With Democrats running the Congress aiming to get pandemic relief legislation on President Joe Biden’s desk by mid-March, a third stimulus check – this time for $ 1,400 – could take just a few weeks.
The new payments are included in a massive bailout package that is now headed for the United States Senate, after obtaining House approval on Saturday morning. Saying that “there is no time to waste”, Biden is asking the Senate for quick action.
How much your family will receive this time will depend on an IRS formula. The current proposal would provide up to $ 1,400 per adult plus $ 1,400 for each dependent, regardless of age.
Here’s what you need to know about how the tax agency will determine your payment and why filing your taxes earlier can give you an advantage in getting a stimulus check for the maximum amount.
How you will qualify for a complete stimulus check
To determine your eligibility for the third pending stimulus check, the IRS will use your most recent income tax return and focus on your adjusted gross income, which is your taxable income before subtracting the standard deduction or itemized deductions.
The plan now in the Senate would be to give a total payment of $ 1,400 to individuals with an adjusted gross income of up to $ 75,000. For family heads, the limit is $ 112,500 and $ 150,000 for couples filing joint actions.
These are the same income limits used for the first two stimulus checks. House Democrats joked about restricting full payment, this time, to individuals who earn less than $ 50,000, but ended up giving up.
The Senate could bring the idea back, because Republicans and some Democrats support lower income limits to ensure that checks reach only those most in need. How people used last spring’s first $ 1,200 stimulus checks varied by income, with the poorest families spending their money mainly on essential goods, including groceries and rent.
Others, making more money, used some of the money to save and invest – or to pay off debt, according to a survey by the US Bureau of Labor Statistics.
More family members will make money this time
For the next batch of stimulus checks, families that meet income requirements will receive $ 1,400 for each member of the family, including dependents of all ages.
In previous rounds, money was paid only to dependents under 17 – older teenagers and dependent college students were left out. And while adults received checks for $ 1,200 the first time, families received only $ 500 per child. Round 2 increased that amount to $ 600, the same as adults received.
Here is an example of what the changes would mean for a family of five that includes two parents and three young children: They will receive a total of $ 7,000 of the new stimulus check, versus $ 3,000 in the recent second round.
Families with dependents who have been disqualified in the last two checks will see an even greater increase. Let’s say your family is made up of two parents, a small child and an 18-year-old teenager. Your family of four can expect to receive $ 5,600 this time, against just $ 1,800 in the second round.
Who’s out of luck this time?
The third stimulus will be eliminated gradually in rents above the limits mentioned above. Smaller payments would go to:
-
Individual tax filers with adjusted gross income between $ 75,000 and $ 100,000.
-
Households with AGI between $ 112,500 and $ 150,000.
-
Couples who register with AGI between $ 150,000 and $ 200,000.
Taxpayers with income above the top levels will not receive any money this time.
How are you sure to get the most money? If your family income dropped in the past year due to the pandemic, you will want to log in to a good tax software product and get your 2020 return filed immediately. That way, the IRS will not depend on the higher revenue on your 2019 income tax return.
And if you need more money today?
With the third stimulus check still weeks away from your bank account, here are some ways to make a little space in your budget if you can’t wait and need more money immediately.
-
Reduce the cost of your plastic. Have you been struggling with your credit cards during the pandemic? Of course, sliding is easy, but interest will reach you in no time. Get your debt in order – and pay it off faster – by consolidating your debts into a single, lower-interest debt consolidation loan.
-
Make savings your policy. If you are not driving so much because of the pandemic, your car insurer can give you a discount on the rate. If your insurance company does not fold, break ties and look for a better deal. And while you do that, you can save hundreds on your home insurance by comparing rates to find a lower price for that coverage.
-
Refinance your mortgage (if you have one) and reduce your payments. Millions of homeowners in the United States could cut their monthly home payments by hundreds of dollars a month through a refi, mortgage technology and mortgage data provider Black Knight said in early February. Rates remain historically low, so refinance your current mortgage for big savings.
-
Reduce your budget and “make your own” stimulus check. By finding some creative ways to reduce, you can pull another $ 1,400 out of your current budget. For example, it may be time to discard streaming services that you are not watching. And download a free browser extension that will find the best prices and coupons whenever you shop online.