President Biden signed the $1.9 trillion American Rescue Plan Act on March 11, 2021, which means a third round of stimulus checks are on their way to Americans.
Months of negotiation in the House and Senate have left many people wondering if they qualify for this round of stimulus payments, how that eligibility is determined, and what can be done to ensure payments are received.
Who is eligible for this stimulus?
While each adult and dependent will receive a $1,400 check this round, unlike the previous stimulus payments where dependents only qualified for $500 and $600 respectively, the income limits for this round of stimulus payments are stricter than the previous one. Kari Brummond, a tax preparer and financial writer for TaxDebtHelp, says, "To qualify for the full payment, individuals must have an adjusted gross income (AGI) of $75,000 or less, while couples filing jointly need an AGI of $150,000 or less and head-of-households need an AGI of $112,500 or less."
What about partial payments?
In this round of stimulus payments, partial payments will be available for those just slightly above the limits. Brummond says, "Taxpayers above these thresholds may receive a partial payment if they have an AGI of less than $80,000 for a single filer, less than $160,000 for married filing jointly, or less than $120,000 for head-of-households."
Who qualifies as a dependent for this stimulus?
During the last round of stimulus payments, some dependents were excluded from eligibility, such as high school students over the age of 16, college students still claimed by the parents, elderly adult dependents, and disabled adult dependents.
For this third stimulus payment, Tricia Tetrault, Senior Financial Analyst at Fit Small Business and The Close, says, "While previous stimulus payments did not account for adult dependents, the current proposal offers the same stipend for adult dependents as it does for dependent children."
Are there any tips for qualifying?
Since your most recent tax returns will determine your eligibility, there is no way around the income requirements for this round of stimulus payments. However, there may be some strategies you can employ to help you qualify.
You may consider either filing your current tax returns quickly or hold off on filing them until closer to the deadline, depending on your income status. According to Tetrault, "If you were previously ineligible for a stimulus payment based on your 2019 returns, but experienced a reduction in income in 2020, filing your 2020 tax return as soon as possible could benefit you."
This third stimulus payment comes at a crucial time for a lot of Americans: it's been one full year since the first lockdown of Covid, and many are suffering the financial impact of closed businesses, health issues, and even childcare and educational concerns. With the $1400 checks going to an estimated 85% of American households, the majority of taxpayers are eligible for the stimulus benefit.
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