CORONAVIRUS STIMULUS CHECKS

Third stimulus check: can college students request payment?

The American Rescue Plan allows adult dependents to get stimulus checks for the first time, and some may even be able to receive retroactive payments for previous rounds.

Third stimulus check: can college students request payment?
MANDEL NGAN AFP

Talks in Congress are progressing as lawmakers attempt to get President Joe Biden’s covid-19 relief bill passed in the coming days. The bill, known as the American Rescue Plan, includes $1.9 trillion worth of federal funding and is designed at supporting those who are worst-hit by the pandemic.

As such much of the package focuses on providing immediate financial relief, through the form of unemployment benefits and stimulus checks. The latter was a prominent feature of previous bills and Biden has reaffirmed his commitment to a round of $1,400 payments.

However it seems that the eligibility requirements may well be different for this wave of payments, with Biden looking to open them up to more Americans. For the first time, adult dependents will be able to receive the stimulus checks, broadening eligibility to an estimated 13.5 million college students.

College students now able to receive stimulus checks

For the first time, college students classed as adult dependents will now be eligible for stimulus checks but they will not be able to receive them personally. Adult dependents are those who are cited on another tax payer’s return.

This means that the payment will be added to the other party’s stimulus check entitlement, most likely their parent’s in the case of a college student. Households can therefore expect to receive significantly more in the next round of payments.

As it stands it is thought that the threshold for eligibility will remain the same as previous rounds, but with some slight adjustments. The full amount will be available for individuals earning up to $75,000 per year, or $150,000 for couples who file jointly. However once your adjusted gross income (AGI) exceeds those amounts the stimulus check entitlement phases out more abruptly than in the past. Single taxpayers earning over $87,000 will not be eligible for any stimulus check payments.

Can college students receive stimulus checks for previous rounds of payments?

The subject of retroactive stimulus checks has been discussed in relation to the American Rescue Plan but, for now, it seems that they will be no widespread payback of historic stimulus checks. However, as the AGI figure used to calculate stimulus check entitlement is based on tax returns you are able to claim the money if you become financially independent.

Students who finished college last year may well have become financially independent during 2020, meaning that their status will have altered by the time they file their tax return in spring 2021. This change in situation would make them eligible for payment and Janet Holtzblatt of the Urban-Brookings Tax Policy Center says this will allow them to pick up previous checks.

When you come to file your tax return for 2020 you should be able to claim the missing money as a Recovery Rebate Credit, allowing you to receive both the initial $1,200 stimulus check payment and the more recent $600 that was distributed in January.

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