Will There Be A Fourth Stimulus Check
Many lawmakers are pushing for another round, but President Biden has yet to express support.
Nearly two dozen Senate Democrats sent a letter to Biden on March 31 urging him to implement recurring payments and automatic unemployment insurance tied to economic conditions, reported Insiders Ayelet Sheffey. Some Democrats have taken to rather than stimulus checks.
And last summer, more than 150 economists wrote an open letter supporting recurring payments for as long as necessary.
Stimulus checks have proved effective thus far. The Economic Security Project released a report on April 14 that found the direct cash payments have played a critical role in fighting poverty, boosting small-business revenue, and increasing state and local revenues.
Evidence from the last year shows stimulus checks to be the fastest and most impactful investments helping Americans get through this crisis, lifting more people out of poverty than any other single policy, the report said.
The expanded child tax credit will also provide recurring cash payments to eligible parents during the second half of 2021. Democrats hope to make the expanded credit permanent. Learn more about the credit here »
How Is My Third Stimulus Check Calculated
The amount of your payment depends entirely on your adjusted gross income . Congress has set income limits to determine eligibility. Below we break down those requirements by tax filing status and AGI range:
- Single tax filers making less than $75,000 will get $1,400. Payments will decrease for AGIs over $75,000 until getting completely phased out at $80,000.
- Joint tax filers earning under $150,000 will get $2,800. Payments will decrease for joint AGIs over $150,000 until getting completely phased out at $160,000.
- Heads of household with an AGI under $112,500 get $1,400. Payments will decrease for AGIs over $112,500 until getting completely phased out at $120,000.
Because of the lower income limits, wealthier earners who qualified for the first and second rounds of stimulus checks may be completely excluded from getting a third stimulus payment.
Bottom Line: File Early But Dont Rush
The IRS says that electronically filing an error-free tax return is more important than ever this year, using either software, a tax professional or the agencys Free File program which is open to any individual who earns $73,000 or less a year.
Taxpayers should aim to create the least amount of obstacles for the IRS in reviewing their tax filing, says Tony Molina, CPA, product evangelist at Wealthfront. The more complications and obstacles you create for the IRS, the higher chance your return will be delayed. You should absolutely aim to file early, but not at the detriment of causing even more delays through filing errors.
Once you get all your required documents from financial firms and your employers, consider keeping them all in one place by creating a physical or digital folder, Molina says.
Even if you make less than is required to file a tax return , you could be leaving money on the table if you choose not to file. Individuals in this tax bracket will need to submit a return to claim any missing stimulus or child tax credit money.
Work with a tax preparer to make sure that you get your questions answered and avoid calling the IRS directly, as the agency says it is still handling a record number of calls with limited resources.
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Can I Contact The Irs For Additional Help With My Taxes
While you could try calling the IRS to check your status, the agency’s live phone assistance is extremely limited. You shouldn’t file a second tax return or contact the IRS about the status of your return.
The IRS is directing people to the Let Us Help You page on its website for more information. It also advises taxpayers to get in-person help at Taxpayer Assistance Centers. You can contact your local IRS office or call to make an appointment: 844-545-5640. You can also contact the Taxpayer Advocate Service if you’re eligible for assistance by calling them: 877-777-4778.
Though the chances of getting live assistance are slim, the IRS says you should only call the agency directly if it’s been 21 days or more since you filed your taxes online, or if the Where’s My Refund tool tells you to contact the IRS. You can call 800-829-1040 or 800-829-8374 during regular business hours.
How Will The Stimulus Checks Affect My Taxes
The IRS doesnt consider your stimulus checks taxable income. So you will not have to report them on your tax return or pay income taxes for them.
If you are an eligible recipient who didnt get the first or second stimulus check, you can claim a recovery rebate credit to increase your tax refund or lower your tax liability.
This means that if you expect to get money back on your 2020 tax return, you could get a bigger refund depending on how much stimulus money you are owed. And comparatively, if you have to pay a tax bill, you can use the recovery rebate credit to offset it and get a refund for the remaining amount.
Taxpayers this year will look to their tax refunds as another source of extra money during the pandemic. In 2020, the IRS paid out more than $2,500 for the average tax refund. This year, it is expecting over 150 million tax returns to be filed.
The 2021 tax season starts on February 12. You will have to file your 2020 tax return by April 15.
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So Who Gets A Stimulus Check
The bill will give up to $1,400 for most Americans who make up to $80,000 and couples making $160,000 will not receive a stimulus payment, according to The Washington Post.
- Individuals earning less than $75,000 and couples earning less than $150,000 will receive checks of $1,400.
- That means singles making between $80,000 and $100,000 and couples earning between $160,000 and $200,000 would be newly excluded from a partial benefit under the revised structure Biden agreed to, according to The Washington Post.
Related
Senate passes the COVID-19 relief bill. So how much money do you get?
Income Eligibility For Third
Like the previous two rounds of stimulus checks, the IRS will use your latest tax return to determine stimulus check eligibility.
Video by Stephen Parkhurst
The bill calls for $1,400 payments per individual, or $2,800 for married couples, provided they fall under certain income thresholds.
Individuals with up to $75,000 in adjusted gross income will qualify for full payments, as well as heads of household earning up to $112,500 and married couples who file jointly with up to $150,000.
The checks would be reduced for incomes above those thresholds and capped at $80,000 in income for single filers, $120,000 for heads of household, and $160,000 for joint filers.
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What About The Second Stimulus Check Amount And Dates
Congress approved another economic relief bill at the end of last year, and the second round of stimulus check payments began sending as early as Dec. 29, 2020. This payment capped out at $600 per person, and another $600 per qualifying child dependent. If you don’t have IRS Notice 1444-B and can’t find anything in your December and January bank statements, check out our handy stimulus check 2 calculator to get an idea of what you were entitled to and then head to the IRS website to get what you need.
What Type Of Credit Is The Stimulus Payment
The third stimulus payment is actually an advance payment of a refundable credit that will be calculated with your 2021 taxes .
If you made too much money in 2020 to get the full stimulus payment, but you end up making less income in 2021 than you did in prior years, you could get a stimulus payment as a rebate in 2022. Luckily, if you make more money in 2021 than you did in 2020, you will not have to pay back part or all of your stimulus payment in 2022.
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What Is A Stimulus Check
Stimulus checks are direct payments to American families that the U.S. government provided in response to COVID-19. Three stimulus checks have been paid out during the pandemic:
- The Coronavirus Aid, Relief, and Economic Security Act authorized the first check. It provided up to $1,200 per eligible adult and $500 per eligible dependent child.
- An additional stimulus check was authorized in December of 2020, providing up to $600 per eligible adult and dependent child.
- A third stimulus check of up to $1,400 per adult and dependent was made available by the American Rescue Plan Act on March 11, 2021.
Amount Based On 2019 Or 2020 Tax Return
For third-round stimulus payments, eligibility and amounts are based on either your 2019 or 2020 return. If your 2020 tax return isn’t filed and processed by the IRS by the time the tax agency starts processing your third stimulus payment, then the IRS will use information from your 2019 tax return. If your 2020 return is already filed and processed when the IRS is ready to send your payment, then your stimulus check eligibility and amount will be based on the information on your 2020 return. If your 2020 return is filed and/or processed after the IRS sends you a third stimulus check, but before August 16, 2021 , the IRS will send you a supplemental payment for the difference between what your payment should have been if based on your 2020 return and the payment actually sent based on your 2019 return. As a result, your third stimulus check may be higher or lower depending on when you file your 2020 tax return.
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Important: Make Sure You Have Your Agi
CNET’s stimulus check calculator tool is based on rules from the CARES Act that was passed in March, 2020. It’s intended to give you an estimate of what you should have received in your first stimulus check. To use the tool, you’ll need your adjusted gross income, or AGI, from your 2019 or 2018 tax information. You can find that figure on line 8b of the 2019 1040 tax form and line 7 on the 2018 1040 tax form.
Did You Get All Your Stimulus Money Check This Irs Letter To Make Sure
The IRS has finished sending out all the third-round stimulus checks. Learn how to make sure that you got all your money.
Every American who got a third stimulus check should receive IRS Letter 6475 in the mail.
On Wednesday, the IRS announced that it had disbursed all of the third-round stimulus checks from the American Rescue Plan, but you still could receive more stimulus money. One critical IRS notice you’ll need to get any additional money is Letter 6475, Your Third Economic ImpactPayment. It’s the official record of your “Economic Impact Payment,” or stimulus money, for 2021.
Most Americans received their full stimulus check payments in 2021. However, if you’re not sure, Letter 6475 will “help Economic Impact Payment recipients determine if they are entitled to and should claim the recovery rebate credit on their 2021 tax returns when they file in 2022,” according to the IRS.
In that third round of Economic Impact Payments, the IRS sent Americans more than 160 million checks of up to $1,400 per adult, plus additional amounts of $1,400 for each dependent. If you had a new baby or added a qualified child to your family in 2021, you’re eligible for an additional $1,400 for each new child.
Additionally, the third stimulus payment was based on 2020 taxes. If you earned less money in 2021, you’ll need Letter 6475 to claim any additional money from an adjusted recovery rebate tax credit on this year’s tax return.
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How Many Stimulus Checks Were Issued In 2021
Throughout the pandemic the federal government has sought to ease the financial consequences of covid-19 and the related restrictions by offering relief to Americans. This has been done in the form of the boosted unemployment benefits and the expanded Child Tax Credit, but by far the most far-reaching of those programmes has been the three rounds of stimulus checks.
First introduced in the CARES Act of March 2020, Economic Impact Payments are a direct cash injection into the bank accounts of individual people. As we approach one year since the last round of the payments was approved, we take a look back at the stimulus checks in 2021
Only one round of direct payments was distributed last year
2021 began with a change in the White House as President Biden was sworn into office, bringing with him an ambitious legislative proposal known as the American Rescue Plan. The bill comprised roughly $1.9 trillion of federal funding in total and while campaigning in the all-important Georgia Senate run-off election last January, Democrats vowed to pass a $2,000 stimulus check if they successfully retook the Senate.
BREAKING: Consumer spending rose 4.2% last month, the fastest pace in nine months, while incomes, boosted by stimulus checks, soared a record-breaking 21.1% in March. The gains offer more evidence the economy is poised for a robust recovery.
The Associated Press
When Will The Third Stimulus Check Be Sent
The goal of Democrats was to pass the bill by this Sunday, March 14. That’s when extra unemployment assistance and other pandemic aid expires.
With Biden signing the plan on Thursday, Democrats have met that goal.
White House Press Secretary Jen Psaki announced shortly after Biden signed the bill that the IRS and Treasury Department are working hard to get payments out and some people will see direct deposits hit their bank accounts as early as this weekend.
“This is of course just the first wave, but some people in he country will start seeing those direct deposits in their bank accounts this weekend and payments to eligible Americans will continue throughout the course of the next several weeks,” Psaki explained.
During the first round of stimulus checks in April 2020, it took about two weeks for the federal government to start distributing the money. It took around one week for the second round of checks, worth $600, in early January partly because the infrastructure from the first stimulus was in place.
One factor that could complicate things is that this is also tax season. The IRS will be trying to send out stimulus checks while also processing incoming tax returns and calculating refunds.
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The Latest On $1400 Stimulus Checks
This tax season, the government is also issuing a third tranche of third stimulus checks for up to $1,400 per individual, plus $1,400 per eligible dependent.
Last week, the IRS and other agencies said about 127 million checks have been sent to date, for a total of approximately $325 billion.
Those $1,400 payments are generally based on 2019 or 2020 tax returns, whichever was most recently filed and processed by the IRS. Those who used the IRS non-filer tool last year should also automatically get their payments.
There are also advantages to filing a 2020 return in order to receive the $1,400 payment, according to the IRS.
If your income dropped from 2019 to 2020, you could be eligible for a larger payment. The IRS has said it may potentially send follow-on payments to those people after their 2020 tax returns are processed.
Filing a 2020 tax return also lets you update your direct deposit information.
This tax season, non-filers are also required to file a tax return in order to get their payment, provided they have not already submitted their information to the government.
Of note, people who receive federal benefits such as Social Security, Supplemental Security Income, Railroad Retirement Board and Veterans Affairs will generally receive their stimulus checks automatically, though there have been delays in processing some of those payments.
How Likely Is A Fourth Stimulus Check
Dont hold your breath, according to Wall Street analysts.
For one, the Biden administration has focused on infrastructure spending to spark economic growth, betting that an investment in roads, trains and other direct investments will help get people back to work and spur the ongoing recovery.
Secondly, economists have pointed fingers at relief efforts such as the three rounds of stimulus checks for contributing to inflation. Because Americans had cash in their pockets, they boosted spending on goods such as furniture, cars and electronics. Combine that with the supply-chain crunch, and the result was sharply higher inflation, according to economists.
Without new stimulus efforts on the horizon, its likely that inflation could moderate in 2022, according to Brad McMillan, the chief investment officer at Commonwealth Financial Network. One cause of inflation has been an explosion of demand driven by federal stimulus, he noted in a December report. But that stimulus has now ended.
He added, Yes, we will continue to face inflation and supply problems, but they are moderating and will keep doing so.
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