While we don’t know the exact stimulus control formula for determining the size of a third stimulus control (here is) until the , we expect in the first two stimulation rounds in 2020.
For example, under the new plan, a family of four could get $ 5,600, up from the maximum of $ 2,400 offered by thespread in December and January. Below we explain how it works. Meanwhile, here are the right now, including what’s happening as a This story is regularly updated.
This is how the stimulus check formula works
Before we get into how a possible third stimulus check can change the equation and what the outcome would mean for you, here’s how it works. In general,is one of the most important factors in determining your stimulus check total. The other factors include your adjusted gross income, or , and the stimulus control formula. You can if you have a to.
The main variables that the IRS puts into the stimulus formula are:
- Your per your
- Upper limits for single taxpayers, heads of household (for example, a single person with at least one child) and married couples filing jointly.
- Number you claim.
- “Decrease” or “Phase Out” – the amount that your total would decrease for every $ 1,000 you earn above the income threshold that would qualify you for the full amount of the check. In other words, this part of the equation calculates a partial payment if you don’t qualify for the full amount.
The third stimulus control could change the equation. This is what we know
The recent proposal to “ target ” the $ 1,400 incentive check would deter the highest earners from receiving a partial payment. If the proposal is passed, the qualifications will be:
- The full amount of $ 1,400 if you earn below $ 75,000 (single taxpayer); $ 112,500 (householder); $ 150,000 (married)
- Disqualified for $ 100,000 (Single); $ 150,000 (householder); $ 200,000 (married)
- The phase-out percentage has been increased to maintain this upper limit
- These high earners would not receive partial checks, even if they have dependents
The fine print for dependents is important to know
With the previous two incentive checks approved in March as part of the CARES Act and then in December, it was possible to get a partial payment even if you exceeded the maximum income limit – as you had dependents. For example, say a married couple with oneof $ 200,000 claims two dependents. With a $ 1,400 stimulus check using the previous formula, that family could still get a check for $ 600.
That’s because the previous formula starts with the highest amount you would be eligible for (say, $ 1,400 per single taxpayer or $ 2,800 for joint filers) and adds $ 1,400 for each eligible dependent. Then it lowers the total possible amount according to your AGI and the reduction percentage.
It’s a bit like starting a test with a perfect score of 100 points and subtracting every point you “miss” instead of starting with zero points and adding them all up at the end of the test.
But in this case, the dependents you mention can start you with a higher value, say 110 points in our class example. So by the time you subtract “points”, you can still get more than people who don’t have dependents – even if your AGI is above the maximum limit. The more dependent children you have, the higher your starting value and the higher your ending value.
The proposal to target stimulation checks would trigger a solid cut-off, meaning it would start evaluating your AGI. If you exceed the limit, it doesn’t matter how many family members you have. You still don’t qualify for a check.
On the other hand, a family with a large number of dependents and an AGI can still potentially receive a large partial payment within limits, as long as they fall below that absolute upper limit. You can
Phasing out and reduction rate: what you need to know
A sliding scale is involved in this. For example, during the second check whether youwere less than $ 75,000 if a single taxpayer (that means there are no children), you would receive the full amount If you made more than that, the size of your check would decrease to $ 87,000, after which you would no longer be eligible.
For the $ 1,400 stimulus check – note that this is subject to change – you may receive the full $ 1,400 if you earn less than $ 75,000 per year (your AGI as the sole taxpayer), with proceeds diminishing to a close of $ 100,000 . You would receive a partial check for an AGI between $ 75,000 and $ 99,900. Again, you can see the differences in our
For heads of household and married couples with dependents, these other members of the household are an important part of the equation – to some extent (see above).
To learn more, here are the top things to doAnd watch how and people who may also qualify, including families with