This blog was originally posted on April 4, 2020 and was updated on April 21, 2020 to reflect new information.
The CARES Act states that an individual who someone else can claim a deduction, according to section 151 of the tax code, is not eligible for the stimulus check themselves. Now, does that mean that the taxpayer claiming the dependent will receive the stimulus payout for each of those dependents you claim who does not qualify for the stimulus check themselves? That is a very good question.
So, I followed the links on the IRS website to the tax codes. It brought me to the Deductions for Personal Exemptions page on the Cornell Law School Website. There I found section 151 of the tax code. Section 151 of the tax code addresses the “Allowance of deductions for personal exemptions, but references section 152 to define a dependent. According to tax code 152, a dependent is:
(1) a qualifying child, or
(2) a qualifying relative.
What does that mean in terms of the stimulus check? And what if you claim both adult children and/or other relatives, such as a parent. Well let’s tackle each of these separately. Be mindful that these explanations are oversimplified for clarity. For a more detailed definition, you can click here to read the U.S. Code 152 on the Cornell Law School website.
What is a qualifying child according to the tax code?
Section 152 generally states that a “qualifying child”, first and foremost, must be related to the taxpayer and live with that person(s) for more than half of the year. The taxpayer would also be providing more than half of the dependents financial support. In essence, anyone under 19 years of age. A qualifying child can also be anyone under the age of 24 who is either a student or permanently disabled. So, this section of the tax code reads as though a taxpayer claiming those dependents between the ages of 17 to 24 would receive the $500 payout, if they met the criteria of being a student or are permanently disabled. However, the IRS has e-posters on its website depicting the limitations of the economic impact payment. The poster defines a qualifying child, for the sake for the payout, as those children ages 16 and younger only. This information is confirmed on the U.S. Department of The Treasury website as well.
Essentially, if you are between the ages of 17 – 23 years old, you will not receive an economic impact payment at all, even if they do work and file taxes. Those parents, like me and my husband, although our adult children 17 – 23 years of age are still dependent upon us to provide for most of their financial support, we will not receive a $500 payout for them.
What is a qualifying relative according to the tax code?
The part of the CARES Act that focuses on dependents in relation to the $500 stimulus payment, refers to both a “qualifying child” and a “qualifying relative”. These are both groups of people who can be claimed as dependents by another taxpayer.
According to section 151, as with a “qualifying child”, a “qualifying relative”, is an individual that is related to the taxpayer and receiving more than half of their financial support from the taxpayer. Additionally, a qualifying relative cannot be a qualifying child of the taxpayer claiming him/her as a dependent or the qualifying child of any other taxpayer.
So, basically, a “qualifying relative”, as with a “qualifying child”, will not be receiving a recovery rebate check and neither will the taxpayer providing their support according to the CARES Act and Tax Code Section 151.
