The Third Stimulus Check: Status Update

On Wednesday, March 10, Congress passed a $1.9 trillion coronavirus relief bill. After months of uncertainty regarding what kind of stimulus is coming, clarity has finally arrived. In addition to providing a $1,400 check for most Americans (income limits do apply), the American Rescue Plan will also provide additional unemployment payments, tax breaks for parents, and billions to state and local governments to help with economic recovery, COVID-19 testing and education. 

In this article, we’ll start with a list of quick facts that will be relevant to most individuals, then delve into more depth.

• If you make less than $75,000 as an individual or $150,00 as a couple, you will receive the full stimulus. That’s $1,400 per person or $2,800 per couple.
• For each dependent in a family, regardless of age, that amount will increase by $1,400.
• Unemployment payments will be boosted by $300 through September 6.

The current package includes a third round of stimulus checks in the amount of $1,400 for individuals and $2,800 for married couples.

Currently, single individuals with an adjusted gross income (AGI) of up to $75,000 will be eligible for the full $1,400. Married couples with an AGI of up to $150,000 will be eligible for the full $2,800.

Single individuals making up to $80,000 and couples making up to $160,000 will still receive a payment, but it will not be the full $1,400 per person. If your AGI is over $80,000 as an individual or $160,000 as a couple, you will not receive the third stimulus check at all.

For those filing as head of household, the payment will begin to phase out at $112,500 and will be cut off for those earning more than $120,000.

Eligibility will be based on your 2020 tax return, if you’ve already filed. If you haven’t filed your 2020 taxes, it’ll be based on your 2019 tax return.

According to the current plan, you can get $1,400 for each qualifying dependent, a significant increase from the $500 and $600 you received for each qualifying dependent in the first and second stimulus packages.

The amount isn’t the only thing to change. Under the current plan, qualifying dependents may include both child and non-child dependents, regardless of age. In past stimulus plans, qualifying dependents were children under 17 years of age.

Currently, parents are allowed to claim a $2,000 tax credit per child under the age of 17. The American Rescue Plan extends the age of eligibility for children by 1 year, to 17, and increases the credit to $3,000 per child ($3,500 for children under the age of 6). Half of any refund amount will begin to be paid out beginning in July 2021. The same eligibility requirements that apply to the stimulus payment also apply to the tax credit.

For lower-income individuals, this tax credit will be fully refundable. That means that every dollar of the child tax credit that goes above what an individual owes in taxes will be sent back to them as a refund.  

For example, if Jane owes $2,000 in taxes for 2020 and receives a $6,000 tax credit for her 9-year-old twins, she will receive a $4,000 refund. She would begin receiving half of this refund in incremental payments in July.

The government is now more experienced in sending out stimulus checks, so the process is likely to be faster than it was for the first check (for the first stimulus, it took about 2 weeks to begin sending money). In fact, direct deposit payments have already started going out. Experts predict that most Americans will receive their checks by the end of March.

During this time of cyclical unemployment, many are in need of additional unemployment benefits to cover basic living expenses. The third stimulus will add $300 to unemployment benefits until September 6.

The bill also offers a tax waiver on up to $10,200 of unemployment benefits for most Americans.

If you haven’t already done so, setting up a direct deposit account with the IRS is a good way to get your stimulus check faster than snail mail. Not only does traditional mail take longer than a direct transfer of money; the government also sends paper checks out in waves. This means that if you set up a direct deposit account, you could potentially get your money before the government would have even put the paper check in the mail.

To set up a direct deposit account, just select it as your refund method when filing taxes and supply both the routing number and account number of the bank account where you’d like to have the money deposited. Choosing a direct deposit for your tax refund will get that money in your hands faster, too.

A good way to monitor the progress of the payment once it goes out is to use the IRS stimulus check portal called “Get My Payment.” After providing your social security number, date of birth, street address and ZIP code, you’ll be able to see how you’ll be paid and when you can expect to receive your payment.

While another stimulus check can be helpful to many Americans, it may not cover every need. If COVID-19 has negatively affected you financially, emotionally or socially there are other sources of assistance as well. This guide to COVID-19 resources is a great place to start and offers information and tips for finding mortgage assistance, avoiding scams, protecting your finances and credit and staying connected to loved ones during this trying time.