Birth rates (copy)

An average of 1,995 babies were born each year at Mosaic Life Care between 2014 and 2018.

Chances are, another one will come into the world on New Year’s Day. This baby will be featured on the local news and feted with gifts of diapers, blankets and toys. It’s a story that never grows old. The first baby of the year symbolizes the vast potential of every living person and the hopes that all of us have for the next 12 months.

But on this day, let’s say a few words about the last baby of a dreadful year. Before midnight at the local hospital, a mother is likely to give birth to the final baby of 2020.

This bundle of joy might be seen as an afterthought, the one that came up short and missed the big prize, but don’t shed any tears for the child or the parents. They are laughing all the way to the bank.

In the eyes of the parents, all babies are perfect. In the eyes of the IRS, all babies are qualifying dependents, as long as they come into the world from Jan. 1 to Dec. 31 of a given year. Come tax time in April, Little Mr. or Miss 2020 will be in line for a $2,000 child tax credit, a benefit that’s available every year to offset the expense of raising a child. It’s just that the parents of a child born on Dec. 31 can take the credit one year earlier than the New Year’s baby.

“I had two babies born in December,” said Mary Scott, a certified public accountant in St. Joseph. “I was real happy about that.”

This time around, new parents might have even more cause for celebration because Congress approved two rounds of coronavirus relief that included direct payments to eligible children. A baby born in 2020 did not receive a COVID-19 relief check — either the $500 or the $600 per-child payments — because eligibility was based on the 2019 tax year.

But some sort of delayed stimulus benefit is in the cards because 2020 forms are likely to include reconciliation of 2019 income and tax status, which was used to determine relief funds, with the reality of 2020, which would include a new dependent for new parents.

Line 30 on the IRS Form 1040 includes something called a recovery rebate credit, which would in theory allow the parent of a child born in 2020 get a credit for a dependent born in 2020 who didn’t get a direct payment. Local accountants are waiting on more specific guidance, but Scott said a new parent should qualify for a larger refund in the event of stimulus underpayment. That would be the case for a child born during 2020 who didn’t receive a direct payment.

Even though 2020 wasn’t much of a year, it turns out it was a great time, at least from an accounting standpoint, to be born. It pays to not procrastinate.