Taxing Questions by David Zubler
Some people may receive a stimulus amount different than they expected. Payment amounts vary based on income, filing status, and the number of dependents who qualify for additional stimulus.
Only children eligible for the Child Tax Credit qualify for the additional payment of up to $500 per child. The child must also be under the age of 17 at the end of the year for the tax return on which the IRS bases the payment determination.
A qualifying child must have a valid Social Security Number (SSN) or an Adoption Taxpayer Identification Number (ATIN).
Parents who are not married to each other and do not file a joint return cannot both claim their qualifying child as a dependent. The parent who claimed their child on their 2019 return may have received an additional $500 for their qualifying child. When the parent who did not receive an additional payment files their 2020 tax return next year, they may be able to claim up to an additional $500 per-child amount on that return if they qualify to claim the child as their qualifying child for 2020.
If the IRS has not yet processed your 2019 return it will use the 2018 return information to calculate your stimulus. Remember, the IRS accepting a tax return electronically is different than completing processing; any issues with the 2019 return mean the IRS would’ve used the 2018 filing. The 2018 return may have higher or lower income and would not include the birth or adoption of a child in 2019.
In many cases, however, these taxpayers may be able to claim an additional amount on the 2020 tax return when they file next year. This could include up to an additional $500 for each qualifying child not reflected in their stimulus.
The stimulus is offset only by past-due child support. The Bureau of the Fiscal Service will send the taxpayer a notice if an offset occurs.
For taxpayers who are married filing jointly and filed an injured spouse claim with their tax return, half of the total payment will be sent to each spouse. Only the payment of the spouse who owes past-due child support should be offset.
If you filed an injured spouse claim with your return and are impacted by this issue, you do not need to take any action. The injured spouse will receive their unpaid half of the total payment when the issue is resolved.
The stimulus is not protected from garnishment by creditors by federal law once the proceeds are deposited into a taxpayer’s bank account.
In many instances, eligible taxpayers who received a smaller-than-expected stimulus may qualify to receive an additional amount early next year when they file their 2020 federal income tax return.
The stimulus is technically an advance payment of a new temporary tax credit that eligible taxpayers can claim on their 2020 return. Everyone should keep the letter they receive by mail within a few weeks after their payment is issued.
David Zubler is a tax accountant in East Tennessee, author of four tax books, and a philanthropist. Proceeds from the books go to a charitable foundation he created for underprivileged children. He is founder of Your Tax Care, which provides tax education and rescues people with IRS problems. David can be reached for questions and consultation at yourtaxcare.com.