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In response to the challenges presented by Coronavirus (COVID-19), the U.S. government is taking several actions to bolster the economy, such as offering expanded unemployment, student loan relief, sending stimulus checks and more — a $2 trillion stimulus package to help individuals, families and businesses (was signed into law).
But how do some of these efforts work and who will they directly impact? Let's take a look at the 2021 stimulus checks, how they work, who qualifies, how to get one, and what’s new with your stimulus money.
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Coronavirus Stimulus Check: How Much? When? And Other FAQs
2. Who Is Eligible For A Stimulus Check
3. When Do Stimulus Payments Phase Out
4. How To Track Your Stimulus Check Payment
5. How To Claim Your Stimulus Money
6. What’s New With Stimulus Check
What Is A Stimulus Check
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A stimulus check is a check sent to a taxpayer by the U.S. government. Stimulus checks are intended to stimulate the economy by providing consumers with some spending money. When taxpayers spend this money, it boosts consumption and drives revenues at retailers and manufacturers and thus spurs the economy.
A stimulus check can be part of a larger federal stimulus package designed to support the economy, which was the case with the stimulus payments that were part of the Coronavirus Aid, Relief, and Economic Security Act (CARES) in 2020.
Who Is Eligible For A Stimulus Check
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U.S. citizens and resident aliens who meet income requirements and who cannot be claimed as a dependent on another person’s tax return are generally eligible. Income is based on your 2019 adjusted gross income (AGI). Individuals earning under $75,000 and heads of households under $112,500 typically qualify for the full $600 stimulus payment. Those married and filing jointly or surviving spouses earning under $150,000 usually qualify for a $1,200 payment.
If you exceed the income requirements, you may still receive a reduced stimulus payment, but the $600 payment phases out completely at $87,000 AGI for individuals and $174,000 AGI for couples filing jointly.
Qualifying Children
People with qualifying children will receive an additional $600 per child. However, children claimed as dependents who are 17 and older are not eligible for the child payment.
Adult Dependents
Unlike the first stimulus payment, adults who are claimed as dependents on another person’s tax return (such as a college student) aren’t eligible for a second stimulus check.
When Do Stimulus Payments Phase Out
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The payments will be reduced at the same rate as the stimulus payments from the CARES Act. However, because the payments are lower, the income levels at which they phase out is lower than it was for the CARES Act.
For individuals: Your stimulus check is reduced by $5 for every $100 you earned above the $75,000 AGI threshold. Stimulus payments phase out completely for this group at $87,000 AGI.
For married couples filing jointly: Your stimulus check is reduced by $5 for every $100 you earned above the $150,000 AGI threshold. Stimulus payments phase out completely for this group at $174,000 AGI.
For heads of households: Your stimulus check is reduced by $5 for every $100 you earned above the $112,500 AGI threshold. Stimulus payments phase out completely for this group at $124,500.
How To Check Your Stimulus Check Payment Status
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The IRS offers a Get My Payment tool in English and Spanish to check the status of both the first and second stimulus checks. The tool will offline for updates sometimes, but is anticipated to be available within a few days.
Stay on the status of your payment to determine when and how your payment will arrive.
How To Claim Your Stimulus Money
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The first step is to figure out how much in missing stimulus payments you'll need to claim on your 2020 tax returns.
The IRS, which began accepting tax returns on February 12, calls the checks "recovery rebate credits" on its tax forms. That's because, technically, the payments were actually tax rebates paid in advance of filing your taxes.
To help determine if you are owed more, the IRS published a Recovery Rebate Credit worksheet, which asks questions about eligibility (such as your income) and how much you received in the two stimulus checks so far. If you find that you are owed more, you can enter the amount on line 30 on IRS Form 1040. Free download the best PDF Reader Pro to fill out the form.
If you don't recall how much you received in the first two rounds of stimulus payments, you can create or view your account at the IRS website. Extra stimulus money will be included with your tax refund. Most taxpayers will receive their refund within 21 days, according to the tax agency.
Stimulus Check Latest Coverage
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What's currently happening with the third stimulus check? The tax agency said this week that it has sent more than 160 million checks — $1,200 for adults and $500 for children — directed by the Coronavirus Aid, Relief and CARES Act, which represented the first round of stimulus payments sent to most U.S. households. Starting in December, it also sent more than 147 million payments for the second round of checks, which offered $600 for each eligible adult and child.
To be sure, Congress is currently negotiating another round of stimulus aid, which could direct a third check to eligible households. If that $1.9 billion relief effort is passed by lawmakers, it could be signed into law by President Joe Biden by the end of March, Wall Street analysts say.
Anyway, you should keep an eye on this news and make sure you get yours in a timely manner and that you receive the correct amount of money. Good luck to you!
