Stimulus Checks for Young People
Many people between the ages of 17 and 24 have become aware they will not receive a stimulus check this spring. There are a few explanations as to why. The most likely reason is many people in this age group are claimed as dependents. Persons claimed as dependents for the 2019 Tax Year are not eligible for the Economic Impact Payment commonly referred to as the “Stimulus Check.”
This is an unfortunate circumstance for many young adults who have recently graduated from college and become financially independent in 2020, as $1,200 would have been a welcome financial buffer in the current economic climate. To add to the frustration, taxpayers claiming dependents are only eligible to receive the additional $500 for Qualifying Children aged 16 and under. This again excludes dependents claimed who are 17-24 years old.
However, individuals who missed out on receiving a stimulus check this spring may still be eligible to receive stimulus money in 2021. If an individual cannot be claimed as a dependent for tax year 2020 and did not receive a stimulus check in 2020, then this individual can receive their stimulus money as a credit on their 2020 tax return.
Additionally, children who were born, adopted, or placed in foster care in 2020 will not be included in an additional amount, because the payment is based on 2019 or 2018 tax returns. A parent may claim the child next year for an additional credit on your 2020 tax return.
Finally, there are no provisions in the law requiring repayment of these stimulus checks. For example, if a 16-year-old child turns 17 in 2020, the additional $500 credit will not have to be repaid.
For more information on frequently asked questions regarding the Economic Impact Payment and other forms of Coronavirus Tax Relief, visit the link below or contact your KerberRose trusted advisor.
Link to IRS Website FAQs: