CARES Act for College Students and Other Adult Dependents

Del YounglasCOVID-19, Featured News

Featured News

By: Amina Y. Doleh, Staff Tax Accountant

As many people eagerly wait for their advance recovery rebate (stimulus checks), some people have been left out of receiving them. Anyone aged 17 and older who can be claimed as a dependent cannot receive one, and the people claiming them do not receive additional payments for them either.

To understand why, we first need to understand what qualifies someone as a dependent. There are two main type of dependents: qualifying child and qualifying relative. The CARES Act requires that the dependent is a qualifying child. The requirements for a qualifying child are as follows:

  • They must be related to the person claiming them
  • They are either under the age of 19 or a full-time student under 24 (this is replaced with a less than $4,200 income requirement for qualifying relatives)
  • At least half of their financial support is made by the person claiming them; and
  • They live with the person claiming them for at least half the year

A qualifying child under the CARES Act must also meet the requirements to be eligible for the Child Tax Credit. There are two main differences between these rules and the rules above:

  • They must be a U.S. citizen, U.S. national, or U.S. resident alien; and
  • They must be under the age of 17

This is where problems start to arise. Someone who claims a child or relative over the age of 17 will not receive an additional $500 payment for that dependent as they are not a qualifying child.

Can the dependent receive a $1,200 stimulus check? No, because an eligible individual as defined by the CARES Act is “any individual other than a nonresident alien or an individual for whom a dependency deduction is allowable to another taxpayer for the tax year.”

If the individual supports themselves, they do not qualify as a dependent, and they should be able to receive a stimulus check without issue.

If a dependent in this situation is not claimed by someone on their return, can they receive a stimulus check? The main consensus is no, as the individual still qualifies as a dependent whether they are claimed or not, so they should still be checking the box that they can be claimed as a dependent.

Fortunately, lawmakers are looking into rectifying the situation. There is support of extending the $500 payments to include dependents 17 years of age and older by several U.S. senators. However, this may not be passed for several months or until next year. Until then, these dependents are stuck in a middle ground where neither they nor the people claiming them can receive a benefit.

For more information, contact Amina at adoleh@maloneynovotny.com or any of our Maloney + Novotny team members, or use this online contact form.

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