Had a baby in 2020? Congratulations on the new addition to your family! You could be celebrating even more great news as the wait is finally over for your dependent stimulus money!
Parents of children born or adopted between January 1 and December 31, 2020, may be eligible for up to $1,100 in extra stimulus money if they meet certain income thresholds and have not previously received any money for that child, MSN reported via The Motley Fool. As the IRS used 2019 and in certain cases 2018 returns to calculate the previous rounds of stimulus, 2020 babies would not have been counted as dependents.
Recovery Rebate Credit
So long as there is income eligibility, parents of 2020 babies and those who have adopted last year will receive a Recovery Rebate Credit under the CARES Act of $1,100 ($500 for the first round of stimulus payments last spring and $600 for the second this winter) upon filing their 2020 tax return. According to the IRS, the Recovery Rebate Credit generally speaking “…will increase the amount of your tax refund or decrease the amount of tax that you owe.” Sounds good to me!
Same income limits apply
Same as the last round of stimulus, the adjusted gross income limits follow:
-$75,000 for single filers
-$112,500 for heads of households
-$150,000 for married filing jointly
For parents whose income surpasses the limit, the rebate will be reduced by $0.05 for every $1 over, phasing out at $99,000 for individuals and $198,000 for married couples filing jointly.
How to claim your stimulus money
Claiming your money is easy. If your adjusted gross income falls within the limits and your family has welcomed a baby between January 1 and December 31, 2020, simply file your 2020 tax return and claim your Recovery Rebate Credit using 2020 Form 1040 or Form 1040-SR.
For additional information, check out the IRS’s Recovery Rebate Credit page or ask your tax preparer for more details.