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Home / Tips and Tricks / Stimulus Check Fine Print: A new formula could change your $ 1,400 payment

Stimulus Check Fine Print: A new formula could change your $ 1,400 payment



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The stimulus control formula that determines how much money you get seems likely to change for a third payment.

Sarah Tew / CNET

The most important factor in the size of your third stimulus check – and whether you get the payment of $ 1,400 much more much less or not at all – comes to a head in whatever equation is part of the finale $ 1.9 Trillion Incentive BillIt was true for the first two payments, and it is especially true for the upcoming check.

Again, the IRS will have to do that recalibrate the calculations on a set of variables that differ from the first two in important ways, such as certain ones Incentive Income Limits or which counts as a dependent (by the way, here’s how the new check is comparable to the $ 600 and $ 1,200 payments so far.) while the stimulation law is not yet a law – and the details on the control are subject to change – we have enough to continue from the version of the bill passed by the House of Representatives

If the new check is approved as is, a family of four could receive $ 5,600, up from the maximum $ 2,400 they received from the $ 600 second checkWe will further explain how it works below. To keep you up to date, here are the The Most Important Things To Know About Incentive Payments today, including the timeline for receiving a third check and what happens when and if one third check is approved during tax seasonThis story is regularly updated.

Stimulus Control Formula: Important Things to Know

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 your stimulus check total. The other factors include your adjusted gross income, or AGI, and the stimulus control formula. You still 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 Federal tax returns for 2019 or 2020
  • 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


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How the third stimulus check ‘targets’ your income

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 wouldn’t receive partial checks, even if they have dependents.

Dependents can multiply your check total

With the previous two incentive checks approved in March as part of the CARES law 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 qualify for (for example, $ 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 phase-out percentage.

It’s a bit like starting a test with a perfect score of 100 points and subtracting one point for each question you miss, instead of starting with zero points and adding them all up at the end of the test.

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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 trigger a solid cut-off, meaning it would start evaluating your AGI. If you exceed the limit, it doesn’t matter how many dependents 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 within limits can still potentially receive a large partial payment, as long as they fall below that absolute upper limit. You can experiment with our stimulus calculator

Phasing Out and Reduction Rate: Why They Matter and How They Work

This is a sliding scale. 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 $ 600Earning more than that would reduce the size of your check to $ 87,000, after which you would no longer be eligible.

For the $ 1,400 stimulus check – note this is subject to change – you could 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 $ 1,400 close. 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 family members are an important part of the equation – to some extent (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 could also qualify, including families with citizenship of mixed status


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