AOC offers advice for young people to get around stimulus check exclusion

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Rep. Alexandria Ocasio-Cortez railed against a provision in the coronavirus cash assistance program that penalizes young people and offered advice on how to potentially get around that during a virtual town hall this week.

The one-time payments of up to $1,200 per person and $500 per child will help most Americans, but there are some exceptions that have frustrated the New York Democrat, including many young people between the ages of 17 and 24 being passed over.

"There are a lot of populations that are left out," Ocasio-Cortez said of the $2.2 trillion stimulus package President Trump signed into law on March 27.  "And one of the most left-out populations are young people, which has been an extreme disappointment."

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She added: "We fought for so much more in this bill because essentially there's this huge gap right now. And as we know, young people are some of the most economically vulnerable, especially when you're just starting off in your life."

In the virtual town hall hosted through her campaign Wednesday to help people apply for coronavirus relief benefits, Ocasio-Cortez explained the "gap."

Parents can get $500 per child of extra cash assistance, but only for children up to age 16.

And the young people, including many college-age students, can't get the $1,200 check individually if their parents have claimed them as dependents on their tax forms -- which means neither the young people nor their parents get extra help, she said.

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But Ocasio-Cortez offered some tips for a potential workaround. If a family hasn't filed 2019 taxes yet, they should consider not claiming their older children as a "fix."

"My personal piece of advice would be that if ... you have not yet filed in 2019, talk to the person who is claiming you as a dependent and figure out if your personal situation would be better if you all filed separately, or if it ends up being still being the best thing to do to file together. So make sure you have that conversation," Ocasio-Cortez said.

"If you think that that's a problem ... and you have not yet filed your 2019 return, you can fix it by filing your 2019 return as soon as possible," she added.

The progressive pol has been an outspoken critic of the stimulus bill for not going far enough to help hard-hit Americans, and she's called for greater reforms, such as Medicare-for-All, a rent moratorium, bigger direct payments and more.

Anil Melwani, a certified public accountant in New York, said Ocasio-Cortez identified a “loophole” that may be helpful to a small number of families, but generally, the tax benefit that parents get for claiming their dependent children, especially those in college, would likely outweigh the $1,200 dollars that a young person could get by filing independently.

“She did find a loophole that could help a very small percentage of the population,” said Melwani, of 212 Tax and Accounting Services in Manhattan. He cautioned that if a teenager files a $0 income tax return independently and receives a $1,200 check, the money will be part of a future 2020 tax return and could potentially need to be paid back.

"It’s not a check or direct deposit that just shows up and then disappears forever,” Melwani said. “It is going to be part of your tax return and people just need to keep that in the back of their mind.”

Young people are not the only ones excluded from the stimulus help. Wealthier Americans making more than $99,000 individually and immigrants without a social security number are also excluded.

The lack of help for teenagers and young adults is especially tough since they are disproportionately affected by COVID-19-related layoffs. Younger Americans tend to work in retail, food service, bars and restaurants, which have been shut down due to nationwide social distancing restrictions.

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The Pew Research Center found younger workers make up 24 percent of employment in these high-risk service businesses most likely to close down during the coronavirus pandemic.

"Among the 19.3 million workers ages 16 to 24 in the economy overall, 9.2 million, or nearly half, are employed in service-sector establishments," the Pew Research Center reported.