As part of the American Rescue Plan set out by President Joe Biden, the $1.9 trillion stimulus package includes a third stimulus check to help compensate struggling Americans for the financial impacts of the COVID-19 pandemic. For many, this stimulus money is essential, so what can you expect?
Who Is Eligible For The Third Stimulus Check?
Currently, the bill for this third stimulus check sets out that eligibility will be determined by your tax filing status. If you qualified for the first and second stimulus checks, it is likely that you will be eligible for this third stimulus check, although high earners are now being excluded from this third round of checks.
If you are a single adult with an Adjusted Gross Income (AGI) of $75,000 or less, or a couple filing jointly with an AGI of $150,000 or less, you will be able to receive the full $1,400 payment amount. You will also receive the full payment amount if you are the head of your household (HOH) with an AGI of $112,500 or less.
Unlike the previous two checks, you will no longer be eligible if you have a single AGI above $80,000 or a joint AGI above $160,000 per year.
How Much Will I Get?
The maximum amount for this third stimulus check is proposed at $1,400 for tax-paying individuals or $2,800 for couples filing jointly.
Eligible dependents also qualify for an additional payment of $1,400 which, unlike the last two stimulus checks, includes young adults up to age 23 and adult dependents, such as senior parents.
As mentioned above, if you earn less than the minimum threshold, you will get the full stimulus check amount, and if you earn above the minimum threshold, you will receive a lower payment. If you earn anything above the maximum threshold, you will not be eligible for this third stimulus check.
When Will I Get It?
The timeline for this stimulus check is still taking place. However, House Speaker Nancy Pelosi aims to have the bill signed before 14 March 2021 as this is the date that federal unemployment benefits will expire.
Once the bill has been signed within The White House, the IRS will send out stimulus checks to all people eligible. As this is the third round of this process, you should receive your check within two weeks, although it could be much earlier. The second stimulus check started being sent out on 29 December 2020, which was only two days after the stimulus package was signed into law by President Trump. Hopefully, we’ll see this third stimulus check sent out just as quickly.
How Will It Be Sent?
The IRS will use your 2019 or 2020 tax return information to get the stimulus check to you by direct deposit, prepaid debit card, or a paper check. It is important that you make sure that the IRS has correct and up-to-date information so that you can be issued with your payment.
Will I Have To Pay Income Tax On My Check?
No. You will not be required to pay income tax on your stimulus check, or report it on your federal income tax return, as the IRS does not consider it taxable income.
Is There A Minimum Income To Be Eligible For A Check?
No, there is only a maximum income. You can receive the check regardless of your employment status.
When Is The Best Time To File My Taxes For The Third Stimulus Check?
The best time to file your 2020 taxes depends on how your income changed between 2019 and 2020.
If your income decreased in the 2020 tax year, you should file your tax return sooner rather than later, as lower-income ranges are targeted to receive the third stimulus check before higher income ranges. Filing your tax return as soon as possible with a low income means you are more likely to qualify for the full amount.
If your income increased in the 2020 tax year, it is best to delay filing your tax return (the deadline is 15 April 2021) so that your eligibility for the third stimulus check is based on your lower income of 2019.
If I Claim My College-Aged Child As A Dependent, Can I Receive Money For Them?
The new House Democrat bill expands the previous eligibility to adult dependents, which includes college students up to the proposed age of 23. If this stimulus plan is approved by the Senate, joint tax-filers and any heads of household will be eligible for an additional $1,400 for any dependent, including college-aged children and elderly in your care.
Do I Need To Do Anything To Receive My 2021 Stimulus Check?
No, it should come to you automatically, provided the IRS has up-to-date information about you. If you have moved or changed banks since you received your second check at the end of December 2020 or the beginning of this year, then double-check the information they have on you.
