The Lili Account Keeps Track of Freelancer Expenses For You

We know all about the challenges of freelancer life, believe us. We know it’s not always easy making a go of it as an independent contractor, a side hustler, a gig worker, whatever you want to call it.

For one thing, you have to do all this extra financial stuff, and it’s tricky stuff. When you work for yourself, it’s on you to set aside money for taxes. And ideally, you’re supposed to keep track of your work-related expenses so you can pay less in taxes. But c’mon, how many of us are really all that great about doing that consistently?

Good news: We’ve found a cool online checking account that helps you do all that stuff. Lili is a mobile banking service that’s built exclusively for freelancers like you. The app, available for iOS or Android, is laser-focused on your specific needs.

Lili is totally free, and its digital tools help you save for taxes, take payments from clients and keep track of your expenses — all in the same account. It also allows you to overdraft your account without hitting you with costly fees. And Lili just added new business tools designed to help independent workers like you save time and money.

Swipe Left or Right to Sort Your Expenses

The account comes with its own Visa debit card. Whenever you spend any money out of the account, you’ll get a push notification asking you to swipe left or right to instantly categorize the expense as either “personal” or “business.”

At tax time, this will allow you to totally maximize your expenses and reduce your taxable income, lowering your tax bill.

Seriously, it’s so much easier this way!

Speaking of taxes, Lili will help you tally up your earnings and gauge what income taxes you’ll have to pay. And every time you get paid, you can have Lili automatically set aside a certain percentage for taxes.

Basically, Lili makes it easy to automate everything so you never have to worry about it again.

More Tools in Lili’s Toolbox

We freelancers need all the help we can get, you know? Luckily, Lili has more tools in its toolbox for us.

ATMs: You can get cash with your debit card at nearly 40,000 MoneyPass ATMs across the country. You have fee-free access to those. For out-of-network ATMs, there’s a $2.50 fee in the U.S. or $5 if you’re out of the country.

No overdraft fees: Unlike virtually all the brick-and-mortar banks, Lili doesn’t charge overdraft fees. You can overdraft up to $200 without getting hit with a fee. Other fee-free banks won’t let you overdraft at all.

No other fees: There are also no hidden fees.

Get paid fast: When clients and customers pay you via direct deposit, you get access to those funds within two business days — which is faster than most banks.

Cash-back rewards: Get cash back when you swipe your debit card at more than 14,000 businesses.

Mobile check deposit: It’s easy to deposit a check via the app. Just sign the check, then write “for Lili mobile deposit only” on the back of it, snap a photo of the front and back, then enter the amount into the app. Done.

Cash deposit: If you need to make a cash deposit, you can do it at any of 90,000 Green Dot locations like Walmart, Walgreens or 7-Eleven.

Expense reports: Lili automatically generates these every quarter to help you pay your taxes and add up your deductibles.

Unlimited invoicing: When you’re a freelancer, sending your clients invoices is just another hassle. But it’s easy to create invoices and get paid directly into Lili.

Insights: Lili lays out insights into in a visual format to help keep track of your personal and business finances.

Emergency fund: This past year has taught us the hard way that everyone should have one of these. You never know when you might lose a good freelance gig or suffer some other catastrophe. With Lili, you can automatically set aside a little each month to build your emergency fund. And you earn up to 1% interest on your savings — way more than at a brick-and-mortar bank.

Three final thoughts:

  • Money in your Lili account is FDIC insured for up to $250,000.
  • There’s no minimum account balance, so don’t worry about that.
  • It only takes a few minutes to sign up via iOS or Android and make your freelance life so much easier — and save big on taxes.

Mike Brassfield (mike@thepennyhoarder.com) is a senior writer at The Penny Hoarder. He’s also a freelance writer on the side, and he knows what a pain freelance taxes are.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Do You Get $300/Month Child Tax Credits if You Owe Child Support?

When you’re delinquent on child support, your tax refund is typically intercepted and sent to the appropriate child support agency through the Treasury Offset Program. The same rules applied to the first round of stimulus checks in 2020.

But what about the advance child tax credits of $300 a month for parents of children younger than 6 and $250 a month for kids ages 6 to 17? Here’s what you need to know, whether you’re a parent who owes child support or your child’s other parent is delinquent.

Will the IRS Offset Advanced Child Credits if I Owe Child Support?

The parent who can claim a child as a dependent on their tax returns, meaning they provide more than half of their support, is the parent who will receive the child credits. So it’s unlikely that you’d qualify for the credit on behalf of any child you’re behind on support payments for.

But if you have other children who qualify as your dependents and you’re otherwise eligible, you’ll still get the advance $300 monthly child tax credits, even if you’re behind on child support. The IRS won’t offset the advance payments for any reason, including child support debt.

However, the advance payments are only half of the expanded credit for 2021. The total credit is $3,600 for children 6 and younger, and $3,000 for children 6 to 17. The remaining half will be paid as a refund when you file a tax return next year.

The other half of the credit, along with the rest of your refund, can be seized to offset child support as usual next year at tax time.

This is essentially how things worked with the second and third stimulus checks. Neither payment was offset for debt of any kind, including unpaid child support. But people who qualified for the payment and didn’t receive it had to file a 2020 tax return. They got their payments with their tax refund as a Recovery Rebate Credit. But if they had unpaid child support or back taxes, the credit was seized along with the rest of their refund.

Can I Get My Ex’s Child Credits if They Owe Me Child Support?

If you’re the parent who provides more than half of the child’s support, you’ll receive the credits, not your ex. However, if your ex qualifies for $250 or $300 a month because they have other children, they’ll still receive that money even if they owe you child support.

If you usually receive their tax refund through the Treasury Offset Program, you may receive the other half of their child tax credits with the rest of their refund next year.

What if My Spouse Owes Child Support?

Since the advance credits won’t be garnished for child support, your monthly payments shouldn’t be affected. However, if you and your spouse file a joint return, you should file an injured spouse claim using Form 8379 when you submit your 2021 return. Doing so protects your half of the remaining credit from being offset.

Can the Credits Be Garnished for Other Debt?

The advance part of the credit can’t be offset for money you owe the federal government. If you owe back taxes, your monthly payments won’t be reduced.

But the law doesn’t prevent non-federal creditors from going after the advance credits. So if you owe state or local taxes or if a private creditor has a garnishment order against you, your child credits could be seized. Some states and financial institutions have opted to protect advance child credit payments from garnishment.

The half of the credit that’s payable as a refund can still be offset if you owe the federal government money.

When Will the Child Credits Arrive?

The first advance child credits are scheduled for July 15. They’ll continue on a monthly basis through December.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to AskPenny@thepennyhoarder.com.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

How to Get Your $300/Month Child Credits if You Don’t File Taxes

If you have dependent children under 18 and you’re not required to file a tax return, you probably qualify for the temporary child tax credits that will start going out in July.

Now there’s a way for non-filers to register to receive the payments of up to $300 for children younger than 6 and up to $250 for children ages 6 to 17. The IRS just released its Non-Filer Sign-up Tool for the child tax credits. In just a few minutes, you can give the IRS the information it needs so that the first check hits your bank account on July 15.

What Is the Non-Filer Tool and How Do I Use It?

The non-filer tool is a feature on the IRS website that allows people who aren’t required to file taxes to provide the information the IRS needs to process stimulus payments and the child tax credits. For people who have to file taxes, the IRS receives this information from their tax returns. But some people aren’t required to file taxes because they have little or no income.

The feature was originally developed to distribute the first round of stimulus checks to non-filers.

To use the non-filer tool, you’ll need to provide:

  • Your name
  • Your email address
  • Date of birth
  • Your current mailing address
  • Social Security numbers for yourself and all dependents
  • Bank account number and routing number
  • Identity protection number if the IRS provided you with one earlier in the year

Who Should Use the Non-Filer Tool?

You should only use the non-filer tool if you didn’t file a tax return for 2020 and don’t plan to file one. After you provide the information listed above, the IRS will tell you whether you qualify for the child credits. If you didn’t receive your stimulus checks and aren’t required to file taxes, you can also use the non-filer tool to get your payments.

If you filed a tax return in 2019 and reported all your dependents then, you don’t need to use the tool because the IRS already has the information it needs. Likewise, if you used the non-filer tool last year to get your stimulus checks and you reported all your dependents, you don’t need to use it now.

How Can I Update My Information With the IRS?

Don’t use the non-filer tool to update information that’s already on file with the IRS. The IRS will release a Child Tax Credit update portal later this month.

You’ll be able to provide information for children you haven’t been able to claim on past tax returns, report a change in income or marital status and update your mailing address. The portal will also allow you to update your banking info, which the IRS generally hasn’t allowed you to do through its website in the past.

The monthly payments are an advance on a temporary 2021 tax credit of $3,600 for children younger than 6 and $3,000 for kids between ages 6 and 17. Half of the credit will be paid each month from July through December. The remaining half will be paid out as a tax credit next year.

You’ll be allowed to use the portal to opt out of the advance credit if you’d prefer to receive the entire amount next year at tax time.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advice column. Send your tricky money questions to AskPenny@thepennyhoarder.com.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Best Mileage Tracker Apps of 2021

If you’re a Lyft or Uber driver, you already know how important it is to track your mileage and expenses.

You’ll need that information come tax time to make sure you’re squeezing out every last penny in deductions.

But rideshare drivers aren’t the only people eligible for mileage tax deductions. If you drive your personal vehicle for other kinds of paid work or use it for charitable, moving or medical purposes, you may also qualify for a standard mileage rate deduction.

Back in the old days, tracking mileage meant pulling a crumpled notebook out of the glove box and hoping your pen wasn’t out of ink.

But now there’s an app for everything — including mileage tracking.

Here are our favorites.

7 Mileage Tracker Apps We Love

These apps will help you stay on top of all the business miles you travel, so you can reduce your tax liability when it’s time to pay Uncle Sam. And you can try out most of them for free!

1. Everlance

Everlance is a versatile app that not only tracks your mileage but also helps you keep track of all your other business expenses.

Features include:

  • Automatic Tracking: Everlance detects when your car starts moving and records the miles you drive with background tracking.
  • Mileage Classification: With a quick swipe of your finger, you can categorize each trip as work-related or personal. You can also set your work hours, automatically classifying drives during those hours as business trips.
  • Expense Tracking: Sync your bank account or credit card to the app to keep track of other business expenses. Everlance will scan your expenses and note which ones might qualify as tax write-offs.
  • Data Reports: Get Excel or PDF reports of your mileage and business spending to make everything easy when it’s time to file your taxes.
  • Save for Taxes: Connect Everlance to your bank and set up automatic saving withdrawals so a percentage of your income gets put aside for taxes.

Everlance has three pricing tiers for self-employed users:

  • Free Plan: Pay nothing to track 30 automatic trips a month. You’ll also get unlimited manual tracking for trips, receipt uploads and IRS-compliant reports.
  • Premium Plan: For $60 a year or $8 a month, you’ll get unlimited automatic trips a month. Premium features include the ability to sync your credit and debit cards, receive PDF and Excel reports and get a deduction finder.
  • Premium Plus: For $120 a year or $12 a month, you’ll get all the features of the Premium level, plus individual training with an account manager and VIP customer support.

Everlance also has three pricing tiers for business owners:

  • Free Plan: You’ll get 30 automatic trips a month per user, for an unlimited number of users. You’ll also get unlimited receipt uploads, reimbursement and expense reports, team analytics and a central administrator dashboard.
  • Business Plan: For $120 a year or $12 a month, you’ll get credit card or bank account syncing, insurance verification add-ons, VIP customer service and user trainings.
  • Enterprise Plan: You’ll need to schedule a meeting to discuss costs for the Enterprise Plan. This service tier includes bulk management of named locations and expense categories along with a dedicated onboarding and customer success manager.

Everlance is a nice mileage tracker option for freelancers, entrepreneurs and small business owners who could benefit from extra features to help cut down their tax bill.

Download Everlance from the App Store or Google Play.

2. Stride

Stride is a free app that runs in the background, quietly logging every mile you drive, and then generates an IRS-ready report that you can use to do your taxes.

Features include:

  • Automatic Tracking: Stride will automatically track your mileage without you having to manually indicate the start or stop of a trip.
  • Expense Tracking: Keep tabs on other business spending by taking photos of receipts. Stride’s tax experts will help identify potential tax-deductible expenses.
  • Data Reports: Be ready for tax time with IRS-compliant summaries of your mileage and other deductible expenses.

Stride is a great choice for independent contractors and self employed individuals looking for a simple app to track mileage and business expenses with ease.

Download Stride from App Store or Google Play.

A woman tracks her mileage while on her motorcycle.

3. TripLog

TripLog helps individual workers and companies alike cut down on administrative work by automatically tracking miles, recording incurred business expenses, streamlining timesheets and more.

Some of its features include:

  • Automatic Tracking: Record mileage multiple ways. You can track trips automatically as the app runs in the background on your phone, or you can use car bluetooth technology or a car USB device. There’s also the option of tracking trips manually.
  • Mileage Classification: Easily distinguish between business or personal trips. You can even set your work hours to automatically classify trips during certain hours as business trips.
  • Route Planning: Prepare for the day’s routes ahead of time.
  • Frequent Trip Rules: Automatically categorize trips you drive frequently.
  • Expense Tracking: Track expenses like gas, tolls and business dinners using this app.
  • TripLog Timesheets: Your employees can use this feature to clock in and out and submit timesheets.
  • Data Reports: Get tax-compliant reports to deduct mileage and other expenses when filing your tax return.

TripLog has four price tiers:

  • Lite: This is TripLog’s free version. It allows a single user to track up to 40 trips or expenses a month manually.
  • Premium: This option is for up to 10 users and costs $4.99 per user per month, or $59.99 if billed annually. It automatically tracks mileage. You can also record expenses like fuel and meals.
  • Premium + Time: This option is for up to 10 users and costs $8.33 per user each month, or $99.99 billed annually. In addition to the features of the Premium plan, it includes time tracking, a clock-in/clock-out timesheet and more.
  • Enterprise: This option is available for 11 or more users. You’ll need to contact TripLog to discuss pricing. With this version, you’ll get extras like an administrator console and integration with popular tax and accounting software like QuickBooks and ADP.

TripLog is a good app for owners of small businesses who have mobile employees, in addition to self-employed individuals looking to keep tabs on mileage and other expenses. Its many features that help business owners cut down on administrative work makes TripLog stand out from other apps.

Download TripLog from the App Store or Google Play.

4. Hurdlr

Hurdlr automatically tracks mileage and identifies tax deductions. You can connect this app to your financial institution to keep up with your income and expenses.

Features include:

  • Automatic Tracking: Hurdlr detects when your vehicle starts and stops automatically.
  • Mileage Classification: Designate which trips are business and which are personal.
  • Expense Tracking: Keep tabs on business spending by syncing to your bank and having the app automatically categorize certain recurring expenses (like tolls and car washes if you’re a rideshare driver) as business expenses and tag them as potential deductions.
  • Tax Estimator: This feature helps you estimate what your tax obligation will be ahead of filing your quarterly taxes. It’ll also send you reminders about upcoming tax deadlines.
  • Data Reports: Get your mileage and expense data compiled into tax-compliant reports.

Hurdlr has three pricing options:

  • Free: This version includes unlimited mileage tracking, as well as the ability to add income and expenses. It also provides a tax calculations summary and a feature to export or email reports.
  • Premium: For $9.99 a month or $100 a year, you’ll get unlimited mileage tracking, as well as expense tracking and income tracking. You can set specific business hours and set up automatic tags for certain expenses. You’ll also get calculations for state and self-employment taxes.
  • Enterprise: This option is geared toward business owners, and you need to contact Hurdlr for pricing information. This version provides personal training and premium integrations.

If you’re a rideshare driver, independent contractor or entrepreneur, Hurdlr is a great option not just for tracking mileage, but to stay on top of your profit and tax obligations.

Download Hurdlr from the App Store or Google Play.

5. MileIQ

MileIQ automatically captures your drives and delivers a comprehensive mileage log whenever you need it.

Features include:

  • Automatic Tracking: MileIQ runs in the background, automatically keeping tabs on all the miles you drive.
  • Mileage Classification: You can classify your drives into categories like business or personal by simply swiping with your thumb to assign them to the correct list — or you can set your work hours and let MileIQ classify your trips automatically.
  • Frequent Trip Recognition: You can save recurring routes in the app so they’re automatically categorized.
  • Data Reports: MileIQ compiles weekly and monthly reports of your mileage. You can also create customized reports.

MileIQ has three price options:

  • Free: Track 40 trips per month with this free version.
  • Unlimited: Get mileage tracking on unlimited trips for $59.99 a year or $5.99 billed monthly.
  • MileIQ for Teams: This option allows tracking for multiple users with single billing. It includes volume discounts and expert customer support. Contact MileIQ for cost information.

MileIQ is ideal for individuals looking to ditch paper logs and go digital with automatic mileage tracking.

Download MileIQ from the App Store or Google Play.

Cars sit in traffic on a bridge going from Tampa to St. Petersburg, Florida.

6. SherpaShare

SherpaShare advertises itself as the “ultimate rideshare driver assistant.” It helps you record how many miles you drive and other related expenses with little effort — and offers ways to increase your income and lower your expenses.

Features include:

  • Automatic Tracking: Stay on top of the amount of miles you drive without having to manually indicate when you start and stop trips.
  • Smart Driver Tools: SherpaShare helps you identify profitable routes and keep tabs on your hourly revenue and profit.
  • Expense Tracking: Record all the business spending you encounter throughout the workday.
  • Driver Savings: Get discounts on related products and services, such as insurance, in-car accessories and tax preparation.

SherpaShare has two versions:

  • Basic: Pay $5.99 monthly or get billed annually at $59.99 a year. This plan includes unlimited mileage tracking, profit charting and member savings.
  • Super Premium: This premium package costs $10 per month or $120 per year. You get all the features of the basic plan, plus priority support and exclusive discounts.

Consider this app if you drive for Uber, Lyft or another similar company. This app can also be useful for delivery drivers.

Download SherpaShare from the App Store or Google Play.

7. QuickBooks Self Employed

From Intuit, the maker of TurboTax, you can download QuickBooks Self Employed to track miles, organize expenses and estimate taxes.

Features include:

  • Automatic tracking: Log your miles automatically via GPS tracking. There’s also the option to add your trip manually.
  • Mileage Classification: Categorize business and personal miles with a swipe of your thumb.
  • Data Reports: Get detailed reports outlining your miles driven and potential deductions
  • Tax Estimator: This app will estimate your quarterly taxes for you.

QuickBooks Self Employed has three price tiers:

  • Self Employed: For $7.50 a month, you get automatic mileage tracking with categorization, tips to increase your tax deductions and calculations of your estimated quarterly taxes.
  • Self Employed Tax Bundle: For $12 a month, you get all the perks of the previous package plus the ability to pay your quarterly taxes online and file your state and federal tax returns.
  • Self Employed Live Tax Bundle: For $17 a month, you’ll enjoy all the benefits of the lower-tiered plans, plus access to real certified public accountants (CPAs) for year-round advice and a final review of your tax return.

QuickBooks Self Employed is perfect for solo workers looking to accurately record their miles driven and make it easy to file taxes.

Download QuickBooks Self Employed from the App Store or Google Play.

Top Features of Mileage Tracking Apps

When trying to decide which mileage tracker app would be the best for you, consider one with these top features.

Automatic Mileage Tracking

With automatic mileage tracking, you can just get in your vehicle and drive — no need to do anything to signal the start of the trip or make note of your odometer reading. Having automatic tracking saves you from having to track miles by hand, which is always a win in our book.

Mileage Classification

Mileage classification allows you to distinguish between personal and business trips. If you use your vehicle for work and personal purposes, it’s helpful to be able to easily categorize trips.

Be aware, only business mileage is tax deductible. If you’re dropping off a rideshare customer and then decide to visit a friend’s house for a break before picking up more passengers, you can’t deduct the miles driven to your friend’s place.

Tax-Compliant Data Reports

Mileage tracking apps that turn your miles driven into IRS-compliant mileage reports will make it easier to deduct your business travel expenses when it’s time to file taxes. Also if the IRS audits your tax return, these reports will be an accurate record of your mileage log.

A woman takes photos while working out of her vehicle.

Why Should You Use a Mileage Tracker App?

If you’re going to deduct mileage from work trips on your taxes or you need to track mileage to get reimbursed for gas at work, mileage trackers can be very useful. You don’t have to worry about wasting time tracking your miles and writing down the details of trips with pen and paper.

Mileage trackers make it easy to stay organized and have all the information you need come tax time.

Independent contractors, entrepreneurs and small business owners can either keep record of all their actual expenses (like gas station receipts and parking stubs) or use the IRS standard mileage rate to determine the deduction amount for business travel. The rate for 2021 is 56 cents per mile.

If you drove 10,000 miles for business, for instance, you would be able to deduct $5,600 from your tax liability.

Pro Tip

The 2021 standard mileage rate for charitable purposes is 14 cents per mile. The rate for moving (for active duty military personnel) or medical purposes is 16 cents per mile.

People in the following lines of work should consider downloading a mileage tracking app:

  • Rideshare drivers
  • Delivery drivers
  • Truck drivers
  • Real estate agents
  • Airbnb hosts
  • Freelance photographers
  • Home health aides

Frequently Asked Questions

Use this Q&A to help you determine which mileage tracker to download.

What Is the Best App for Tracking Mileage?

All of the mileage tracker apps listed above come highly recommended. However, the best mileage tracking app for you will be one that fits your needs.

If you’re just looking for a simple app to track your mileage without added features like bank integration or money-saving tools for drivers, then Stride may be the one for you.

If you’re an independent contractor and would like your app to make it easier for you to nail down mileage deductions for filing quarterly taxes, try Hurdlr or QuickBooks Self Employed.

If you run a small business with a fleet of multiple vehicles, you might consider Everlance or TripLog.

Reviewing the features of each app listed above will help you determine which will be the best mileage tracker for you.

Is There a Free Mileage Tracking App?

Stride is the only completely free app on this list. However, Everlance, TripLog, Hurdlr and MileIQ all have a free version. You can test out the free version to see if you like the app before committing to paying for the premium version with more features.

What Is the Best Free Mileage Tracker App?

You really can’t go wrong with any of the mileage tracker apps we’ve discussed. Stride is completely free, but trying the free version or a free trial of the other apps are also a great way to go.

You’re not making any financial commitment, so you can also switch to one of the other mileage tracking apps if you try one and find it doesn’t serve you well.

The information on each mileage tracking app listed above will help you select the best mileage tracker for you.

How Do I Track my Mileage for Tax Deductions?

The brilliant thing about using one of these best mileage tracking apps is that they keep a record of your work travel so you can deduct business mileage with ease. You don’t have to worry about how to track your mileage. The app records it for you!

When deducting mileage on your tax returns, the IRS is looking for an accurate account of business miles driven. In addition to your mileage numbers, you should keep track of the dates of your trips, the places you travelled and the reason for the trip. Mileage tracker apps, like the ones listed above, will help you keep the required records.

Lisa McGreevy is a former staff writer at The Penny Hoarder. Nicole Dow is a senior writer at The Penny Hoarder.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

Dear Penny: Do You Get $250/Month Child Credit if You’re on SSI?

Dear Penny,

My daughter is disabled and her only income is SSI. Her 6-year-old son is also partially disabled, having autism and ADHD. Can she take advantage of the new child tax credit that starts in July? If she can, how does she file her 2020 taxes since she has no income other than her SSI?

J.

Dear J.,

Yes, it sounds like your daughter will qualify for the expanded child tax credit. Typically, to qualify for the child tax credit, you need at least $2,500 of earned income, which is basically money you earn by working.

But in 2021, the rules are different. You don’t need earned income to qualify for the credit. So as long as your daughter can claim your 6-year-old grandson as a dependent for tax purposes — meaning she provides more than half of his support — she should qualify for that money, even though Supplemental Security Income (SSI) is her only income source.



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As the parent of a child between the ages of 6 to 17, she should be eligible for $250 beginning July 15 and continuing through December. Then, she’ll receive the other $1,500 of the $3,000 credit at tax time next year.

To be on the safe side, your daughter should file a tax return even though she’s not required to. You’re allowed to submit one even if you don’t have taxable income. The easiest way to do so is to use a free tax filing software. Your daughter will need to input both her own Social Security number and her son’s. For income, she can simply enter $1. The IRS may reject it as a blank return if she enters it as $0. Providing her bank account and routing numbers for direct deposit will help her get the payment as soon as possible.

If your daughter received the three stimulus checks that have gone out since April 2020 and received payments on behalf of her son, the IRS probably has the information it needs to get your daughter that money.

But as of June 1, the IRS was urging people to file their 2020 tax returns ASAP to make sure they get the credits quickly. So until we get further instructions, I’d go ahead and file since it’s free and only takes a few minutes.

Robin Hartill is a certified financial planner and a senior writer at The Penny Hoarder. Send your tricky money questions to AskPenny@thepennyhoarder.com.

This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.

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