Child support and third stimulus check: We’ll clear up the confusing details
For parents who share custody of their children, child support can complicate their lives.and . To add to this, the rules of have changed removing a loophole that allowed some families to “double deduct” (both parents receiving their own dependent payment for the same child), among other major changes.
However, there is good news for Center report on budget and policy priorities. It’s above for eligible persons and the new bill which leads many families to receive more money this time.. The includes a large extension to that could reduce child poverty by 40%, according to a
Here are the details we have so far, including, and what if your . (Also, could there be a ?) Read on as we sort through and explain the complicated details about child support situations and stimulus checks.
Is the loophole for joint custody and stimulus checks closed for the third payment?
Many parents who are unmarried and share joint custody of their children actually received two payments for the same child in the first round of stimulus checks, if they alternated years claiming those children on their taxes. That is, if one parent claimed a child in an even year and the other in an odd year, both could receive 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 at 2019 tax returns, but that doesn’t mean the double dip loophole has been fully closed. If you are a parent in a joint custody scenario like the one above and generally claim one dependent child in odd tax years, you may be able to get a $600 double dependent child payment inasmuch asand claim the child on your tax return, just as you would if you didn’t receive a second stimulus check when you were eligible.
This loophole could be closed in the new stimulus bill that allows the third check. According Andy Phillipsdirector at The Tax Institute at H&R blockparents who are not married to each other and who alternate custody of an eligible dependent may not both be eligible to receive stimulus money for the same dependent this time -this.
Phillips said that due to guidelines Congress has included in the new law, “it is possible that if an advance payment is received by a relative for the dependent, no further payment may be made for the same person. dependent on the declaration of the other parent (by claiming reimbursement The credit).” Phillips said the Treasury Department should issue guidance on this situation, but at this time, that hasn’t happened yet.
How is child support related to the third stimulus payment?
With the third check, if you are behind on child support, you can still receive your full stimulus payment. This. This is true for all overdue federal or state debt: your third payment is not subject to reduction or set-off. 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 claim it as when you file your taxes. A independent taxpayer advocacy group within the IRS is working with the agency to resolve this issue.
New dependent guidelines open up eligibility for third stimulus payment
What to know about the 2021 child tax credit
The CNBC, parents of dependent children can use the same even/odd tax filing method to both receive payments. The U.S. Treasury and the IRS have yet to provide guidance on how they will administer advance payments to parents under shared custody arrangements, CNBC said.until to taxpayers . According
How other eligibility changes affect your stimulus check
Thewhich means that . The checks are accompanied by a so that if you earn more than a certain amount — say, $120,000 as the 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 receive full or partial payment, or possibly none.
For moreHere is everything you need to know until and how .