In 2020, lawmakers signed two coronavirus relief bills into law that provided stimulus checks for most Americans. The first payment was worth $1,200 per adult and $500 per eligible dependent, and the second was worth $600 per eligible adult and dependent.
The majority of qualifying individuals had their payments deposited into their bank account or mailed to them already. However, some people have yet to receive their checks. And recent college graduates were among those most likely to still be missing out on the payments they may be entitled to.
But the good news is the IRS has now begun accepting tax returns for 2020. And if you’re a recent grad who didn’t get your payments last year, you may want to think about submitting a return ASAP to claim yours.
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Here’s why many recent grads didn’t receive a stimulus check
For both of the last two rounds of stimulus checks, payments were available for adults and for child dependents under the age of 17. Unfortunately, anyone who was claimed as a dependent on someone else’s return wasn’t eligible for a check of their own. As a result, many college students were ineligible.
However, when the IRS determined who was eligible for stimulus payments, it used either 2018 or 2019 tax return data. Since it was working off outdated information, many recent college graduates who are no longer dependents as of 2020 were deprived of stimulus payments they were entitled to. The IRS thought they were still dependents based on their parents’ old returns, but they were adult dependents so no money was sent for them.
Recent grads should submit their returns to the IRS
For anyone who was claimed as a dependent in the past but who won’t be classified as a dependent in 2020, it’s important to submit a tax return to the IRS. Submitting a 2020 return will make it possible to claim a stimulus payment because the money was an advance on a tax credit. By filing a return and showing you were eligible for the credit but didn’t receive it, you can claim the stimulus funds you’re due.
The IRS began accepting returns for the 2020 tax year on Feb. 12, so those who want to obtain their stimulus funds can now send in their forms to do so. And you may want to act ASAP, both to get the earlier payments quickly and to make sure you correctly receive the third stimulus payment that is currently working its way through Congress.
While adult dependents are expected to be eligible for the full amount of the upcoming $1,400 payment, recent grads may not want their payment going to their parents. And if parents or guardians file first and aren’t claiming their graduated children as dependents this year, they wouldn’t receive the dependent funds, anyway. Basically, the IRS needs to know where to send this money to the new grads who are no longer dependents and who are eligible for the cash.
The three stimulus checks combined will provide a substantial sum that could come in handy for a new grad struggling during the pandemic. So it’s worth taking the time to get your paperwork in to the IRS.
View more information: https://www.fool.com/the-ascent/personal-finance/articles/recent-grad-you-may-be-able-to-claim-your-stimulus-checks-by-filing-taxes/