This article was last updated on January 14
Under the two main COVID relief stimulus packages passed last year, there were two separate payments of $500 and $600 for qualifying dependents under the age of seventeen at the end of 2020. The IRS was making this payment automatically based on 2019 tax returns for the $600 second dependent payment and 2018 or 2019 returns for the first $500 payment. Non-filers could add dependents on a special IRS website for the first payment, but for the vast majority of Americans dependent information was pulled from 2018 or 2019 tax returns, whichever was the latest. As a result if you had a child (born or adopted) in 2020, you wouldn’t have them as dependents in your 2019 return since you can only prepare and file your 2020 return in 2021.
How to Claim This Payment
The easiest way to claim this payment is when you file your 2020 return in the coming months. There will be a section to claim any 2020 dependent stimulus (or your adult stimulus payment if that was missing) as a recovery rebate credit on a 2020 Form 1040 or Form 1040-SR. My recommendation is to use leading tax software packages like Turbo Tax or Tax Act to file your return as they have automatic eligibility calculations and step-by-step guides on claiming 2020 stimulus payments that were not automatically paid to you by the IRS.
You will however need to be aware of the qualifying income (AGI) thresholds for claiming these stimulus payments. If you made below the lower threshold you can get the entire stimulus payment. However the amount phases out until you reach the maximum income threshold. The upper income threshold was lower for the second ($600) payment so there are instances were some families may have qualified for part of first payment, but not the second. You can see more in this article on the 2020 dependent stimulus and I have put both the income qualification thresholds below for your reference.
$600 Second Dependent Stimulus Qualifying Thresholds
|Income Below Which FULL Dependent Stimulus is Paid (Lower Threshold)||Max Income To Qualify for Stimulus (no kids)||Max Income to Qualify with 1 Child|
|Single or married filing separate||$75,000||$87,000||$99,000|
|Head of household||$112,500||$124,500||$136,500|
|Married filing jointly||$150,000||$174,000||$186,000|
$500 Original/Dependent Stimulus Qualifying Thresholds
|Filing Status||Income Below Which FULL Dependent Stimulus is Paid||Max Income To Qualify for Stimulus (no kids)||Max Income to Qualify with 1 Child|
|Single or married filing separate||$75,000||$99,000||$109,000|
|Head of household||$112,500||$136,500||$146,500|
|Married filing jointly||$150,000||$198,000||$208,000|
Many parents didn’t realize this dependent stimulus payment would cover children born (or adopted) this year so the $1,100 could be a nice bonus and make for a larger tax refund in 2021. You can see more in this video covering this topic.