On March 6, 2021, the Senate passed an updated version of the American Rescue Plan (“the Act”). It provides direct payment of $1,400 to most individuals and $2,800 to most couples.
Direct payments are not being offered to individuals who make over $80,000 or couples who earn over $160,000. The entire $1,400 amount will go to individuals who make less than $75,000 and couples who make less than $150,000. Individuals and couples that fall in between those ranges will be offered something less than the $1,400.
How Much Stimulus Money Will I Receive?
This calculator estimates the payment you are likely to receive according to the version of the Act. Although still needing to pass the House, it is expected that President Biden will sign the Act into law by March 12, 2020.
In addition to the direct payments, the Act also increases the The term "child" would be a child that can inherit your personal property under state law. Including adopted child, equitable child, stepchild, dependent grandchild or step-grandchild in your care. More tax credit from $2,000 per child to $3,000 annually per child ages 6 to 17 and $3,600 annually per child under 6 for the 2021 tax year. As soon as July, the IRS is expected to begin providing monthly advances on the credit. The advances end up being $250 for school age children and $300 for pre-school age children. The remainder of the credit would be claimed on the 2021 tax returns.
“This plan gives those families who are struggling the most, the help and the breathing room they need to get through this moment.”
- President Biden in a statement Saturday
Like the direct payments of $1,400, these increased child tax credit begins phasing out starting with individuals earnings more than $75,000 and couples earning $150,000 and are completely phased out for individuals earnings $95,000 and couples who make $170,000.
Those that are ineligible for the increased credit are still eligible to claim the $2,000 per child credit. This original, but lower credit, is available to those making up to $200,000 and couples who make up to $400,000.
Are SSDI and SSI recipients eligible?
Like the first two stimulus payments, individuals who receive SSI and SSDI will receive the third payment automatically, as long as they have a The nine digit number given to you by the Social Security Administration. More, were not claimed as a dependent on someone else’s tax return and don’t exceed the income limitations mentioned above.
When will your stimulus check arrive?
The first checks should go out in March of 2021. The IRS will use the information it has on hand and used for distributing the first two checks to automatically distribute the third check. If an individual does not receive a check, but should have, they can expect to receive the funds when they file their 2021 taxes.
How will the IRS give you the funds?
The first two stimulus payments were distributed to almost all SSI and SSDI recipients either by bank account or as a paper check. There were some instances where SSI recipients who did not file taxes in 2019 received their stimulus check through Direct Express. You can expect to receive your third check in the same manner that you received the first two. The IRS already has this payment system set up and will almost certainly use it again.
Will I get a credit for my dependents?
Under the third round of stimulus checks dependents of all ages, including adults, are eligible for up to $1,400.
Will this impact my SSDI or SSI payments?
SSDI and SSI payments are taxable only when your countable income hits $25,000 for an individual or $32,000 for a couple. Once you hit that threshold, up to half of your benefit will be subject to taxation.
Individuals near those thresholds may be worried that these stimulus payments will push you over the edge causing some of your benefits to be taxable. You need not worry, these payments are treated like a tax credit and are not considered as countable income (or even income at all). It will not impact the taxability of your current benefits. You will not pay ordinary income tax on the money either.
Lastly, SSI recipients should know that this will not count as income when determining either your eligibility for SSI benefits or the total benefit you receive from the SSI program.
Be smart with your stimulus check
Although it may seem like we are all receiving quarterly stimulus checks from the government, it surely cannot last forever. Pay off any debts you have or save your check for an emergency. We should not expect another payment to follow.