Stimulus Check Update: Third Payment Could Include Big Changes for Dependents

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.

Still struggling to make ends meet? Lawmakers could make big changes to the dependent payments for the third stimulus check, putting more money in your pocket.

As millions of Americans continue to struggle with finances due to the toll the COVID-19 pandemic has taken on the economy, lawmakers are still haggling over President Joe Biden's proposed $1.9 trillion stimulus package. The good news is that there could be light at the end of the tunnel. Congress will begin working on the details of the proposed bill this week, and it includes money earmarked for $1,400 direct payments to qualifying Americans.

We won't know the exact details of those direct stimulus payments until lawmakers have finished working out the kinks, but it looks like the new bill could include some big changes to stimulus payments for dependents. While prior packages have excluded any stimulus money for children older than 16 -- including disabled children ages 17 or older and college students -- that appears it could change with this new round of payments.

The qualifications could change for some undocumented families as well, who were excluded from the past two stimulus payments under the prior administration. If you're a parent or guardian of an older teenager, college student, or a dependent adult with a disability, here's how this new package could put more money in your bank account.

A wider age of dependents

Unlike the past two stimulus payments, this latest proposal would include payments for 17-year-olds, college students, and adult dependents who qualify. This would add another $1,400 per child, college student, or adult dependent with qualifying disability to the direct payments sent to parents or guardians, according to a new report from The Washington Post.

According to the IRS guidelines, a dependent is categorized as either a qualifying child or qualifying relative. In order to be claimed as a dependent on your taxes, a qualifying child must be 1.) either younger than 19 years old or 2.) a student younger than 24 years old at the end of the calendar year.

There are other qualifying factors, too. If your child is what the IRS calls "permanently and totally disabled," you can still claim them as a dependent, no matter what their age is. You can also claim a qualifying relative, which could be either an adult or a child, if they depend on you for care.

The details aren't solidified yet, but what this could mean is if this new proposal passes, it could potentially put a lot more money into the bank accounts of parents or guardians than the last direct payments did. Qualifying parents or guardians under the income threshold who have claimed either type of dependent on their taxes would be eligible to receive payments for their children and adult dependents in the full amount of $1,400.

This differs significantly from the first two stimulus payments, which defined dependents as children ages 16 or under and did not include payments for college students or 17-year-olds. The prior two payments also did not include money for children who were disabled unless they were age 16 or younger on their parents' 2019 tax return.

Those children who did qualify for the first two payments also received significantly less than the amount paid to qualifying adults. The first check, sent in March 2020, included a flat rate of $500 per child dependent, while the second, which was approved and sent out in December 2020, paid $600 per qualifying child dependent.

An inclusion of mixed-status families

Undocumented parents were not eligible for the last two stimulus payments, but this new proposal could include some payments for mixed-status families. By widening the definition of dependents, the third check could mean more payments to more qualifying people, including families with citizen children whose parents are non-citizens.

For example, this could mean children of undocumented immigrants who were born in the U.S. might be eligible and would receive the full $1,400. Payments aren't made directly to minors, however, which would mean that their payments would be sent to their parents, no matter their immigration status, during the next round of stimulus payments.

The second stimulus check sent in late 2020 made it possible for families with one citizen parent to receive a payment, though the payments were limited to children ages 16 and under. This new proposal would send payments for every eligible dependent, regardless of their parents' status.

The first stimulus check was more restrictive than the second payment, and blocked any payments to families with even one undocumented parent in the household, regardless of their spouse's or children's statuses.

Will all families be eligible for payments?

While these proposed changes to dependents will certainly help some families with qualifying children, there is likely to be a tighter income cap for the next round of stimulus payments. Lawmakers want the third check to be targeted to those who need it, which would mean that those above a certain income threshold would be excluded from the payments.

It's still unclear what that threshold would be, though. Late last week, lawmakers passed a bipartisan amendment to ensure Americans in the "upper income" tier would not receive any stimulus funds from the third direct payment check. The amendment passed with nearly unanimous support.

Prior COVID-19 payments included restrictions that began to phase out payments to single filers making above $75,000 per year and joint filers making more than $150,000 per year. While the new eligibility restrictions aren't solidified yet, it seems likely that the income limits would be set lower for this round of payments.

What happens next?

Lawmakers haven't come to an agreement yet, but it appears that could be on the horizon. The new changes to the income cap have bipartisan support, which means that there will likely be a lower income cap with this round of payments. Whether or not the dependent changes will be included remains to be seen, but with Congress actively working on the details of this bill, we may see a deal in the near future. If and when that happens, it will likely take at least a couple weeks for stimulus payments to start rolling out to those who qualify.

Our picks for 2024's best credit cards

Our experts carefully review the most popular offers and select those that are worthy of a spot in your wallet. These standout cards come with fantastic benefits like generous sign-up bonuses, long 0% intro APR periods, and robust rewards.

Click here to learn more about our recommended credit cards

Our Research Expert

Related Articles

View All Articles Learn More Link Arrow