$8,000 Stimulus Checks: How Can You Get It? Forget about the $1,400 stimulus checks approved via the American Rescue Plan or the $250 or $300 payment for each child issued through the enhanced child tax credit.
If cash-strapped Americans could tap into one particular “stimulus” check, all of those other direct payments might seem like only pocket change. It is called the Child and Dependent Care Tax Credit and eligible parents could get their hands on a whopping $8,000 worth of credits.
$8,000 Stimulus Checks: Who Qualifies?
According to the Internal Revenue Service, this is a “tax credit that may help you pay for the care of eligible children and other dependents (qualifying persons). The credit is calculated based on your income and a percentage of expenses that you incur for the care of qualifying persons to enable you to go to work, look for work, or attend school.”
It continues: “For 2021, the American Rescue Plan Act … made the credit substantially more generous (up to $4,000 for one qualifying person and $8,000 for two or more qualifying persons) and potentially refundable, so you might not have to owe taxes to claim the credit (so long as you meet the other requirements).”
What this means is that more Americans “will be eligible for the credit for the first time and that, for many taxpayers, the amount of the credit will be larger than in prior years.”
But do take note that those with adjusted gross incomes of more than $438,000 are not eligible for these credits even though they may have previously been able to claim them.
Stimulus Checks: Prepare Now
In order to streamline the entire tax credit process come tax season, the IRS is highly recommending that potentially eligible parents need to start preparing immediately. Parents should make sure to keep all receipts, forms, or documents outlining what was spent on child care, which could include day care services and related transportation costs to and from there.
“You must identify all persons or organizations that provided care for your child, dependent, or spouse,” the tax agency writes. “To identify the care provider, you must give the provider’s name, address, and taxpayer identification number (TIN).”
When tax season arrives, parents also need to complete Form 2441 and attach it to their federal tax return before sending it off.
Also, keep in mind that the IRS has noted that “for 2021, the credit is refundable for eligible taxpayers. This means that even if your credit exceeds the amount of Federal income tax that you owe, you can still claim the full amount of your credit, and the amount of the credit in excess of your tax liability can be refunded to you.”
Ethen Kim Lieser is a Washington state-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.