The $1.9 Trillion Stimulus Bill that includes the $1400 stimulus check finally passed in the Senate on March 6th, after hours of voting. The vote count was 50 votes for YES and 49 votes for NO. The bill now goes back to the House of Representatives for final approval by early as Tuesday, March 9th. If it passes, then it goes to the oval office to sign into law.
Who Is Eligible for $1,400 Stimulus Check
Below is the breakdown of who is eligible to receive the full stimulus check of $1,400 based on the latest tax return earnings: • Individual or single taxpayers earning $75,000 or less• Head of Household taxpayers earning $112,500 or less• Married Couples filing joint taxpayers earning $150,000 or less However, the new Senate plan narrowed the eligibility to exclude individuals who earn over $80,000, Head of Households who earn over $120,000, and Married Couples who earn over $160,000. This eliminates approximately 16 million taxpaying Americans from the $1,400 stimulus checks. This is based on study by Institute on Taxation and Economic Policy. Singles making between $80,000 and $100,000 and couples earning between $160,000 and $200,000 would be newly excluded from seeing any benefit under the revised structure Biden agreed to. Below is the Adjusted Gross Income ranges for phase out of the stimulus payments:•Singles phase out at AGIs between $75,000 and $80,000.•Heads of household phase out at AGIs between $112,500 and 120,000.•Married Couples phase out at AGIs between $150,000 and $160,000
Dependents
Each dependent child under 17 receives $1,400 per dependent child. Also qualifying dependent adults receive $1,400. Dependent adults are college students and disabled adults. But that amount could be reduced depending upon the adjusted gross income of the person claiming them on their taxes.
Unemployment Benefits
The Senate reduced unemployment benefits from $400 to $300 per week. In addition, unemployment payments up to $10,200 received in 2020, would be exempt from taxes.
Filing Tax Return
The US Treasury will calculate those who are eligible for the $1,400 stimulus check. It’s based on the 2019 and 2020 tax returns. The 2019 tax returns had to be filed by July 15, 2020. The 2020 tax returns are due on April 15, 2021.
The passing of the stimulus bill during the filing of the 2020 tax return, makes things a little complicated and confusing. Some people have filed already. If you have filed, and you received unemployment benefits in 2020, you will have to file an amended 2020 tax return to take advantage of the tax exemption of up to $10,200 of unemployment benefits. If you have not filed yet, wait until this bill has been signed into law.
If you have already filed your 2020 tax return, the US Treasury will take into account your latest tax return to see if you are eligible for the $1,400 stimulus check. This is important to note since if your 2020 taxable earnings is less than 2019, it may meet the threshold requirements to receive the stimulus check.
Child Tax Credit
The Senate also passed a $3,000 child tax credit for 2021, increased from $2,000 in 2020 for kids under age of 17 that you claim as a dependent, and has a social security number. The child must be related to you and has lived with you for at least 6 months. For children under age 6, receive $3,600 per child. In addition, the new plan also allows 17 year old children to qualify. It also allows half of the tax credit to be paid in advance. The IRS would send periodic monthly payments from July 2021 to December 2021.
Recovery Rebate Credit
Anyone who didn’t receive all or part of their first or second stimulus checks, or economic impact payment (EIP), must claim it as part of the IRS’ Recovery Rebate Credit on their tax return to get the funds owed. If you have a nonfiler status and aren’t typically required to file taxes, you will have to file to get the funds owed.
When Will We Receive the Stimulus Checks
The stimulus bill should be signed into law this week. If it is, the US Treasury may start processing payments next week. If you are setup with direct deposit, those will be sent first and received faster. If not, expect the EIP card or check in the mail which will take longer to process.
