My daughter is disabled and her only income is SSI. Her 6 year old son is also partially disabled, has autism and ADHD. Can she take advantage of the new child tax credit from July? If she can, how does she file her 2020 taxes since she has no income other than her SSI?
Yes, it sounds like your daughter is eligible for the extended child tax credit. Typically, you need at least $ 2,500 in earned income, which is essentially money you make from work.
But in 2021 the rules will be different. You don’t need any earned income to qualify for the loan. So, as long as your daughter can claim her 6-year-old grandchildren as a dependent for tax purposes – that is, she pays more than half of his upkeep – she should qualify for that money, even if she only has the Additional Safety Income (SSI) source of income.
As the parent of a child between the ages of 6 and 17, she should be eligible $ 250 as of July 15th and lasts until December. Then she receives the other $ 1,500 of the $ 3,000 credit next year at tax time.
Your daughter should be safe submit a tax return although she is under no obligation to do so. You can apply even if you have no taxable income. The easiest way to do this is with a Free tax return software. Your daughter must enter her own social security number as well as that of her son. She can simply enter $ 1 as income. The IRS can refuse it as a blank return if they enter it as $ 0. Providing her bank account and routing number for direct deposit will help her to receive the payment as quickly as possible.
If your daughter received the three stimulus checks and payments issued on her son’s behalf since April 2020, the IRS likely has the information it needs to raise that money for your daughter.
However, on June 6th, the IRS urged people to file their 2020 tax returns ASAP to ensure they received the credits quickly. Until we get further instructions, I would submit the file as it is free and only takes a few minutes.
Robin Hartill is a certified financial planner and senior writer at The Penny Hoarder. Send your tricky money questions to [email protected].
This article originally appeared on www.thepennyhoarder.com