Before the last stimulus bill was passed, there was a last ditch move by both parties to increase the amount to $2,000 per individual. Instead, it went as written at $600 per person. Now, there is already talk of a third stimulus payment and this one would be for more than the last two – combined.
A Third Stimulus Check?
$1,400 Checks or $2,000 Checks?
Before Joe Biden was even sworn in as president, he was already talking about a third stimulus payment that would send $1,400 per qualifying person. This, when combined with the most recent $600 amount, would equal the $2,000 amount that Trump had tried to push for at the last moment. There are members in both parties that want this third stimulus payment to go out – will it? If so, how much will you get and when would you get it? Here is what we know about the direct payments from the “American Rescue Plan” as it is being called.
There is no question that there are still Americans that are struggling with many businesses still being in a lockdown situation. For sure, not all the Americans that have received the last stimulus payments are in the same boat and this is the major sticking point right now – whether to roll out big checks to everyone (based on adjusted gross income) or to make it more targeted based on need, job situation, etc.
How Much Could You Get from a Third Stimulus Check?
The number currently being thrown out there for the direct payments (as part of the larger $1.9 trillion stimulus plan) is $1,400 per person. As before, it is currently being aimed at the same income thresholds as before with a single filer with an adjusted gross income under $75,000 being eligible for the full amount while a couple filing jointly would need an adjusted gross income under $150,000 to receive the full amount.
The “full amount” currently being talked about is the $1,400 and that would be for each and every person that meets those income thresholds. This also would target those dependents who were missed in the last two stimulus bills, namely those that are 17 and older. In many cases, college-aged children are still claimed as dependents under the IRS code but were not eligible for the last payments. Because they were claimed as dependents on tax returns, they were also not eligible to receive the money themselves.
The problem with this amount is that key senators (that would be needed for the 60 votes to pass it) are saying it is too soon after the recent bill to talk about yet another one – especially one that costs the US government this much money. There is agreement that something needs to be done in terms of direct payments but the question comes down to how much and how to target it more to those that would be in a position to really need it.
For example, a couple with 3 children (making under the $150,000 of adjusted gross income) would receive $7,000 under this current proposal. This is regardless of their current employment status or financial situation. It is also regardless of what amount of their regular income this would equal or exceed.
When Would You See a Third Stimulus Check?
The most recent stimulus amounts of $600 per person was released in record time – at least, “record” referencing the only other stimulus payment like this. But, within two weeks, over 100 million payments had gone out following the signing of the stimulus package into law.
A third stimulus check, should one come, would likely not be seen before March, many experts agree. This is due to the haggling that would have to be done over the current package contents as well as those that feel it is too soon after the recent stimulus package to issue yet another one.
For sure, there is going to be some deal making and arguing over this package and analysts put the odds at 85% that this stimulus package would be passed before the end of March.
This would follow a similar schedule to the first package meaning most payments would go out in the first two weeks with checks following over a period of a couple of months. This means that, should this pass within this timeframe, many Americans could start seeing payments by the middle of April.
Would It Wait to Use 2020 Tax Returns?
There is one other note that I have not seen much talked about and I think bears some thought. The last stimulus package was based on 2019 tax returns. The first one was based on 2018 or 2019 returns, whichever was most recent.
With the tax window for 2020 returns being delayed a bit this year, I would not be surprised if they pushed this stimulus issuance out further also to accommodate 2020 tax returns. The reason for this would be that there were many who were either not eligible for received a much smaller amount based on their 2018 returns (or 2019 return).
But, there are many in that bracket would made over $75,000 AGI that had lost their jobs in the last year. By allowing 2020 returns to be eligible for this year’s stimulus package, it would enable those who had lost jobs and previously not received money to be eligible for the full amount this year.
Just in case, if you fit within that bracket of people, you may want to file electronically as soon as possible since this package, if passed in late March, would likely be for 2020 or 2019 returns, whichever is most recent.