My College Kids Are Already Choosing the Video Games They Want to Buy with Their COVID-19 Economic Relief Payment.
How Much Will They Get?
March 27, 2020 | Stacy Miller, CFP®, Bright Investments
Nothing. College students who are claimed as dependents will get nothing.
There’s a gap in the Coronavirus Aid, Relief and Economic Security Act (CARES) Act, and it’s one that affects college families. I completely understand the frustration that this will bring into your home because I have two adult children that were studying in two different states who are now home. I understand the stress and the expense of bringing them home. I too have already paid for dorms & dining, and now my grocery bill is completely out of hand. There’s more to this story, so please keep reading, but I’ve verified it with a reporter who has spoken directly with the IRS. There is no economic relief for college students who are considered dependents.
Under this new stimulus package, each adult (under AGI threshold; see below) will receive $1,200, and for any dependent under 17-years old, an additional $500. So, if you are 17+ and are a dependent on someone else’s tax return, you won’t get a payment. For other taxpayers, here are some other details for the plan:
- The payment will be based on 2019 tax returns, or if not available, 2018 tax returns.
- Payments could start in as early as three weeks (mid-April), but some people won’t see the benefit until 2021, after they file their 2020 taxes. For example, if you were above the threshold in 2018/2019 but lost your job recently due to the coronavirus, you won’t get a check now, but you could see an adjustment to the tax refund or payment due on your 2020 tax return.
- Payments received now will not have to be given back.
- If there is any change regarding births/deaths/marriages/divorces/moves from 2018 to 2019, and you haven’t filed your 2019 return yet (it’s not due until July 15, 2020 now), you’ll need to talk to your accountant to see if there’s any advantage to waiting.
The CARES Act is in the process of being signed by the president as I finish this article. I will update with any additional clarity as I get it. It is still unclear what happens if these students file their own tax return, and this course of action could be an opportunity worth exploring with your accountant.
Hang in there. It’s frustrating. It’s nerve-wracking. Each day my plan is to allow the system to work, to keep my community informed, to ask questions, and to be patient. And, of course, to wash my hands and wipe down everything.
Now I’ve got to tell my boys that they won’t be able to buy those video games, and I’m not looking forward to it.
AGI Threshold (where reductions to payments begin):
Married, Filing Joint: $150,000
Head of Household: $112,500
All Others: $75,000
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