Who's Left Out of Coronavirus Stimulus Payments? Many College Students, Adult Dependents
March 28 2020 - 8:29AM
Dow Jones News
By Richard Rubin
WASHINGTON -- The government is preparing to send one-time
payments to most Americans to help them cope with the coronavirus
outbreak, but that is little comfort for many college students and
adult dependents who are left out.
The economic-relief law signed by President Trump on Friday
provides $1,200 to most adults and $500 for children under age 17.
That money -- $292 billion -- will start flowing within weeks from
the Internal Revenue Service into bank accounts. People with little
or no income can qualify, which means money will flow to retired
people and people who don't normally file tax returns. The benefit
phases out for individuals with income above $75,000 and married
couples with income above $150,000.
However, the plan excludes anyone who isn't a child and who can
be claimed as someone else's dependent. Who is in that group? Some
high-school students, college students and some disabled and
elderly people, many of whom show up on the tax returns of the
people they live with who provide most of their support.
They won't get money directly, and no one will get money for
them. In all, that is about 21 million Americans, according to the
Tax Policy Center. Immigrants who don't have Social Security
numbers also aren't eligible.
"That [$500] could be a month's worth of food," said Fern
Maklin, 71 years old, who is a dependent of her daughter and
son-in-law in Palm Harbor, Fla., and contributes her Social
Security payments to the household. "The stress and the anxiety, we
try to keep it low key, but it's there."
Parents and adults who have those dependents will still be able
to claim the $1,200 for themselves. They just won't get an
additional $500 for each of those dependents.
"Dependents, by definition, aren't responsible for a majority of
their financial support," said Michael Zona, a spokesman for the
Senate Finance Committee, which wrote the legislation. "The goal of
the recovery rebates is to provide support for Americans who are
responsible for their own financial well-being or that of another
during this pandemic."
The definition of who gets $500 is similar to the one that is
used for annual tax credits to create a distinction between
children under 17 and others.
Lawmakers based this week's bill on similar payments made in
2008, which also excluded the same group of non-child
dependents.
"Legislation is never perfect and always involves trade-offs,"
Mr. Zona said. "That is especially true of emergency legislation in
the midst of a crisis. Using existing mechanisms already in place
saves time when every moment matters."
Congress is already starting to work on the next round of its
response to the virus outbreak, and some advocates are pushing for
broader payments.
"Behind a welcome bipartisan push, the stimulus rebates are
broad and rightly include very poor families," said Chuck Marr,
senior director of federal tax policy at the left-leaning Center on
Budget and Policy Priorities, who said non-child dependents and
immigrants without social security numbers should be added. "Many
of them are on the front lines, delivering food and caring for the
elderly."
Travis Miller, a teacher in Nashua, Iowa, said he couldn't
understand why he would get a payment for his 16-year-old son but
not for his 18-year-old daughter.
"It doesn't make or break our household as far as money goes,"
he said. "To me, it's more of a principle thing. If we are going to
give money out to people in general, why are we not giving it out
to all people?"
The IRS hasn't yet provided details about how it will administer
the new provision. The IRS will be basing payments on 2019 tax
returns or on 2018 tax returns if 2019 isn't filed yet.
It isn't clear what will happen, for example, if someone was 16
years old on the 2018 return but has since turned 17 and become
ineligible for the $500 credit. If the IRS treats that person as
16, some families will have an incentive to wait to file their 2019
tax returns with a 17-year-old until after they get the payments.
The payments do not have to be paid back later.
The law also gives people who have been claimed as dependents in
the past an incentive to file their own separate tax returns to get
$1,200 if they are in fact independent. But the restriction on
payments applies to anyone who can be claimed as a dependent, which
could let the IRS enforce that restriction by examining how much
support a particular person receives from others.
Jeff Cunningham, an internal auditor in Pittsburgh, has three
children between ages 18 and 22, all of whom are in school and work
part-time. He had hoped they could benefit, but they won't.
"We can live with half or nothing," Mr. Cunningham said. "I
think that they should get the 1,200 bucks. They could certainly
use it."
Write to Richard Rubin at richard.rubin@wsj.com
(END) Dow Jones Newswires
March 28, 2020 08:14 ET (12:14 GMT)
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