The Next Round of Economic Impact Payments
The pandemic has taken a financial toll on many families in Oregon. Many people have lost their jobs entirely, lost hours, or taken pay cuts at the jobs they kept. The federal government is aware of the struggles people face and has already taken steps to help with two rounds of economic impact payments so far.
However, many people rightfully argue that the $1800 total per adult that has been distributed is not enough for the American people. The House of Representatives is currently outlining a new stimulus package that might lead to an additional $1400 stimulus check for most US adults. The question is simple: who will actually be eligible to receive the money?
The past two stimulus checks were subject to some significant differences in eligibility. Parents and families, in particular, were treated differently by the two packages. Here’s a breakdown of how the past checks took child custody and parental status into account and the next stimulus bill’s current status.
The Structure of the Last Stimulus Checks
The first stimulus package, the CARES Act, was a relatively rushed deal. It was pushed through when the COVID-19 pandemic was still young and poorly understood. As a result, the rollout saw difficulties, especially with the extra $500 per child parents were supposed to receive.
Parents who owed child support often didn’t see the money at all, as the IRS was allowed to garnish the funds to pay owed debts. Furthermore, the additional $500 per child only went to the custodial parents of children who were 16 years or younger. The result was a “donut hole,” where dependents between the ages of 17 and 24 received no money, whether or not they were legally an adult.
One benefit of the CARES Act payments was that both parents who shared custody of their children received the $500 for each kid. However, since joint custody is rare in Oregon, many local parents didn’t see this bonus.
Unlike the CARES Act funds, the second round of “Economic Impact Payments” was not subject to garnishment for child support. Instead, these $600 payments went directly to the people to be used as they deemed fit.
This round of checks also gave a full $600 to all children under the age of 17. The “donut hole” for people between the ages of 17 and 24 was still in effect, so many young adults who were claimed on their parents’ taxes receive no money. Furthermore, the joint custody loophole leading to both parents receiving money for their children was still in effect but didn’t affect most Oregon families.
Both bills phased out payments at higher income levels. Single individuals who made more than $87,000 and heads of households who made more than $124,500 in 2019 received no money in the second round of checks. Single parents with children are the primary demographic to file as a head of household, while single parents without custody file as single.
Regardless of the income cap, custody of children 16 and under still made parents eligible for the dependent funds. However, only three dependents were eligible for the extra funds.
Obviously, families with older children and unmarried parents saw the most complicated payments. While the next set of stimulus checks is not yet set in stone, it currently appears like the federal government is working to learn from the precious bills’ failures.
Potential Changes to Upcoming Stimulus Checks
It’s impossible to state anything concrete about the next stimulus payments because they haven’t been officially released yet. However, the current bill being workshopped in the House has some changes that look like good news for parents, custodial and non-custodial alike.
Currently, the potential changes could include:
- Higher payments: This new act looks like it will offer up to $1400 for adults, with an addition $1400 per dependent, with no limit on the number of dependents. A single parent of four may receive up to $7000 under this bill.
- Lower income caps: Single people may stop receiving checks at $78,000 in income, while heads of households phase out at $103,000.
- No garnishment: As with the second round of payments, the third round does not appear at risk of garnishment.
- No dependent donut hole: Finally, and most importantly for parents of older children, it appears that the gap in funds for 17 to 24-year-olds will be closed. If you have claimed a child 23 and younger on your taxes, you will likely be eligible to receive those funds. Meanwhile, your children 24 and older will be able to receive their own checks.
How to Prepare for the Next Round of Support
There are two ways you can begin preparing for the next set of economic support payments. First, it’s a new year, so you’re able to file your taxes again. If you made significantly less in 2020 than 2019, or if you have gotten a divorce in that time, your tax status has likely changed dramatically. Whether or not you were eligible for the first round of payments, if your income has dropped below the threshold for your filing status, filing your taxes for 2020 may help you receive the new checks.
Second, if you’ve been considering finding help to get joint or sole custody of your children, now is the time. The increased payment for dependents could double the amount you receive in the next round of checks. That can make all the difference when it comes to helping your children thrive despite the pandemic.
Your Family Matters
The pandemic is still in full force. You and your children deserve the full benefits the government may offer in the coming month. Understanding the requirements to receive the checks and how they will be issued can help you manage your finances more effectively and keep your children healthy and happy.
If you have questions about adjusting your child custody arrangement, don’t hesitate to reach out to an experienced custody attorney. Whether or not the next set of stimulus checks are released, it still may be worth getting full custody of your kids. It’s about more than money: it’s about keeping your family together.
