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Home / Tips and Tricks / Details of the $ 1,400 stimulus check formula may change your payment. What that means

Details of the $ 1,400 stimulus check formula may change your payment. What that means


The stimulus check formula can change, which can turn the amount you receive into a third payment.

Sarah Tew / CNET

Next Friday, the House wants to vote on the COVID-19 relief proposal to help Americans as soon as possible. This is only one step in a lengthy process, as the bill must then go to the Senate for amendments, with the possible consequence that the third stimulus check looks very different from the first two incentive paymentsThe IRS uses a formula that determines how much your household gets: the payment amount is $ 1,400 per eligible adult and dependentThis can result in a larger payment or smaller), but you can also leave no payment at allHere’s a comparison of all three payments

An exact formula to determine your share in a third stimulus check is just being finalized Congress agrees and approves it the $ 1.9 trillion incentive billHowever, we can expect some people to be excluded due to targeted income limits suggested with the new bill – even if they received the first two checks. But some families could receive more checks with this round than with the last two.

If the new plan is approved unchanged, a family of four could get $ 5,600, up from the maximum $ 2,400 they received with the $ 600 second checkWe will further explain how it works below. To keep you informed, here are the the most important things to know about incentive payments today, including the timeline for receiving a third check and what happens if a third check is approved during tax seasonThis story is regularly updated.

Main things that make up the stimulus control formula

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, your tax return is one of the most important factors in determining the sum of your stimulus control. The other factors include your adjusted gross income, or AGI, and the stimulus control formula. You can qualify for a stimulus check if you have a non-applicant who does not pay tax to.

The main variables that the IRS puts into the stimulus formula are:

  • Your AGI per your 2019 or 2020 federal tax returns
  • Upper limits for single taxpayers, heads of household (for example, a single person with at least one child) and married couples filing jointly.
  • The number of eligible dependents 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.

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Stimulus Check # 3: What You Need to Know


The formula for a third stimulus check could still change. This is what we know

The recent proposal to “ target ” the $ 1,400 incentive check would stop top 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

It is important to know the most important details for dependents

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 one AGI of $ 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.

    coin measuring spoons

Measuring your stimulus check payment is not an easy task.

Angela Lang / CNET

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 cause 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 experiment with our stimulus calculator

Phasing Out and Reduction Rate: What You Need to Know About How a Targeted Payment Affects You

A sliding scale is involved in this. For example, during the second check whether you AGI was less than $ 75,000 as a single taxpayer (that means no kids), you should have received the whole amount stimulus check total $ 600If 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 $ 1,400 stimulus check calculators

For heads of household and married couples with dependents, these other members of the household are an important part of the equation – up to a point (see above).

To learn more, here are the top things to do know about stimulus controlsAnd watch how SSDI Recipients and Checks older adults and retirees and people who are not US citizens or Americans who do not live in the US may also qualify, including families with citizenship of mixed status

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