If you have dependent children 16 or younger, your coronavirus stimulus check was supposed to include an extra $500 per child.
But an untold number of parents have found that their checks were missing the $500 child credits. So what gives here? Did the IRS just forget about your kid?
6 Reasons Your Stimulus Check Didn’t Include $500 Child Credit
There are a few explanations for why the IRS could have processed your check without giving you the credit for your child. Unfortunately, there are no quick fixes here.
1. The IRS Used Your 2018 Return and Your Child Was Born in 2019
The IRS used either your 2018 or 2019 tax return to process your stimulus check. If they took your 2018 return and your child was born in 2019, they wouldn’t have had your child’s information on file, so your check would be short by $500.
Some parents have reported that their stimulus check was based on their 2018 taxes, even though they’d already filed for 2019.
The solution: The stimulus checks are an advance on a 2020 tax credit. They were calculated based on 2018 or 2019 tax information so that the payments could go out right away. You’ll still qualify for the $500 credit, but for now the IRS says the only option is to wait until you file your 2020 taxes next year to receive it.
2. Your Child Was Born in 2020
If you’re the parent of a child born any time in 2020, you’ll be eligible for the extra $500 payment. But because the payments are based on past tax returns, your stimulus check didn’t include the payment for your newborn or yet-to-be-born child.
The solution: Claim the credit when you file your 2020 tax return next year.
3. Your Child Is Ineligible Because They’re Too Old
You’ll receive the $500 child stimulus credits only for children ages 16 and younger. Dependent children ages 17 to 23 don’t qualify for the extra $500 credit. And anyone who can be claimed as a dependent isn’t eligible for a $1,200 check of their own.
The solution: Sorry, but there isn’t one here. The silver lining: If you claimed your child as a dependent in 2019, but they’re no longer a dependent in 2020 — say, they graduated and got a job — they could be eligible for a $1,200 payment with their 2020 tax refund.
4. Someone Else Claimed Your Child as a Dependent
If you aren’t married to your child’s other parent, only one of you is eligible to claim the child as a dependent for tax purposes in a given year. Typically, it’s the custodial parent. But some parents who share custody and take turns claiming a child on their returns have found that their check was short if it was based on the year that the other parent claimed them.
The solution: You may still be eligible for the $500 credit if 2020 is your year to claim your child on your taxes — even if your child’s other parent already got the $500 credit for them. The IRS says in its Economic Impact Payments FAQ (see question 34) that if two parents receive $500 for the same child, neither one is required to return it.
5. You Receive Social Security, SSI or Other Government Benefits
If you receive certain government benefits, like Social Security, SSI or VA disability, the IRS was able to take your information directly from the appropriate agency to determine that you were eligible for your $1,200 payment.
But it didn’t automatically receive information about your dependents. You had to submit their information using the non-filer tool at IRS.gov.
But the IRS waited until April 20 to tell Social Security recipients they needed to submit their dependents’ info by April 22 to get the credits with their stimulus check. SSI and VA benefit recipients had until May 5. Still, even some parents who used the non-filer tool before the deadline have reported they didn’t receive their $500 credits.
The solution: There’s nothing you can do immediately, but you can get the credit next year if you file a 2020 tax return — which you can do even if you aren’t required to file.
6. The IRS Screwed up
The IRS moved at warp speed to process these payments. More than 150 million have been processed, with 89 million of those payments made about three weeks after the CARES Act passed. So it isn’t surprising that there have been errors — and missing $500 child credits have been among the most common complaints.
The solution: You guessed it: Wait until next year and file a 2020 return.
Robin Hartill is a certified financial planner and a senior editor at Codetic. She writes the Dear Penny personal finance advice column. Send your tricky money questions to [email protected]