Editor’s note, January 4, 2021: This article was last updated on April 15, 2020, and some details may no longer apply. Find Vox’s latest coverage of the second Covid-19 stimulus bill here.
Rachel Sherman lost her two streams of income seemingly overnight on March 19. California officials had implemented a statewide stay-at-home order, and the 23-year-old was working at a Los Angeles gym and restaurant — two nonessential businesses that were forced to close. Her two service jobs were helping to keep her afloat after her college graduation last May as she searched for career opportunities in journalism.
While Sherman filed for unemployment shortly after her layoffs in March, she was disheartened to realize she didn’t qualify for another form of financial relief — a $1,200 check as part of the federal government’s $2 trillion coronavirus stimulus package — because she was claimed as a dependent on her parents’ 2019 tax return.
”I’m getting some money for my unemployment benefits, but it’s nothing compared to what the stimulus check would’ve been,” Sherman told me. “I’m grateful I have a cushion for groceries and utilities, but it doesn’t really help cover my rent, which is $1,000 a month, or make me feel somewhat more secure.”
Sherman is one of the many people ages 17 to 24 who won’t be getting a check because of her tax filing status as a dependent. Under the coronavirus stimulus bill, or the CARES Act, most taxpayers will receive a one-time payment from the Internal Revenue Service: Those who earn $75,000 or less a year are eligible for a $1,200 check (or $2,400 for couples who filed jointly), with an additional $500 bonus for each dependent age 16 years or younger. However, families who have dependents in the 17-24 age group are entirely excluded from receiving any money for that child, including the $500 bonus granted to their younger kids.
So I’m not getting a stimulus check because I’m claimed as a dependent by my parents, but I’m also not counted for the additional $500 for dependents because I’m over 18 - so I’m just not counted in the stimulus at all? I don’t exist?— Collin Scott (@CoolinOblay) April 12, 2020
The economic fallout due to Covid-19 has ruined the finances of millions of Americans, and for many, the stimulus check is intended to provide much-needed, albeit temporary, relief. A Data for Progress survey of 2,644 people in early April found that 52 percent of respondents under 45 had lost their jobs, been placed on leave, or had their hours cut.
Still, the CARES Act excludes millions of people, including immigrants without a Social Security number, green card, or eligible work visas; elderly or disabled people who are claimed as dependents; and dependents ages 17 to 24. Critics of the bill, including proponents of universal basic income, say that establishing certain qualifications for a stimulus payment is a form of means-testing that hurts vulnerable people. Plus, a majority of taxpayers who qualify for the money say that the amount is inadequate to cover living expenses for more than a month.
The IRS defines a dependent as someone who relies on a benefactor for more than 50 percent of their expenses and earns less than $4,200 a year in taxable income. However, the age cut-off for dependent bonuses in the CARES Act is likely “a relic of the tax system” that has “an odd definition as to what a child is,” said Elaine Maag of the Urban-Brookings Tax Policy Center. Parents can receive up to a $2,000 tax refund for each child under the age of 17 each year they file thanks to the child tax credit established in 1997.
”This under-17 rule for the child tax credit is just a product of a budget process,” Maag told me. “There’s a certain amount of money that’s going to go into child tax credit, and whatever amount was chosen could cover kids up to 16.” By her estimates, there are about 4 million dependents ages 17 and 18 in high school who won’t qualify for the $500 bonus, and about 9 million who are under 24 and full-time students, most of whom won’t receive any money. (Maag acknowledged that a small percentage of that group might be married and are therefore likelier to file a joint tax return, which doesn’t categorize them as a dependent.)
Young adults, grappling with a recession and a depressed labor market in their future, are arguing that the stimulus package unjustly leaves out dependents who might also be taxpayers and workers with expenses of their own. Many are saying that any monetary support — either to a dependent or their parent — would be better than none, regardless of a dependent’s age.
”If their parents are getting $1,200 each and also getting $500 for each kid 16 and under, why are dependent 17-24 year olds not getting something?” one Twitter user asked. “Please explain to me, using the framework put forth that parents will pay, how providing no money to that age group makes sense?”
If their parents are getting $1200 each and also getting $500 for each kid 16 and under, why are dependent 17-24 year olds not getting something? Please explain to me, using the framework put forth that parents will pay, how providing no money to that age group makes sense?— Anthony (@AnthonyDDJ) March 28, 2020
Most young adults are categorized as a dependent to qualify for federal student aid or to receive health care benefits, even if they aren’t living at home or receiving all their money from their parents. On the Department of Education’s website, it states that a dependent’s parent is not required to pay anything toward a student’s education, and the tax status “is just a way at looking at everyone in a consistent manner.”
Some dependents ages 17 to 24 hold lower-paying, entry-level jobs, have less-secure housing arrangements, and struggle with student loan debt. They also tend to have more personal expenses than younger dependents, like car insurance or credit card bills. Data from the US Bureau of Labor Statistics for 2018 revealed that about 36 percent of youths aged 16 to 24 participated in the workforce (either part-time or full-time) while enrolled in school, compared to 79 percent of the same age group who are not in school.
A significant percentage of 18- to 24-year-olds are not in college or pursuing post-secondary education: Only 49 percent of US adults in that age range are enrolled in or have completed college, according to data from the Annie E. Casey Foundation’s Kids Count (Other data sets show a slight fluctuation in education participation rate). Some of these young adults might be considered independent if they earn more than $4,200 a year, but according to the Pew Research Center, only a quarter of them are financially independent from their parents by 22 or younger.
Still, given the level of workforce participation among 18- to 24-year-olds, millions of young Americans make their own money and could lose income in the face of skyrocketing unemployment. Furthermore, as a record number of people file for unemployment, some states are struggling to process the number of claims they’ve received. Unemployment websites and systems are crashing, and getting on the phone with any state’s office has proven to be a difficult and time-consuming task — which means there are likely more unemployed workers than those who have already filed for benefits.
Some of those will be dependents who won’t receive anything from the CARES Act. “Some of us are full-time students working jobs, trying to pay our bills on the little money that we have,” said Kyleigh Beck Rhone, a 21-year-old community college student in Arizona. “It’s frustrating because, just like other adults with jobs and bills to pay, we’re still seen as young children in the government’s eyes, despite how we pay taxes like every other working person in America.”
Beck Rhone had taken a semester off, working at a local gym to help pay her rent until she lost her job in March and didn’t qualify for unemployment. The $1,200 check would’ve helped a lot, she said, since she’s now pulling from her savings to pay any bills. The young adults I spoke to wanted to dispel the myth that all dependents, specifically college students, are privileged and have their education and expenses paid for — a stereotype that is clearly false. And for those who do lean on their parents for help, many are from working-class families who won’t receive any monetary bump for having an adult dependent.
Currently, there is no appeal process in place for any type of dependent, including recently employed graduates or workers who provide for themselves. Those who became financially independent in 2020, however, will eventually receive the stimulus money they’re owed in 2021 if they file their 2020 tax return, Maag said. Yet the promise of future money fails to alleviate the current stress and financial struggles plaguing most people. “I haven’t even thought about how I’ll pay next month’s rent because I just don’t know what’s going to change,” Sherman told me.
”What good is money in the future if my credit score is ruined and I can’t pay my bills?” said Jamie Agustin, a 23-year-old paralegal based in New Jersey who was a dependent in 2019. Agustin, who lives with her 17-year-old brother and parents, is clocking in significantly fewer hours at her firm and is worried that her family of four is only receiving $2,400 from the stimulus payment. Her father is also working less at his restaurant job, and her mother was laid off from her retail job.
”My brother is 17, but his age doesn’t affect how much money he’s costing my parents, so the age requirement is ridiculous,” Agustin added. “To me, means testing is just another way to deny people money that they need.”
Since mid-March, millions of college students have been displaced by the chaos of campus shutdowns across the country. While many have a home to return to, some students, particularly those who are low-income or housing-insecure, are struggling to find even basic resources, like a place to sleep and food, and have to rely on mutual aid primarily organized by other students.
Javan Smith, a freshman at St. John’s College in Maryland, is registered as a dependent to receive financial aid, and splits tuition payments with his father. Since he left home, he has primarily funded himself through a work-study job and had his meals at the school’s dining hall. At home, he says, “there isn’t a lot of leeway with money.”
”Maybe the majority of college students are being supported by their parents’ income, but that’s not my reality,” Smith, who’s currently working about 10 hours a week, told me. Due to a family situation, he’s currently stuck in Maryland after campus shut down and has moved out of his dorm into a house with five other students; St. John’s didn’t offer them housing.
”If I went back to Tennessee, I wouldn’t have a place to stay. I’m basically trapped in this city, and we all don’t have enough money to pay the $1,800 rent at the end of the month,” Smith said. “Even if we, as a house, received $1,000 a person, that’s about $5,000 in rent for a couple of months.”
For many, the stimulus check would’ve provided a crucial financial buffer for a month or two: Smith is starting an on-campus summer job in May that’ll give him more hours. Meanwhile, Sherman, who was laid off from her two service jobs, is worried that she’ll have to file as a dependent again on her 2020 tax return later this year.
”I might’ve been a dependent, but before this, I was making my own money, paying for my own rent, and being basically independent but not on paper,” she said. “As job opportunities continue to decrease, I might have to be a dependent again, at least for health insurance. It’s a weird limbo place to be in because I can’t get some money from the government.”