If You Had a Baby in 2020, You Can Get $1,100 of Stimulus Money

If you’re the proud new parent of a 2020 baby, here’s some good news to get you through those sleepless nights: Your 2020 bundle of joy qualifies you for a sweet bundle of stimulus cash — $1,100 to be exact.

Why Do New Parents Get an Extra $1,100?

The first stimulus check gave parents an extra $500 for each child age 16 and younger on top of the $1,200 for most adults. The second stimulus check provided families with $600 for each adult and dependent child 16 or younger. So between the two checks, parents generally got $1,100 per kid.

Both checks were an advance on a 2020 tax credit that were processed using 2018 or 2019 returns. But the IRS won’t know about any of the babies welcomed into the world in 2020 until you file a tax return.

When you file your 2020 taxes, you can receive the $1,100 as a Rebate Recovery Credit. That just means you’ll get the extra money as a tax refund. That’s on top of the $2,000 child tax credit parents who are single filers with incomes under $200,000 or joint filers with incomes under $400,000 qualify for.

What Are the Income Limits?

For both stimulus checks, the income limits to receive the full stimulus payments were:

  • $75,000 for single filers
  • $112,500 for heads of households
  • $150,000 for married couples filing a joint return

Checks phased out at 5 cents on the dollar for every dollar of income above these thresholds. For a more detailed explanation of how the phaseout works for child credits, check out Question 7 of our child stimulus credit FAQ.

Do I Get $1,100 if I Adopted in 2020?

You should qualify for an $1,100 stimulus payment for your family’s new addition as long as the child you adopted was 16 or younger at the end of 2020. The same rules apply: File your tax return to get the money as a refund.

What if I’m Not Married to My Child’s Other Parent?

The parent who’s claiming the child as a dependent for tax purposes receives the money.

I Didn’t Get the Money for My 2019 Baby. What Gives?

A lot of parents were frustrated to discover that their stimulus checks didn’t include the child credits — particularly in the first round, when many payments were processed using 2018 returns. If the IRS used your 2018 tax information, you wouldn’t have received a payment for a child born in 2019.

The solution is the same, though: File a tax return. If you file taxes online and provide your direct deposit information, you can expect to get that $1,100 of stimulus money within about three weeks.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected]

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Source: thepennyhoarder.com

When Can You File Your Taxes This Year? (Hint: It’s Very Soon)

The sooner you file your tax return, the sooner you’ll receive any refund due (and, this year, you might also boost your next stimulus check). That’s why some people like to file their return as early as possible. But this year, the IRS won’t start accepting 2020 tax returns until February 12, 2021. While we’re almost there, that’s still 16 days later than last year.

Why the delay? According to the IRS, the later filing season start date allows them time to do additional programming and testing of their systems following the December tax law changes that provided a second round of stimulus checks and other benefits. If filing season were opened without the correct programming in place, then there could be a delay in issuing refunds to taxpayers.

If you have a federal tax refund coming, you could get your money back in as little as three weeks. In the past, the IRS has issued over 90% of refunds in less than 21 days. If you want to speed up the refund process, e-file your 2020 tax return and select the direct deposit payment method. That’s the fastest way. Paper returns and checks slow things down considerable.

However, don’t expect your refund before the first week of March if you claim the earned income tax credit or the additional child tax credit. By law, refunds for returns claiming these credits must be delayed. This applies to the entire refund, not just the portion associated with the credits.

If you’re not going to file your return right away (e.g., to increase your third stimulus check), just make sure you file before the April 15 deadline.

Source: kiplinger.com

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