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Home / Tips and Tricks / That $ 1,400 incentive check could actually be more “ targeted. ” Here’s what that means

That $ 1,400 incentive check could actually be more “ targeted. ” Here’s what that means



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What’s the problem with a $ 1,400 stimulus check? We will tell you why some think it is too high.

Angela Lang / CNET

When it comes to the size and scope of stimulus controls in front of COVID-19 Relief, there are three common views you hear among lawmakers: Make them big, make them ‘targeted’ or keep them coming back for the duration of the pandemic. President Joe Biden seems to be trying to hit the middle ground with one $ 1.9 trillion stimulus package right away third stimulus check in front of up to $ 1,400shortly before she was sworn in.

Well, there is a legitimate reason for people to say, ‘Did you draw the lines the right way? Should it go to someone making more than X dollars, or why? ” ‘Biden said on Monday about the $ 1,400 stimulus check figure. “I’m open to negotiating those things. But this is all a bit of a moving target in terms of the precision with which this goes.”

By indicating a willingness to sign an incentive bill with a smaller one third stimulus check, or one that goes to fewer people, Biden’s comment may spark a discussion about how big the next stimulus check is, or how it can be sent to fewer people in general. And further, how you do that while also working on recording two new groups that did not qualify for the previous checks. We’ll explain why $ 1,400 is fetching hackles and some possible ways a third stimulus check can be more targeted.

Why do some lawmakers think a $ 1,400 stimulus check is not the target?

The argument here is that a cap of $ 1,400 per person would send millions of incentive vouchers to people considered high earners – in addition to sending the full $ 1,400 cap to many tens of millions of people who fit in the right place that Congress wants stimulus money to deliver. For the sake of simplicity, these are some taxpayers with a adjusted gross income of $ 75,000 per year or less (and the equivalent for heads of household and married couples).

The reason that a limit of $ 1,400 can send checks to people making “too much money” comes down to the way stimulus controls have been calculated so far. The formula is written in the respective incentive accounts to provide a partial payment to people making more than the $ 75,000 per year threshold (up to a certain limit).

Watch the formula for the $ 1,200, $ 600 and proposed $ 1,400 checks, it is immediately apparent how increasing or decreasing the limit per person – eg, $ 1,400 versus $ 600 – could change how many people over the $ 75,000 income limit would get paid.

For example, use our $ 1,400 stimulus calculatora single taxpayer who earns $ 102,900 per year can receive a $ 5 incentive check. If they made $ 90,000 they could get $ 650, and with adjusted gross income of $ 85,000, the Treasury would send a check for $ 1,150.

By contrast, a Up to $ 600 stimulus awards a single taxpayer with an AGI of $ 80,000 a $ 350 incentive check. The same person who earns $ 86,900 a year will only receive a $ 5 check.

As a result, the current formula generally makes more people eligible for a stimulus check of a certain amount, even if it is a relatively small payment. Dependencies and husbands add one more layer – here it is more information, including a handy comparison table.

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When it comes to distributing money for stimulus checks, there is more than one option.

Sarah Tew / CNET

What if the third stimulus check ends up being less than $ 1,400?

One way that negotiators could send an incentive bill to fewer people in general would be to keep the formula unchanged, but lower the maximum per person from $ 1,400. The drop from the first stimulus payment of $ 1,200 to the second stimulus check of $ 600 people immediately disqualified who would have qualified differently for the first stimulus check. By simply using a base of $ 600 instead of $ 1,200, the cut-off point for receiving a partial payment was lowered.

In other words, the smaller the maximum per person, the sooner people who made more than $ 75,000 per year reached the limit to receive money.

With the first check, a single taxpayer – remember, not a spouse or children – could get a certain amount of incentive money if they made less than $ 99,000. With the second check, that vanishing point dropped to $ 87,000. The only difference in that part of the equation was the maximum pay per person. (Separately, dependent children counted for $ 600 in the second check instead of $ 500.)

Again, here’s a deeper explanation of the stimulus check formula (especially with kids) and here’s how calculate more variables in a possible check for $ 1,400.

What happens if the stimulus calculation changes?

Change the math to it stimulus check formula used for the first two checks would be a way to potentially limit the number of people who receive a check. By tweaking the formula so that people earning more than $ 75,000 a year would reach the vanishing point, lawmakers could hypothetically let lawmakers keep a maximum payment of $ 1,400 while sending fewer checks overall.

For example, with the current formula, a check for $ 1,400 would earn a person with an AGI of $ 80,000 per year a $ 1,150 stimulus check. An adjustment to the formula could potentially bring that figure down to $ 800 (to pick a random number) and so on. In effect, that would mean that people with relatively high incomes would get a much smaller check or no check at all.

What if Congress agrees on an arbitrary income limit?

Let’s say lawmakers wanted to send $ 1,400 to anyone who makes less than $ 75,000 a year, but didn’t want to send money to someone making $ 90,000 a year or more. Another hypothetical way to accomplish that would be to leave the stimulus checks formula as it is, but create an additional closure that would keep the IRS and the Treasury from sending checks to individual taxpayers with AGIs at $ 90,000 or higher.

Again, this is just one example, with negotiators working out details for married couples filing jointly, and those with dependents.

What about qualifications for new groups of people?

In addition to supporting larger stimulus controls, Biden also wants to record two previously excluded groups: dependents of any age (not just kids under 17) and stuff mixed-status families. Combined, that could potentially expand stimulus funds to nearly 20 million people who previously may not have been included in the family total.

If passed, the result would most likely be greater stimulus control for previously qualified families (in the case of 17 year olds and older adult dependents), and some mixed-status families who are eligible for a new check for the first time. In all cases, families would have to meet all other eligibility conditions – such as an income threshold – to receive a future incentive check.

Until then, we will have to see how the negotiations on the stimulus law and the third stimulus check develop. For more information, here it is current timeline for a third stimulus check and here’s what you need to know stimulus check qualifications. Here’s what to do if you miss all or part of your stimulus check.


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