COVID-19 continues to impact the United States, the federal government is taking action to ease the burden on taxpayers. Most recently, Congress passed a massive stimulus package. A key feature of the stimulus is individual checks.
You can read my rundown on the basics of the stimulus checks here – along with answers to popular questions. I’ve been updating it regularly as readers submit questions (here’s how to ask). One of the most popular questions is: What happens to kids who have aged out of the child tax credit?
Here’s what we know from the bill: Stimulus checks will be $1,200 per adult – or $2,400 for married couples filing jointly – and an additional $500 per child, subject to income limits.
For purposes of getting the $500 per child, the bill uses the same definition for a child as you’d use for the child tax credit. The sticking point for most parents for this purpose is age: the child must be under age 17 at the end of the tax year. That means you do not get $500 for a child above the age of 16, even if they live with you and eat your food and spend your money and sleep in your house.
And I get that it’s unfair. You don’t have to send me angry emails. I have a child who fits that bill. She got left out of the stimulus plan. It stinks. But if you want to be mad at someone, be mad at Congress.
So if you can’t claim your child, you might think that the child could simply qualify on their own for a check. Unfortunately, that’s not the case for all adult children: dependents are not eligible to receive a separate check. They’re excluded under the language in the bill.
Who qualifies as a dependent? A dependent is a qualifying child or qualifying relative. The Internal Revenue Service (IRS) clarifies, at Pub 501, that a qualifying child meets the following criteria:
- The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.
- The child must be (a) under age 19 at the end of the year and younger than you (or your spouse if filing jointly), (b) under age 24 at the end of the year, a student, and younger than you (or your spouse if filing jointly), or (c) any age if permanently and totally disabled.
- The child must have lived with you for more than half of the year (some exceptions apply, including for school and the military).
- The child must not have provided more than half of his or her own support for the year.
- The child must not be filing a joint return for the year (unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid).
Realistically, many high school seniors, college students, and adult children living at home don’t provide more than half of their own support. Many rely on their parents to pay expenses, including health care. If that’s the case, that makes them – for tax purposes – a dependent so long as the other criteria apply.
(If you’re not sure whether a child provided more than half of his or her own support, you may find this IRS Worksheet helpful.)
If, however, a student or other adult child does not qualify as a dependent, they may be eligible for a check. If the child is not currently filing their own taxes, they may want to consider filing a tax return with the IRS even if they have no taxable income.
But what if a child would qualify as a dependent but you don’t want them to? Can a parent simply not claim the child and allow the child to file a tax return and collect a check? I don’t think so. I believe that if you qualify as a dependent, you’re a dependent unless you’re otherwise excluded by law. In other words, even if you don’t claim your child on your tax return, that doesn’t mean they’re not a dependent.
Some confusion still swirls around this point. As Sen. Majority Leader Mitch McConnell (R-KY) noted, Congress is trying to squeeze what would have been several months’ worth of work into five days of legislation. There are going to be holes and we will need guidance. Treasury has not yet issued guidance and I suspect that they will address this issue specifically. I expect to see it after the President has signed the bill into law.
I’ll update this article once that’s available. The IRS will eventually post information on its website, but for now, there’s just a banner: