as many as 15 million older children and adult dependents were left out in receiving stimulus payments under the CARES Act and in this round.

These age requirements are determined using the same age requirements as the Child Tax Credit, according to the Tax Foundation, an independent tax policy nonprofit. So a qualifying child, under the age of 17 for the 2019 tax year, who has not provided more than half of their own expenses and lived with the taxpayer claiming them as a dependent for more than six months, is eligible for a stimulus payment.

The CBPP estimated that the CARES Act excluded the following groups from receiving the stimulus checks:

  • Five million 17- and 18-year-olds
  • Nearly four million college students aged 19 to 23
  • About 400,000 children aged 19 and older with disabilities
  • More than 5 million other adult relatives (such as elderly parents) who have little income and are claimed as tax dependents by their children or other relatives

 

What about dependents born in 2020?

If a child was born or adopted into your direct family in 2020, the taxpayer is able to receive the stimulus payment when claimed on the parents’ 2020 tax return.

 

Separated filing, divorce and custody scenario

For separated filing, divorce and custody scenario please click here.

 

 

Blog by Kim Storen, EA – Tax Team Lead, Senior Tax Professional

Learn more about Kim and the rest of the Storen Financial team here.