Millions of Americans are stillfrom the first and second checks. Among them are the parents of children born or adopted between Jan. 1 and Dec. 31, 2020. While the the details of the American Rescue Plan (President Joe Biden’s , which includes a maxing out at per person), of 2020 babies have another potential to look forward to, a monetary bundle of joy to the tune of $1,100.
Why the sudden windfall? Since the first and second stimulus checks were based on your most recent tax return, anyborn or adopted after filing were not included in stimulus eligibility, because they weren’t “known” to the IRS at the time those checks were cut. (This means some parents of 2019 babies should expect additional stimulus money, too, if they didn’t file a 2019 return in time — more below on how to claim it.)
This bonus stimulus money is in addition to the usualand , not to mention the amount your new baby could qualify for in a third round of stimulus payments. We’ll tell you what you need to know and how to claim your missing money. And here’s how to and .
How much extra stimulus money can parents of 2020 babies expect to receive?
Congress is currently ironing out plans for a, which would grant parents a maximum of . But parents of babies born in 2020 are actually eligible for more than just this — an extra $1,100 could be coming your way even before the if you met all the requirements for the first two stimulus checks. ( .)
The, which began hitting mailboxes and bank accounts last April, maxed out at $500 per qualifying dependent, while the , sent in December, had a $600 cap. That equals $1,100 if you had a dependent.
Assuming you met eligibility requirements for full benefits from both checks, couples filing jointly with one dependent child would be entitled to $1,200 each from the first check, plus $500 for your child, and $600 each from the second check, plus another $600 for your child, totaling $4,700 maximum when you add up both checks.
But for 2020 babies, the total received was probably only $3,600 (assuming you’re notfor other reasons), a shortfall of $1,100 for your new baby — $500 from check No. 1, and $600 from check No. 2. But you can still claim that money retroactively by (more below).
Parents of 2020 babies should file their tax returns ASAP
There’s a simple way to recoup missing stimulus money for qualified dependents — any missing stimulus money, actually:. In fact, your is the mechanism for updating anything that has changed in your stimulus eligibility since the passing of the CARES Act. That’s because once your 2020 return is on file, the IRS will use your new information to process future stimulus benefits. You can also when you file your return if you haven’t already, to ensure you .
How to claim missing dependent stimulus money when you file taxes
Before you prepare your 2020 tax return, you need toand . Any discrepancies between the two numbers can be claimed through the on your return. (That is, unless you received more than you were owed. .)
If your missing stimulus money is the result of an IRS error or other mistake,. But if you merely need to claim a new dependent, the Recovery Rebate Credit is what you’re looking for.
What about a third stimulus check for your dependents?
If you file your 2020 tax return, your 2020 baby will be included as a qualifying dependent, and you’ll receive your full benefits as soon as the IRS begins sending them. As the bill stands now, a third check would have a cap of and another $1,400 per qualifying dependent — and this time around, the to include dependents of all ages.
What happens if you don’t file before the? You’ll still be able to claim the Recovery Rebate Credit to recoup payments from the first and second stimulus checks, but your dependent benefits for the third check will have to be claimed on your 2021 tax return, when you file next year. (Here are , and .)
All the other dependent benefits you should know about
You’re likely already aware of the, which currently grants taxpayers an extra $2,000 per child. But in the current version of the American Rescue Plan, this credit is expanded to $3,600 per child under 6 years old, and $3,000 per child up to age 17. The bill also proposes expanded tax credits for child care, potentially totaling $4,000 for one child or $8,000 for two or more children. .
I received stimulus money for my 2020 baby — what do I do now?
If you find yourself in the fortunate position of not needing to use your stimulus check money to meet household expenses, it’s never too early to start thinking about your child’s future education. You can set up ain your child’s name, and it’ll grow tax-free (just like a Roth IRA) as long as it’s eventually used for qualifying education expenses. .