After a whirlwind series of negotiations, thewas finally and have (here's how to and ). In the meantime, millions of Americans have their . Among them are new parents, specifically those who welcomed a child in 2020.
While there are many reasons your stimulus check might have gone missing (not to mentionand a that has made many Americans ), the missing checks for 2020 babies, totaling $1,100 for some families, have a simple explanation.
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.) This bonus stimulus money is in addition to the expanded and , 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.
How much extra stimulus money can parents of 2020 babies expect to receive?
Thewill 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 if you don't qualify for the third check, as long as 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?
The third round of stimulus payments included an additional $1,400 for each qualifying dependent -- andto include dependents of all ages. But by now if you haven't filed your 2020 return yet, it is likely too late to get a third check for 2020 babies. The IRS has already begun sending checks, so you may have to wait until you file your 2021 return next year to claim that money retroactively.
You'll still be able to claim the Recovery Rebate Credit to recoup payments from the first and second stimulus checks, however, but your dependent benefits for the third check will have to wait, unfortunately. (Here are, and .)
All the other dependent benefits you should know about
You're likely already aware of the, which previously granted taxpayers an extra $2,000 per child. But did you know that in the American Rescue Plan, this credit has been expanded to $3,600 per child under 6 years old, and $3,000 per child up to age 17? The bill also includes expanded tax credits for child care and other dependent benefits. .
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. .