President Joe Biden's $1.9 trillion Covid-19 relief package, known as the American Rescue Plan, cleared the Senate Saturday. On Tuesday, the House will likely vote on the bill, sending it to Biden's desk for a signature by the end of the week. Once it clears those procedural hurdles, the vast majority of Americans should begin to receive a third round of stimulus checks.
In prepared remarks Saturday, the president said Americans will begin to receive direct payments starting in March. "This plan will get checks out the door, starting this month, to the American people who so desperately need the help," Biden said.
In order to get Senate approval, the president agreed to curtail eligibility for stimulus checks, making the income thresholds more stringent than the two previous rounds of economic impact payments. Still, over 85% of American households should get stimulus payments of up to $1,400 per person, according to the White House.
Here's who qualifies and when the payments are expected to be sent out.
In order to determine your stimulus check eligibility, the government would look at the AGI, short for adjusted gross income, on your most recent tax return on file with the Internal Revenue Service. If you've filed this year, that would be your 2020 tax return; if not, the government would look at the AGI reported in 2019.
This time around, individuals earning an AGI of less than $75,000 qualify for the full $1,400 payment. The threshold for individuals filing as head of household is $112,500, and $150,000 for couples filing jointly.
Americans would also be eligible for $1,400 per each qualifying dependent. More dependents are eligible to receive a check under the American Rescue Plan than under the last two rounds of stimulus packages. For the first time, 17-year-olds and adult dependents over the age of 18 would be considered eligible.
The change in dependent eligibility means college students, adult relatives, or any dependent a taxpayer claims on his or her return can qualify for up to $1,400 per person. The payment would be sent to the taxpayer, not the dependent. So if you're a family of four with a household income under $150,000, you should expect to receive $5,600.
Unlike the previous two rounds of stimulus, payments phase out quickly as your AGI rises. If you file as an individual and your income is $80,000 or more, you aren't entitled to a stimulus check. The cutoff for individuals filing as head of household is $120,000, and $160,000 for couples.
The change in eligibility will affect roughly 8 million individuals who otherwise would have gotten checks and could now see no payment, according to a quick estimate from the Urban-Brookings Tax Policy Center.
Use Grow's calculator below to determine how much stimulus money you could be eligible for.
The government plans to begin sending payments "starting this month," according to Biden. After the last round of stimulus checks was approved in December, the government was able to send out payments within a few days.
To ensure you get the full amount you're entitled to, "you want the IRS to have the most accurate information they can," says Elaine Maag, a principal research associate at the Urban-Brookings Tax Policy Center. For example, "If you had children move into your household between 2019 and 2020, you want to get that 2020 return in so that [the IRS knows] to deliver that economic impact payment for your dependents to you," Maag says.
Under the last two rounds of stimulus, taxpayers with direct deposit information on file with the IRS received their stimulus checks the fastest. Other taxpayers often received their money later, since payments were sent out by mail as either paper checks or debit cards formally called EIP (Economic Impact Payment) cards.
To make sure the IRS has your most up-to-date information, you can head to the tax agency's website.
Since the IRS has already sent out two rounds of stimulus payments, experts expect they will be able to issue stimulus checks quickly. But it is the middle of tax season, which could complicate distribution. As soon as Biden signs the bill, barring surprises, the government will reveal more details as to how quickly the payments would go out.
If you haven't had a chance to file your 2020 taxes and your income fell last year, you could be eligible to receive stimulus check aid in the form of a tax credit called the Recovery Rebate Credit. Filing your 2020 taxes can give you the opportunity to claim any aid you missed out on, says Janet Holtzblatt, senior fellow at the Urban-Brookings Tax Policy Center.
And if you received stimulus money, you don't have to give it back to the IRS at tax time even if your financial circumstances have changed, Holtzblatt says. "Let's say your income rose in 2020, your child left the nest, or you became a dependent on someone else's tax return: You're not going to have to give that money back."
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