However, there is good news for itThe includes a major extension to the that could reduce child poverty by 40%, according to a report from the Center for Budget and Policy Priorities. That’s on top of the for eligible persons and the new bills , which means that many families receive more money this time.
Here are the details we’ve gotten so far, includingand what to do if you (Plus, there would be one Read on as we sort out and explain the complicated details surrounding child support situations and incentive checks.
Is the loophole for joint custody and incentive checks closed for the third payment?
In fact, many unmarried parents who share custody of their children actually received two payments for the same child during the first round of incentive checks, if they alternated between years claiming those children on their taxes. In other words, if one parent claims a child in an even year and the other in an odd year, both can receive checks for that child. That’s because the IRS looked at two different tax years – 2018 and 2019 – to determine if they were eligible for the initial check.
For the second stimulus check, the IRS only looked at the 2019 tax returns, but that doesn’t mean the double loophole was completely closed. If you are a parent in a joint custody scenario like the one above, and you usually claim a dependent child in odd tax years, you may be able to get a $ 600 double child dependent payment as aand claim the child on your tax return, similar to what you would if you didn’t receive a second stimulus check, although you do qualify for one.
That loophole could be closed in the new incentive law that allows the third check. According to Andy Phillips, director at The Tax Institute at H&R Block, parents who are not married to each other and who alternate custody of an eligible dependent may not both be eligible for incentive money for the same dependent this time.
Phillips said that because of guidelines Congress has put into the new law, “ it is possible that if a prepayment is received by one parent for the dependent, no additional payment can be made for the same depending on the return of the other parent ( by claiming the recovery discount). Credit). ”Phillips said the Treasury Department is expected to provide guidance on this situation, but not at this point.
How is child support related to the third incentive payment?
With the third check, if you’re in arrears with child support, you can still get your full incentive payment. ItThis is true for federal or state debts in arrears: your third payment will not be reduced or settled. However, private debt collection agencies may be able to divert your payment to cover a debt.
Also, the IRS may withhold all or part of an incentive payment if you claim it aswhen you file your taxes. An independent taxpayer advocacy group within the IRS is working with the agency to address this issue.
New dependent guidelines make it possible to qualify for the third incentive payment
The third stimulus check makescount towards the family total, for This time, an Eligible Dependent is someone you make a claim against including an eligible child under the age of 19, a student under the age of 24, or an eligible family member who relies on you to provide the care.
What you need to know about the 2021 child discount
Theof maximum to tax holders According to CNBC, parents of dependent children may be able to use the same even / odd tax return method to receive both payments. The U.S. Treasury Department and the IRS have not yet provided advice on how they will manage prepayments to parents in split custody arrangements, CNBC said.
How other fitness changes affect your stimulus control
Thewhat does that mean The checks come with a so that if you earn more than a certain amount – say, $ 120,000 as a householder – it wouldn’t be even if you have several dependents. The date , and when the IRS processes that payment, it can also play a major role in whether or not a full or partial payment is received, or perhaps none.
For more, here’s everything you need to know for maximum and how