The year 2020 was a challenging one. For new parents, it was also a very exciting one. If you welcomed a baby during 2020, you may be eligible for stimulus money. Here’s what you need to know about this generous stimulus offering and how a tax preparation professional in Hayward, CA can help you take advantage of it.
With the 2021 stimulus bill—the Coronavirus Aid, Relief and Economic Security (CARES) Act—signed into law, eligible Americans received third stimulus checks. Some people are still waiting for their first or second checks, though, and among those are new parents. Those who welcomed a new bundle of joy into the world may be eligible to receive stimulus money for their dependent child born in 2020.
How do I know if my baby is eligible for a stimulus payment?
There are eligibility requirements that you must meet in order for your child born in 2020 to receive stimulus money. Your baby could receive up to $1,100 in two rounds of stimulus checks. The first round of spring stimulus offered families $500 per eligible child. The second round increased that amount to $600.
To receive the stimulus money, you must be a single filer with an income below $75,000, a head of household with income below $112,500 or a married couple filing joint tax returns with an income limit of $150,000. Children of parents who earn more than these amounts can still receive stimulus money, too, but it’s reduced by $5 for every $100 of income that exceeds the limits. Children of individuals making $99,000 or more or married couples making $198,000 or more are ineligible.
How does my baby receive a stimulus payment?
Not all parents will receive the dependent stimulus payment, whether as direct deposit or a check in the mail. Don’t worry—as long as you meet income eligibility requirements, your child still receives stimulus money, but you’ll have to complete one extra step to receive it. You’ll need to file a tax return and get the money your child is owed as a recovery rebate credit from the IRS.
It’s recommended that you work with a professional tax preparation service in Hayward, CA to ensure you’re filing the right way to receive this payment. You’ll fill out a Recovery Rebate Credit Worksheet in the 2020 Form 1040 and Form 1040-SR to find out how much you can claim for your credit. If you want to get the rebate as soon as possible, your best bet is to file electronically and receive the credit as a direct deposit to your bank account. Always have your tax preparation professional check over your work to ensure the numbers are correct.
It’s best to seek advice from a tax preparation professional in Hayward, CA if you think you might be eligible for economic stimulus money when you file your tax return. Reach out to Menjivar & Company CPAs, Inc. to ensure you and your dependents, including any babies born in 2020, receive the stimulus money you deserve.
Categorised in: Tax Preparation