coronavirus pandemic

Some Fall Through Cracks of Stimulus Check Loopholes

NBC 7 Responds explains who will not receive a check during the coronavirus pandemic

NBCUniversal, Inc.

Stimulus checks are showing up in people's bank accounts. Millions of people will get checks, but some of the hardest-hit populations are missing out because of several loopholes in the law.

"There are some unusual exceptions," said Howard Gleckman of the Urban-Brookings Tax Policy Center. "But for the most part, the vast majority of people can get payments."

Individuals can receive up to $1,200 and couples up to $2,400, plus another $500 for each child. The definitions mean many people will not get checks, including:

  • Teenagers ages 17 and 18 will not qualify for the $500 as a dependent child
  • College students age 23 and younger who are still claimed as dependents do not qualify their parents for the $500, or for the $1,200 on their own
  • Adults who are being looked after by their adult children
  • Immigrants who pay taxes but use a Tax Identification Number instead a Social Security Number
  • People with disabilities who are claimed as dependents by a relative
  • People who have not filed a tax return for either 2018 or 2019
  • Check amounts will also be reduced by about 5 percent for every $100 you made over $75,000

That means many people who might be relying on those stimulus checks are not eligible for them. But for some people in the above categories, there still might be away to get a stimulus check.

"If you're a college student and working part-time in college, then you don't have to worry," said Gleckman. "You can just file your own tax return and you'll be OK."

If you are a senior on Social Security who hasn't filed a tax return for 2018 or 2019, you can still qualify for a stimulus check.

"The IRS has just announced a way for people who have not filed tax returns for 2018 or 2019 to give the IRS the information they need," said Gleckman. "Fill out a very short form, which essentially has your name and your social security number and your bank information, and they'll get you that check."

You can fill out that form on the IRS website here.

They're out of luck. They're stuck.

Howard Gleckman, Urban-Brookings Tax Policy Center

But for people who claim anyone older than 16 on their tax returns, there isn't a way around that exclusion.

"They just caught up in the in the way the tax law defines people who are eligible for tax benefits as dependents," said Gleckman. "This law just picked up that definition and they're out of luck. They're stuck."

The checks are also vulnerable to being taken by debt collectors. The bill passed by Congress does not protect the money from being taken, an issue which two Senators are now trying to fix.

“Congress included this critical relief in order to help American families struggling to pay for food, medicine, and other basic necessities during the novel coronavirus (COVID-19) pandemic and resulting economic crisis,” wrote Senators Hawley and Brown in a letter to U.S. Treasury Secretary Steven Mnuchin.

That's because debt collectors can freeze bank accounts and garnish wages. The two Senators are urging both the Treasury Department and states to try and step in to prevent the funds from being taken out of people's accounts.

It's important people know where this money is coming from. Because of these checks, Gleckman says people might see a smaller refund on their 2020 tax return.

"Technically this is a rebate based on your 2020 tax return," said Gleckman. "So if you made a lot of money last year but lost your job, you'll still get the money. You're probably just not going to get it for a year."

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