More Details About The Third Round Of Economic Impact Payments
FS-2021-04, March 2021
The Internal Revenue Service, on behalf of the Treasury Department, worked to quickly begin delivery of the third round of Economic Impact Payments authorized by Congress in the American Rescue Plan Act in March 2021. Here are answers to some common questions about this set of stimulus payments, which differ in some ways from the first two sets of stimulus payments in 2020, referred to as EIP1 and EIP2.
Who Is Eligible For The Third Stimulus Check
While eligibility is similar to the first and second stimulus checks, there are differences. There are four primary requirements:
1. Income: The income requirements to receive the full payment are the same as the first and second stimulus checks. There is no minimum income needed to qualify for the payment. Households with adjusted gross income up to $75,000 for individuals will receive the full payment. The third stimulus payment starts to phaseout for people with higher earnings. The third stimulus checks maximum income limit is lower than the first and second stimulus check. Single filers who earned more than $80,000 in 2020 are ineligible for the third stimulus check.
View the chart below to compare income requirements for the first, second, and third stimulus checks.
|Income to Receive Full Stimulus Payment||First Stimulus Check Maximum Income Limit||Second Stimulus Check Maximum Income Limit||Third Stimulus Check Maximum Income Limit|
2. Social Security Number: This requirement is different from the first and second stimulus check.
Any family member that has a Social Security number or dependent can qualify for the third stimulus check. For example, in a household where both parents have ITINs, and their children have SSNs, the children qualify for stimulus checks, even though the parents dont.
See the chart below for further explanation of how this works.
How Do I Get Help Filing A 2020 Tax Return To Claim My Eip
The IRS recommends electronic filing, and we agree. It is a faster, more secure option. Paper forms will take much longer to be processed by IRS. You may qualify for free e-file software.
You can also call the Vermont 2-1-1 hotline and follow the menu options for tax preparation. Through this service you may be able to schedule an appointment with a free Volunteer Income Tax Preparation Assistance site. These sites are staffed by trained volunteers. They provide free preparation services to taxpayers who meet eligibility requirements.
Also, you can find Form 1040 and Form 1040 instructions on the IRS website. The instructions for the “Recovery Rebate Credit” are found on pages 57 – 59.
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The Irs Classifies Me As An Older Adult What Should I Know
Many older adults, including retirees over age 65, received a first stimulus check under the CARES Act and were eligible for the second one — and are for the third as well. For older adults and retired people, factors like your tax filings, your AGI, your pension and if you’re part of the SSI or SSDI program will affect whether you receive a stimulus payment.
The third stimulus check makes older adult dependents eligible to receive more money on behalf of the household. Here’s how to determine if you qualify for your own stimulus check or count as a dependent.
How much stimulus money you could get depends on who you are.
Stimulus Check For Unemployed
The most common emergency was jobs. Millions of Canadians were out of jobs because the lockdown left many companies with limited cash. The best business decision was job cuts and downsizing, leaving many people jobless or with pay cuts.
For such unemployed or an underemployed lot, the CRA is giving $2,000/month in the Canada Recovery Benefit for up to 38 weeks. It is only for those who do not have Employment Insurance and are not under any other COVID-19 benefit program. If you meet the other eligibility criteria, you can get up to $17,100 in stimulus checks.
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How Much Is The Third Economic Impact Payment
Those eligible will automatically receive an Economic Impact Payment of up to $1,400 for individuals or $2,800 for married couples, plus $1,400 for each dependent. Unlike EIP1 and EIP2, families will get a payment for all their dependents claimed on a tax return, not just their qualifying children under 17. Normally, a taxpayer will qualify for the full amount if they have an adjusted gross income of up to $75,000 for singles and married persons filing a separate return, up to $112,500 for heads of household and up to $150,000 for married couples filing joint returns and surviving spouses. Payment amounts are reduced for filers with incomes above those levels.
Who Is Eligible For The Third Economic Impact Payment And What Incomes Qualify
Generally, if you are a U.S. citizen or U.S. resident alien, you are eligible for the full amount of the third Economic Impact Payment if you are not a dependent of another taxpayer and have a valid Social Security number and your adjusted gross income on their tax return does not exceed:
- $150,000 if married and filing a joint return or if filing as a qualifying widow or widower
- $112,500 if filing as head of household or
- $75,000 for eligible individuals using any other filing statuses, such as single filers and married people filing separate returns.
Payments will be phased out or reduced — above those AGI amounts. This means taxpayers will not receive a third payment if their AGI exceeds:
- $160,000 if married and filing a joint return or if filing as a qualifying widow or widower
- $120,000 if filing as head of household or
- $80,000 for eligible individuals using other filing statuses, such as single filers and married people filing separate returns.
For example, a single person with no dependents and an AGI of $77,500 will normally get a $700 payment . A married couple with two dependents and an AGI of $155,000 will generally get a payment of $2,800 . Filers with incomes of at least $80,000 , $120,000 and $160,000 will get no payment based on the law.
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Which Tax Year Is Used To Determine Eligibility
The IRS will use the most recent tax return on file . Its issuing plus-up payments for individuals who now qualify for more money based on their 2020 tax return.
For example, if your income in 2019 was too high to receive a stimulus payment up front, but your 2020 income decreased to a level that would make you eligible to receive a full or partial payment, submit your tax return ASAP to be eligible for a plus-up payment. The IRS says it will continue to process plus-up payments on a weekly basis going forward as it receives 2020 tax returns . Tax Day has been pushed back from April 15 to May 17, 2021 so you have more time to file
Read more: Tax Season Will Look Different This Year. Heres What You Need To Know
On the other hand, if you think your adjusted gross income increased in 2020 beyond the point of eligibility for this stimulus payment but you would benefit from the financial relief, you may want to hold off on filing until after the payments are distributed You wont have to pay your stimulus check back to the government if you ended up making too much money in 2020 or 2021.
If you receive Social Security but didnt file a return in 2019 or 2020 because you earn too little to be required to file, youll also receive a stimulus check. The amount will be based on the information sent to the IRS on forms SSA-1099 and RRB-1099.
When Will I Get My Stimulus Check
The IRS has begun distributing stimulus payments. The first batch of stimulus payments could arrive as early as this weekend , with more arriving over the coming week. Further batches of payments will arrive during the following weeks.
For information on when you can expect your stimulus payment, check the IRS Get My Payment tool, which will be live starting March 15th.
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How To Claim Your Missing Third Stimulus Payment On Your 2021 Tax Return
Youâll need to request any missing third stimulus payments on your 2021 tax return by claiming the Recovery Rebate Tax Credit.
This is the case if you received a partial amount or didnât previously qualify for the third stimulus payment.
Letâs say youâre single and your income for the 2020 and 2019 tax years exceeds the threshold . However, you lost your job in 2021, so your income drastically decreased. You can now claim the Recovery Rebate Tax Credit since your earnings fell below the threshold.
Families that added dependents may also be able to claim the credit.
In addition, a few lingering taxpayers who file taxes using ITINs may not have received payments for their eligible dependents who have Social Security numbers.
You need to complete the Recovery Rebate Tax Credit worksheet and submit it along with your 2021 tax return. If you use a tax software program, it should guide you through the process. Keep in mind, the IRS predicted a frustrating and slow tax season this year, so file your return as soon as possible.
Before completing the worksheet, you must know the amount of any third stimulus payments received for you, your spouse, and any dependents. The worksheet will also request your adjusted gross income for the year to determine your eligibility.
The IRS started mailing Letter 6475 to taxpayers in Januaryâthe letter confirms the total amount of the third stimulus payments received for the 2021 tax year.
Fourth Stimulus Check Approval: Here’s What It’ll Take
The White House hasn’t responded to any of the proposals for additional stimulus checks, and the general sentiment is that a fourth stimulus check isn’t likely. Economists have suggested we’ve already moved past the pandemic’s worst financial woes, although there are signs that Americans could still use relief.
Experts certainly seem in agreement that there won’t be a fourth stimulus check. The latest stimulus package, the American Rescue Plan, is “gonna be the last on that front,” Deutsche Bank senior U.S. economist Brett Ryan told Fortune . “No more checks.”
Ed Mills, Washington policy analyst at Raymond James, agreed, telling CNBC recently “I think its unlikely at this time. D.C. has largely started to pivot towards the recovery and an infrastructure bill.”
Many economists and financial experts are worried that the third stimulus checks have contributed to a growing inflation rate. In June 2021, the core inflation rate, stripped of energy and food prices, rose 4.5% at an annual rate vs. the Dow Jones estimate of 3.8%. The overall consumer price index rose at an annualized 5.4% rate in June.
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If I’m Eligible For A Third Payment How Much Money Will I Get
There are several ways that qualifications change with a third stimulus check. The new law includes a payment of up to $1,400 for all dependents, no matter their age, to be added on to the household’s total. That means if you support an adult dependent — a college student, for example — you may be able to get a larger stimulus payment this round.
The expansion will provide money to households on behalf of an estimated 13.5 million adult dependents, according to the People’s Policy Project.
The new bill also loops in families with “mixed-status” citizenship, where members have different immigration statuses. Both of these groups were left out of the first and second stimulus payments.
One thing to note: The third check is more “targeted.” That means single filers who earn less than $75,000 will be eligible for the full $1,400. But those who earn $80,000 or more per year will not be eligible to receive a third payment at all. There are other ways some households can get more money with the next stimulus payment.
Which Tax Return Is Used For My Third Stimulus Check
The IRS uses 2019 or 2020 tax returns to determine eligibility for your third stimulus check. You should note that if your income fell in the 2020 tax year, filing your tax return earlier could help you qualify for a bigger third stimulus check. The new stimulus plan targets lower income ranges to exclude higher-earning taxpayers from getting a payment.
As we pointed out before, individuals making under $75,000 get the maximum stimulus payment of $1,400 . But payments are capped at $80,000 for single filers and $160,000 for couples. So filing at the beginning of the tax season with a lower income may help you qualify for a bigger check. But, if your income went up in tax year 2020, then you may want to delay filing so that eligibility is determined by your lower 2019 income.
You might also want to file early if the size of your family increased in 2020. The new stimulus plan includes a child tax credit that pays up to $3,600 for each qualifying child under 6 years old, and $3,000 for every child between ages 6 and 17. This means that if you became a parent during the tax year, you could get an additional payment by claiming your child as a dependent earlier.
SmartAssets child tax credit calculator will help you figure out how much you could get for each child.
You can use SmartAssets tax return calculator to figure out your 2021 tax refund or tax bill.
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Moved Or Changed Your Bank Account Information
If your bank account has changed, the bank will return the money and the IRS will issue a paper check to your last known address. If you have moved, make sure you set up mail forwarding with the United States Postal Service so you can receive any mailed check at your current address:
Learn more about free resources to help you file your taxes on our Tax Help page. Entering a bank account when you file taxes will help you receive your stimulus check faster. Learn more on our Banking Help page.
If I Owe Child Support Will I Be Notified That My Tax Return Is Going To Be Applied To My Child Support Arrears
Yes.You were sent a noticewhenyour case wasinitiallysubmitted for federal tax refund offset.The federal government shouldsend an offset notice toyouwhenyour stimulus rebate paymenthasactuallybeenintercepted. The noticewill tell youthatyourtax returnhas been applied toyour child support debtand to contactthe Child Support Divisionifyoubelieve this was done in error.
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Stimulus Check For Sick Workers
As the pandemic is a healthcare crisis, a sickness benefit is mandatory. According to the World Health Organization, a person who tested COVID-19 positive should self-isolate for 14 days to ensure they do not spread the virus.
And if you are feeling sick, even then WHO recommends you to self-isolate so you cant infect others until the COVID-19 test result is out. The second wave of the pandemic in December aggravated the problem. There is a mutant virus scare, and you can get infected even if you have recovered from COVID-19 and developed antibodies.
Warren Buffetts rule applies here too, be fearful when others are careless. Hence, the CRA is giving $900 for 14 days in Canada Recovery Sickness Benefit for up to four weeks. You will get this benefit if you are sick or under quarantine and do not have sickness benefits from your employer.
Will The Irs Tax My Third Stimulus Check
The IRS does not consider stimulus checks to be taxable income. This means that you do not have to report the money on your federal income tax return, or pay income taxes on your stimulus check.
You should also note, that if you owe taxes, you could still qualify to get a stimulus payment because the IRS does not use it to offset federal or state tax debts like it normally does with tax refunds.
For private debts, however, the American Bankers Association has pointed out a loophole in the new stimulus plan where banks and other financial services providers will be legally required to comply with court ordered garnishments. The association says that without legislation to shield your third stimulus payment, creditors or collectors can take it to pay off existing debt.
As a reference, the 2020 COVID-Related Tax Relief Act did shield stimulus payments from private debt collection: The Advance payments are generally not subject to administrative offset for past due federal or state debts. In addition, the payments are protected from bank garnishment or levy by private creditors or debt collectors.
But while your stimulus money could be taken to pay for private debt, the new offsetting rules prevent the IRS from deducting overdue child support from eligible recipients. You should keep in mind, however, that the IRS intercepted or reduced payment from the first round of stimulus checks for past-due child support.
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Who Would Be Eligible For The Third Stimulus Check
Families earning less than $150,000 a year and individuals earning less than $75,000 a year should get the full $1,400 per person. Families earning up to $160,000 per year and individuals earning up to $80,000 per year will receive prorated stimulus checks for less than $1,400 max.
Unlike the previous two rounds, you will receive stimulus payments for all your dependents, including adult dependents and college students.
I’m A Nonfiler Do I Have To File Taxes This Year To Receive My Stimulus Money
A nonfiler is a person who isn’t required to pay taxes to the IRS during tax season. The requirement to file a tax return depends on your gross income, which is all income you receive in the form of money, goods, property and services that aren’t tax-exempt .
People who are considered nonfilers don’t need to do anything to receive a third stimulus check, according to the IRS. However, if you’re claiming missing stimulus money in a Recovery Rebate Credit, even nonfilers will have to file a tax return this year. You may be able to use a special form and file for free. You will, however, need some specific information.
If you’re age 65 or older, you should file taxes under the following circumstances:
- Single filer with at least $13,850 in gross income.
- Head of household with at least $20,000 in gross income.
- Qualifying widow age 65 or older with at least $25,700 in gross income.
In the 2019 tax year, the IRS introduced Form 1040-SR, US Tax Return for Seniors. This form is basically the same as Form 1040, but has larger text and some helpful information for older taxpayers.
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