Do children born in 2020 qualify for the $500 stimulus tax credit? TurboTax is saying $2400 is the max and is not crediting the other $500.

[plbarne]

My daughter was born in January, and all information I can find says I should get an additional $500 for her as a tax credit. However, TurboTax says that $2400 is what I was supposed to receive alone (my wife and I made less than $150,000 in 2019 and filed together).

[xmasbaby0]

If your child was born in 2020 then make sure you have entered her as a dependent and entered her Social Security number.  For a child born in 2020 you need to say she lived with you the whole year. You should get the $500 stimulus for her------it will show up on line 30 of your Form 1040.  There are many updates that still must happen to the software, so if it not showing yet don't panic.

[Critter-3]

Agreed ... review the dependent entry section and make sure you claim ALL YEAR as the screen tells you to do ... also the program may not yet be registering a 2020 birthday yet so look again after the first of the year.

[plbarne]

Yep - all of those options are checked. Perhaps the software isn't updated, and is also awaiting possible future stimulus changes soon. I'll wait till later in January before I start wondering more. Thanks!

[DoninGA]

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@plbarne wrote:

Yep - all of those options are checked. Perhaps the software isn't updated, and is also awaiting possible future stimulus changes soon. I'll wait till later in January before I start wondering more. Thanks!

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Just did a test with a dependent born in 2020.  Since we already received a stimulus payment in 2020 of $2400 the program entered $500 as the Recovery Rebate Credit for the child on Form 1040 Line 30.  Also the program will enter the Child Tax Credit on Form 1040 Line 19.

Makes sure that you answer the question for receiving the stimulus payment in 2020.  The program asks about any stimulus payment after you complete Other Tax Situations section of the program.

If you are using the TurboTax online editions you can view your Form 1040.

Click on Tax Tools on the left side of the screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

[NCperson]

@plbarne - this question came up in another post in the last few weeks and it turned out there was an inadvertent check mark that prevented the $500 from being credited.  I can't recall where that check mark was (near the social security number??), but I think either @Critter-3 or @VolvoGirl were part of that thread and asked the question where the inadvertent checkmark was.

if you look at the tax form, the child should NOT have the checkmark "qualified for other dependents". if the checkmark is there, that is a clue to the problem

[plbarne]

I appreciate the double check. I've reviewed all forms and no changes. My 1040 L30 is blank (i.e. $0), and I have answered that question (I populate with $2400, the amount my wife and I received - combined we made less than $150K in 2019 so that's not the problem). Interestingly if I say we didn't get a stimulus, it offers us $2258 instead of $2400. My daughter is a full dependent as well and I'm credited $2K for the child tax credit. 

[Critter-3]

May I suggest you delete the dependent and then enter them again ... if they are under the age of 17 you should see the stimulus credit applied later.  

You can peek at only  the Federal form 1040 and the summary of the state info by going here:

1) lower- Left side of the screen...click to the left side of the "Tax Tools" text selection.
2)  then select "Tools"
3) then select "View Tax Summary" from the pop-up
4) then back to the left-side and "Preview 1040"

Then hit the "Back" on the left side to get back to your tax entries.

To view your entire return using the online editions (including the state) before you file, you will need to pay for your online account.

To pay the TurboTax online account fees by credit card, without completing the 2019 return at this time, click on Tax Tools >>> Tools  and then Print Center.  Then click on Print, save or preview this year's return.  On the next page, to pay by credit card, click Continue.  On the next screen it will ask if you want Audit Defense, if you do not want this option just click on the Continue button.  The next screen will ask for all your credit card information so you can pay for the account.

           

[NCperson]

@plbarne - one thing you mentioned may be to the answer: 

<<combined we made less than $150K in 2019 so that's not the problem>>

how much did you plug in you estimated to have made in 2020! EVERYTHING about the stimulus is based on 2020 numbers; 2019 doesn't count.  

So since you state that TT calculated your stimulus as $2258, that implies your 2020 AGI is $162,840 , which is reducing the $2900 owed to you by $5 for each $100 over $150,000. 

The way the stimulus works is that if you received more stimulus last spring ($2400) than what is now calculated by 2020 Income ($2258), you are not required to return the difference - that is the way the CARES Act was passed.

is that the answer?  (as a test, reduce your estimated income in TT by A LOT and see if the $500 shows up!)

[plbarne]

Ok, that makes sense! Our 2020 AGI is near that number. Does that mean I don't qualify for the $500 credit though, despite qualifying for $2400 the first time through? 

[Critter-3]

Ok ... it is not that you don't qualify but that the max you can get is limited ... and since you already got more than allowed you will not get any more.   Once you can look at the entire return WITH all the worksheets then you can review that credit's worksheet ...

You can peek at only  the Federal form 1040 and the summary of the state info by going here:

1) lower- Left side of the screen...click to the left side of the "Tax Tools" text selection.
2)  then select "Tools"
3) then select "View Tax Summary" from the pop-up
4) then back to the left-side and "Preview 1040"

Then hit the "Back" on the left side to get back to your tax entries.

To view your entire return using the online editions (including the state) before you file, you will need to pay for your online account.

To pay the TurboTax online account fees by credit card, without completing the 2019 return at this time, click on Tax Tools >>> Tools  and then Print Center.  Then click on Print, save or preview this year's return.  On the next page, to pay by credit card, click Continue.  On the next screen it will ask if you want Audit Defense, if you do not want this option just click on the Continue button.  The next screen will ask for all your credit card information so you can pay for the account.

           

[NCperson]

that is correct 

the money sent in the spring was an advance against 2020 income taxes..... the IRS used 2018/2019 as the basis of how much you truly were due with the further stipulation that if it turned out that you received too much, you didn't need to return it. 

You really only qualified for $2258 but the IRS had no way of knowing that in the spring, as they sent you $2400. (technically, you never were eligible for the $2900 based on your 2020 income)

You are not required to return the $142 extra you were sent! A unusual gift from the IRS!!!! 

p.s. if this next stimulus get signed by Trump, it all works the same way, other than it's $600 per person....so that would be $1800 reduced by $5 for each $100 over $150,000 or the same $642 in your case, leaving $1158.  But if they send you the $1200 (they still won't know about your newborn) you won't have to return the difference).

[Mike9241]

the actual credit is based on your 2020 adjusted gross income. married with one qualifying dependent the max is $2900.  if AGI is $162000 you lose 5% of the $12000 excess or $600 so the max you're entitled to is $2300. having received $2400 you do not have to repay the excess and the excess is not taxable income