Stimulus checks and child support: Everything you need to know today

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The rules changed with a second check, but what about a third?


Angela Lang/CNET

The second stimulus check has passed, and a third payment may well be ahead. There’s a lot to know in this in-between space, including the current situations with stimulus money that may or may not be garnished if one party owes child support. There’s also a loophole in the law that could help you, and one that could hurt you — and some potential changes to dependent status for a third stimulus check, if it’s approved as part of a COVID-19 package as soon as next month.

Also, if you’re one of the parents who didn’t receive the money, you may have to wait until you file taxes before receiving a catch-up payment. Keep reading for the full explanation.

One thing that didn’t change in the eligibility rules for the second stimulus check is the definition of a child dependent as 16 years old or under (this may change with the next stimulus check). However, the December bill authorized payments of $600 for each child as part of the household’s total, $100 more than you got last March. So how would you and your child’s other parent both get money for the same kid, and what if you didn’t get as much as you think you should? We’ll explain. This story was updated with new information.

Can both parents to get a $600 check per child if they have joint custody?

Many parents who aren’t married and share joint custody of their children actually received two payments for the same child during the first round of stimulus checks, if they alternated claiming those children on their taxes every other year. 

Basically, if one parent claimed a child in even years and the other in odd years, both could’ve gotten checks for the same 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 to 2019 tax returns, but that doesn’t mean the double-dipping loophole has been closed entirely. If you’re a parent in a joint custody scenario like the one above and you typically claim a dependent child in odd-numbered tax years, you may be able to get a duplicate $600 child dependent payment as a tax credit when you file and claim the child on your 2019 tax return, similar to what you’d do if you did not receive a second stimulus check despite being eligible for one.


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Stimulus check No. 3: What you need to know



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The second stimulus check specifically addresses overdue child support, but the IRS may still be able to redirect your payment

Unlike the CARES Act, which made it legal for states to garnish the first stimulus check for people who owed more than $150 in arrears, a rule for the second check indicates that parents can keep the entirety of their payment even if they owe child support. In fact, the latest bill prohibits seizing stimulus payments the IRS sent out by Jan. 15 for most kinds of debt, including from private creditors and banks.

However, if you have not received all or part of a payment yet from the IRS and intend to claim it when you file your taxes this year, the IRS can redirect that payment to cover past-due child support, unpaid student loans and other federal and state liabilities. The IRS said is it aware of the loophole and is “looking into this issue.”

The change to garnishment is a big deal for this reason, too

When the first stimulus checks were garnished to pay past-due child support, sometimes clerical errors also took stimulus money allocated to a (new) spouse who was not the child’s other parent. Stopping all seizures of stimulus check money means that these individuals would not have to reclaim their full second stimulus check funds with the IRS. Here’s how they’ll need to claim money mistakenly garnished from their first payment.

How a change in dependent status could affect the next stimulus payment

The third stimulus check could make dependents of all ages count toward the family total. We don’t know if that figure will be another $500 or $600 per dependent, or some other sum. But we do know that for the subset of families with children who are 17 (or 18, but living at home and still in high school, depending on your local rules), a move to accept dependents of all ages could benefit families the qualify, including those in child support scenarios.

How other qualification changes could affect your stimulus check

Ultimately, your situation could change between the second check and the first, including your eligibility. There’s talk of making the next stimulus payment “targeted,” with the end result of fewer people qualifying overall. It’s possible that if you got a second check and the rules change, you may not qualify for a new stimulus check. We’ll keep updating this story with new information as the situation develops.

For more stimulus check details, here’s how to calculate your second stimulus check total and here’s what we know now about a third stimulus check for up to $1,400 per person.

source: cnet.com