Stimulus Check Dreaming? Monthly Checks Are Coming in July (For Some)

Stimulus Check Dreaming? Monthly Checks Are Coming in July (For Some)

Due to this change, many families are now eligible to claim as much as $3,600 per year for a child under the age of six and up to $3,000 for children between six and seventeen. This all means for a family headed by a couple earning less than $150,000 or an individual making under $75,000, they now qualify to receive a $250 or $300 payment every month.

For those individuals who have filed their tax returns and are still wondering when they will get their hands on their refunds, know that they are not alone.

Keep in mind that the Internal Revenue Service generally disburses most refunds within about three weeks of tax returns being filed—but this particular year, with new tax codes and the pandemic still an ongoing issue, the wait has been up to eight weeks for many U.S. taxpayers.

With this in mind and less than a month to go in the extended tax season, many Americans are now pondering what the implications are for reporting their coronavirus stimulus checks on their respective tax returns.

As for the current batch of $1,400 checks under President Joe Biden’s $1.9 trillion American Rescue Plan, taxpayers should understand that the money cannot be garnished for unpaid federal debts or back taxes—but be aware that they can indeed be garnished for unpaid private debts, such as medical bills or credit card debts, if they are subject to a court order.

Take note that garnishment is a court order that allows for money to be removed from an individual’s bank account—and banks generally have to comply with a court’s demands.

To combat this, several states have stepped in to shield the most recent round of stimulus checks from private debt collectors after Congress failed to exempt the money from garnishment. Know that Washington lawmakers did, however, green-light garnishment protection measures for the previous $600 payments that were approved in December.

Keep in mind that there could potentially be future tax implications for the new $3,000 or $3,600 child tax credit that will start hitting the bank accounts of millions of eligible parents beginning in July. Biden’s legislation expanded child tax credits that generally allowed families to claim a credit of up to $2,000 for children under the age of seventeen—but that has been extended to lower-income families who otherwise wouldn’t receive such a credit.

Due to this change, many families are now eligible to claim as much as $3,600 per year for a child under the age of six and up to $3,000 for children between six and seventeen. This all means for a family headed by a couple earning less than $150,000 or an individual making under $75,000, they now qualify to receive a $250 or $300 payment every month.

The IRS, however, has sent out a warning that some tax credit recipients may have to pay back a portion of these benefits during tax season next year—as the legislation directs the federal government to issue advance payments of the child tax credit in periodic installments.

These advanced payments are largely based off the agency’s estimates on available data, such as overall income, marital status, and number and age of qualifying dependent children.

Thus, if there are any outdated or inaccurate data, they could generate an overpayment of the child tax credit—meaning that the affected individual will be responsible for any difference in the final amount.

Ethen Kim Lieser is a Minneapolis-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Follow or contact him on LinkedIn.