NEXT STIMULUS COULD BE SMALLER
February 18, 2021 - Douglas Myser
Next stimulus could be smaller. Republicans are trying to whittle down the next stimulus check. But due to promises made during his campaign, President Biden has stated the amount, along with the $600 already paid out, must total $2000. "That's what the American people were promised," President Joe Biden said during a White House event. But he also said this: "We need to target that money. So, folks making $300,000 don't get any windfall." A larger per person maximum mixed with new qualifications on income that could "target" a third stimulus check could result in lowering the total for some people this time around. Also, there may be additional life changes that could cause your third check to be reduced. Next stimulus could be smaller.
For the first and second stimulus checks, Congress used a similar formula to determine payment amounts, using the same income limits and rate at which payments phase out. We have calculators that can help determine the amount of your check. Using your Adjusted Gross Income, or AGI, Congress set these income caps, Head of Household who makes less than $112,500: Married couple filing jointly who make less than $150,000. For the third check Biden and Congress are considering reworking the formula. These would be the new income caps under the new agreement, Single IRS taxpayers who makes less than $50,000: Head of Household who makes less than $75,000: Married couple filing jointly making less than $100,000.
What that means is that while you may have qualified for a first or second check, at the same income level, you may receive a much smaller payment this time---if you qualify at all. Congress is reportedly also considering changing the rate you would phase out of a payment, to exclude higher earners sooner from receiving a payment. For the first and second checks Congress set a phase out rate of $50 for every $1,000 of income earned above the baseline. The first stimulus check was based on your 2018 or 2019 taxes, if you had filed them. The second check, approved by Congress in December, looked just at your 2019 taxes.
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