This article was last updated on January 11
[Latest Update] President Trump has now signed the $900 billion COVID relief stimulus package into law despite earlier objections and last minute demands to triple the size of the stimulus/economic relief payment. He eventually signed the overall relief package due to Congressional and public pressure, not to mention the plight this would have placed millions of Americans into. This now means that the second round of $600 stimulus payments will be paid in the next week, possibly before the end of the year for millions of Americans. Payments will be made in batches by the IRS, so I expect payments to keep happening through to mid-January 2021.
2021 $600 Stimulus Check (COVID RELIEF Payment) Details
The second round of stimulus checks have been cut to $600 (singles) and $1200 (couples) versus the first economic impact payments of $1200 ($2400 for couples). This was done in order to keep the overall COVID relief bill price-tag to below $1 trillion to get passed through the Republican controlled Senate. The dependent stimulus check however was increased to $600 versus the $500 in the CARES stimulus package.
To be eligible for the full stimulus check payment eligible recipients will have to have earned less than $75,000 (150,000 couples). The stimulus check will fully phase out for singles with incomes below $87,000 and $174,000 for couples. Those earning above that amount will not be eligible for the stimulus check for themselves or their dependents. See the table below for the second stimulus check income thresholds (and earlier updates below for how this compares to first round of stimulus checks). Your second stimulus check qualifying income is based on your 2019 tax return for those who file a return. SSI and veterans will get this payment in the same way they got their first stimulus check.
Second Stimulus Check Income Thresholds
|2019 Tax Filing Status||Income Below Which FULL Stimulus is Paid||Maximum Income To Qualify for Partial Stimulus|
|Single or Married filing separate||$75,000||$87,000|
|Head of household||$112,500||$124,500|
|Married filing jointly||$150,000||$174,000|
When Will the New Stimulus Payments/Checks be made?
The IRS will be responsible for making these stimulus payment checks and Treasury Secretary Mnuchin, whose department oversees the IRS, said that payments go out within a week of the bill being formally approved. This means payments could hit bank accounts before the end of the year. Payments would be made in multiple batches and if all goes according to plan the first round of payments would begin on 12/28 (subject to bank processing). Processing will go until January 15th for Direct Deposit payments. Checks and Debit Cards will take until the end of January 2020 to get processed. See more on the IRS Stimulus Check Payment Schedule.
The inclusion of the one-time stimulus payment however has also meant a cut in extra unemployment benefits that are also part of the overall package. More to come as the bill gets finalized and I will post updates. See this $600 stimulus update video for a quick summary as well.
Here are some questions and answers around this new stimulus payment:
If I didn’t file taxes in 2019/2020 will I receive the stimulus (non-filers)? Unlike the first stimulus payment where those who didn’t need to file a tax return could update the IRS’ non-filer tool, this time around due to the speed of roll-out of the second stimulus check and with tax season around the corner the IRS has said the non-filer tool is closed for updates. The IRS will be using information they have as of Nov 21, 2020 or from your first stimulus check payment (if applicable). Otherwise they are encouraging you to the stimulus (known as a recovery rebate credit in tax terms) by filing a 2020 1040 or 1040-SR tax return. Free tax software programs can be used by people who are not normally required to file tax returns but are eligible to claim the credit.
How will I get paid? Like the first stimulus payment in 2020, the IRS will facilitate payment of these checks based on your 2019 tax information. You will also get the dependent stimulus payment for eligible dependents claimed on your tax return. For other groups who don’t file taxes the IRS will work with other government departments (e.g Social security agency for SSI recipients) or the Get My Payment tool. Direct deposit will still be the fastest way to get your payment.
How will I receive the payment in my bank account? If you’re eligible to receive a payment via direct deposit it will be deposited directly into the same account used when you filed your 2019 tax return and/or the account number used in the previous stimulus payment program. The payment will appear in your account summary as “IRS TREAS 310 XXTAXEIP2” or something similar. You can also check the IRS site for the latest status of your payment.
If you did not give the IRS your direct deposit account information through your federal tax return in the last two years, and have not provided the IRS with your information as a non-filer, you will likely receive a US Treasury check. The check will be mailed to the address on file at the IRS from the prior year tax return. It could take 5 to 6 weeks to get the check via mail.
Dependents in 2020? Households who added dependents in 2020 might not qualify for full payments immediately, since based on 2019 tax return information. But they can request additional money as part of the 2020 tax returns they will file in early 2021. See more in this articles for dependent qualification income thresholds.
Qualification Income thresholds changing? Income thresholds will stay in line with the original stimulus check levels, but the maximum limits have been lowered per the table above.
I heard the amount could be higher than $600? $600 is now the amount Democrats and Republicans have agreed to. While there are some members of Congress (including President Trump) wanted the full $1200 or higher $2000 payment, it would have made the overall stimulus package too expensive and unlikely to be approved by more conservative Republicans. However we may see a $2000 stimulus under the new Biden administration based on recent reports and I will post an update on that soon.
[Update following $908 billion proposed stimulus] Congress is back in session after a tough election cycle which enlarged the already wide chasm between Republicans and Democrats when it comes to agreeing on a new Coronavirus / COVID stimulus package. At this stage the main hope is that the lame-duck Congress (until January 2020) can approve an interim stimulus package ahead of a more comprehensive one during the Biden administration era.
As the pandemic and COVID outbreaks spread across the country there is increased pressure on Congress to pass some form of Stimulus relief package before the end of 2020. While there have been a few bills passed (e.g. HEROES act) that have passed one chamber of Congress, bipartisan support has been virtually non-existent. But this may be changing as the economic situation worsens. House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer have recently backed a $908 billion bipartisan stimulus plan (COVID ER Framework) that was put forward by a group of Senators. However, Senate Leader Mitch McConnell and House Majority Leader Steny Hoyer have only indicated limited support for this.
The one major issue with this bipartisan stimulus proposal is that it does not include funding for another round of stimulus checks. However the $918 billion proposal (from Trump/Mnuchin shown below) does have a stimulus check payment! As you can see from the table below, which shows the various areas being funded like extended unemployment benefits and COVID vaccination distribution, there is no line item for economic impact payments (a.k.a stimulus checks). This was a nearly $300bn line item under the CARES act, so a significant funding item. By cutting this, the bipartisan group of senators were able to bring the price tag to below $1 Trillion. Unfortunately this means no $1200/$2400 stimulus check and $500 child stimulus payment to over 80 million Americans.
[October 2020 update on latest negotiations] House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin (on behalf of President Trump) are working hard to compromise on a new $2 trillion pre-election stimulus deal that will include another stimulus check paid out this year. Per their recently passed bills in the house, there is still bipartisan consensus on a $1200/$2400 (single/married) stimulus payment along with an expanded $500 dependent payment. Any deal that is agreed upon will need to get Senate approval as well. But if all parties align, payments could come to millions of Americans by the end of the October/early November as the IRS is ready to process payments. I will continue to monitor this and update when new information is available.
[Congress Impasse] Congress continues to be at an impasse on agreeing to a stimulus package that would have included a second $1200 stimulus check. The main hold up is around the size of the stimulus package – Republicans want a smaller $1 to $1.5 trillion package vs $2.2 trillion stimulus package that Democrats recently passed. Until this is resolved and the political ping pong stops, another stimulus check payment won’t be made.
[Second Stimulus Check Update] Congressional leaders have agreed in principle that a second stimulus check will be paid in 2020, given the ongoing economic fallout from the COVID crisis. This CARES 2 economic impact payment (a.k.a stimulus check) will be part of the next stimulus package, which is still under review due to several other politically contentious items (like an extension of unemployment benefits). However another round of one-time stimulus check payments seems to be agreed upon by Republicans and Democrats, and the general consensus is for a $1200/$2400 payment in August.
Some proposals had the stimulus check as low as $600, all the way to a recurring $2,000 monthly payment! Income eligibility levels are also set to remain the same as the first stimulus check (detailed below) and based on 2019 or 2018 tax returns. Further another $500 child stimulus payment will also be made and will be expanded to cover those under 24 (versus under 17 in the first stimulus payment), so high school and college age dependents would be covered.
The stimulus payments are expected to be paid soon after the final stimulus package is approved by Congress and the White House. The first round of checks was plagued by problems as the IRS had to update systems, account for non-filers and work with several other agencies to verify payments. Luckily that is now in place so I expect the payments to be much more efficient this time around and hit most people’s bank accounts by late August.
For those waiting for their first round of stimulus payment, the IRS is still recommending these be claimed in their 2020 tax returns filed in 2021. This would also apply for those who don’t receive their second stimulus check.
[June 2020] The $2 trillion dollar stimulus bill (CARES act) has now been signed into law. Under this bill there is the widely reported economic stimulus payment checks of $1,200 per adult and $2400 for couples. For families they would provide $500 for every eligible child. The full stimulus check would be made to those earning less than $75,000 ($150,000 for couples) and would phase out to zero for those earning more than $99,000 ($198,000 for couples). Head of household tax filers will get the full payment if they earned $112,500 or less.
In the phase out range (i.e. between $75,000 and $99,000 for singles) for every $100 you earn above the lower limit ($75,000) payment drops by $5 until you reach the maximum limit ($99,000).
Example (single) – If Brian made $67,000 last year based on his latest filed tax return, he would get the full $1200 payment. If he had made $90,000 he would only be eligible for $450 ($1200 – $750). If he had made $110,000 he wouldn’t be eligible at all.
|2019 or 2018 Filing Status||Income Below Which FULL Stimulus is Paid||Maximum Income To Qualify for Partial Stimulus|
|Single or married filing separate||$75,000||$99,000|
|Head of household||$112,500||$136,500|
|Married filing jointly||$150,000||$198,000|
Example (married) – My wife and I made $185000. We filed jointly. Are we eligible to get anything from the 2020 stimulus? Answer – You would be eligible to get $650.00 (partial amount) under the direct payment program. Up to $150,000, you get 100% of the $2,400 stimulus payment. Anything over 150,000, you would subtract 5% of the amount over $150,000. So in your scenario, 35k over 150k. 5% of 35k is $1750, So $2400- $1750=$650.00
In addition to the above income limits to qualify for the $1200 or $2400 Economic stimulus check (or economic impact payment per IRS), recipients must have a valid Social Security number and cannot be claimed as a dependent of another taxpayer,
Roughly three-quarters of people who are eligible for a $1,200 stimulus payment from the federal government have received it, according to the Treasury Department.
The IRS has said that distribution of economic impact payments is nearly 75% complete and will be distributed automatically, with no action required for most people. People with the lowest incomes will get their checks first and should already be seeing these payments in their accounts. Actual check payments take longer. The IRS also has a tool to check payment status, but be warned that this has been having issues providing accurate data and payment status. Millions of Americans have also started receiving their IRS Economic Impact Payment (EIP) letters outlining details of their stimulus payments. It provides details of the payment and a number to call, but don’t get your hopes up. At least not at this point. The number is just an automatic system giving a long message about what and who qualifies, and there are options to listen to more messages but that’s it.
If you haven’t already make sure you file your tax return (deadline extended to July 15, 2020) to ensure you get the 2020 stimulus check payment in addition to the extended and additional UI benefits. You can file for free at Turbotax and even at the IRS if you make below certain income limits.IRS Economic Impact Payments
Child or Dependent Qualification for the $500 payment?
Several readers have asked questions around the $500 child dependent additional stimulus payment. To get this payment you must have filed a 2018 or 2019 tax return and claimed the child as dependent AND the child must be younger than 17-years-old at the end of 2020. They must also be related to you by blood, marriage, or adoption (similar to the Child Tax Credit). There is no limit to the number of dependents who can qualify for the additional $500 in one household.
This age limit is much younger than what is used by the IRS in the qualifying child test where a child must be younger than 19 years old or be a “student” younger than 24 years old as of the end of the calendar year. Hence the confusion being caused by this. So just remember if your child or eligible dependent is 17 or over you cannot claim the stimulus payment for them.
College Kids and High School Seniors
The younger than 17 yr old requirement has ruled out several thousand college students and high school kids who are older than 17, but still being claimed as a dependent by their parents on their federal tax return.
However if you are a college student AND filed a recent tax return you can qualify for a standard/adult stimulus check per the above eligibility rules. But note as soon as you file a return you cannot be claimed as a dependent by others, which means they lose certain other tax benefits and credits.
What about on Social Security or SSDI (Disability)?
Social Security recipients, disability (SSDI), Survivor Beneficiaries and Railroad Retirees who are not otherwise required to file a tax return will also be eligible for the stimulus payments, as long as their total income does not exceed the eligibility income limits above. The IRS in conjunction with the Treasury and Social Security Administration announced that recipients of Supplemental Security Income (SSI) will automatically receive the $1200 Stimulus Check (formally called Economic Impact Payments). See details here. This group of recipients will receive the stimulus check the same way they currently get their federal benefits in early May with no further action needed on their part.
However note that because the IRS has no information regarding dependent data for this group of recipients, the $500 kid dependent stimulus payment would not be automatically paid to this group. They need to use the non-filers tool on the IRS website to claim this.
How will the Stimulus check payments be made by the IRS?
[IRS Updates] – The IRS has confirmed that payments for most working Americans are expected to be calculated and deposited or mailed via check based on 2018 or 2019 federal tax filing payment details. Most people won’t need to take any action and the IRS will calculate and automatically send the economic stimulus payment to those eligible. The Treasury department, under which the IRS falls has also created a website/portal for those who are not required to file U.S. income taxes or who have to change payment information (e.g direct deposit information).
For those who have not yet filed their return for 2019, the IRS will use information from their 2018 tax filing to calculate the payment. The economic impact payment will be deposited directly into the same banking account reflected on the last valid return filed. So if your 2018 information is out of date or your income situation changed in 2019, make sure you file, even if you have no taxes due (start filing for free with TurboTax).
2020 Stimulus Check Payout Schedule
The IRS has confirmed that the distribution of economic impact payments (stimulus checks) has started and millions of Americans should have their stimulus check payment by now. Note that this will likely only apply to those receiving the payment via direct deposit (in line with how they get their tax refund or Social security check today). You can see the status of your stimulus check payment on the IRS Get My Payment portal.
- Direct Deposit payments will generally be deposited 2 to 3 days after the IRS confirms income eligibility for the payout.
- Physical checks will take at least 6 to 8 weeks to be mailed out.
Social Security Retirees and Disability recipients who are eligible for the payment will get the stimulus checks/payments deposited the same way they currently get their payments.
Given over 120 million Americans could be eligible for the payment, it will take a while to process the stimulus checks.
Stimulus Check Missing Payment Issues or Errors?
The IRS will also be mailing Stimulus Payment letters to each eligible recipient’s last known address 15 days after the payment is made. The letter will provide information on how the Payment was made and how to report any failure to receive the Payment. Note that the IRS or other government departments will not contact you about your stimulus check payment details either.
Why didn’t I get a stimulus check? Remember that the IRS has to have your direct deposit details, which is normally only provided if you received a 2018 or 2019 refund. If you file a return and they cannot use their portal to add direct deposit details, then your payment will come via check which could take several weeks. At this checks will likely start arriving at your IRS registered address from the end of April.
Finally you will also likely be able to claim any missing payments in your 2020 tax return as a tax credit. All this unfortunately will mean delays in getting your stimulus payment until issues are worked through.
How will child support arrears and payments be impacted with stimulus check?
I seem to be getting a lot of comments on this question around child support. The IRS has confirmed (see q21) that the stimulus check payment will NOT be offset or intercepted for those owe tax, have a payment agreement or owe other federal or state debts. It will however be OFFSET for past-due child support. This is because a court order for child support continues until it is modified or terminated. Similarly with unemployment compensation stimulus increases, your child support may be withheld from the UI payments. You will get a notice from BFS if this happens.
Injured Spouse Claim and Spousal Claims
The IRS also stated that If you are married filing jointly and you filed an injured spouse claim with your 2019 tax return (or 2018 tax return if you haven’t filed your 2019 tax return), half of the total payment will be sent to each spouse and your spouse’s stimulus check payment will be offset only for past-due child support. There is no need to file another injured spouse claim for the payment. I have received dozens of comments on this this, so hopefully this answers the questions many have had based on official IRS guidance.
Note that if you were current with your child support payments at the time of the stimulus eligibility determination (end of March) but fell behind afterwards due to a COVID-19 related job loss, you would still be eligible to get the full stimulus payment.
Updating Direct Deposit Information
This question has come up a lot in the hundreds of comments to this article. The IRS has setup a portal for individuals to provide their updated banking information to receive payments via direct deposit as opposed to checks in the mail. The IRS does recommend that 2018 Filers who need to change their account information or mailing address, file 2019 taxes electronically as soon as possible. That is the only way to let us know your new information. You can file for free via TurboTax.
If your bank account details changed, was closed or no longer active (so payment is rejected by the bank) a check will be mailed to the address the IRS has have on file for you based on your most recent tax return or as updated through the United States Postal Service (USPS). You cannot call the IRS to update payment or address details at this point in time.
Do I have to pay taxes on my stimulus payment?
No. Since the stimulus check is considered a refundable tax credit, it is not classified as earned income. Hence not considered taxable income you will have to report in your 2020 tax return (filed in 2021). It also won’t affect your income for purposes of determining eligibility for federal government assistance or benefit programs.
This payment also does not have to be paid back if any over payment happens or your gross income in 2020 changes. This includes your income rising to above the qualifying thresholds. If you unexpectedly got the payment, congratulations! You get to keep it now.
Returning Incorrect Stimulus Check Payments
A few people have commented that a spouse, relative or child who died since they filed a 2018 or 2019 tax return received a stimulus check payment. The IRS has provided official guidance on this issue which states that any payments made to someone who died before receipt of the payment should be returned to the IRS in full. The exception to this is for payments made to joint filers and one spouse who had not died before receipt of the Payment, in which case, you only need to return the portion of the Payment made on account of the decedent
Why you DID NOT Qualify for a Stimulus Check (Economic Impact Payment)
Several people have commented that they have not received or not gotten the correct amount on their stimulus checks. The IRS has provided the following reasons –
- Your adjusted gross income in your most recent tax filing approved by the IRS was greater than than the limits shown above, which are
$99,000 (single or married filing separately status)
$136,500 (head of household filing status)
$198,000 (married filing jointly status)
- You CANNOT be claimed as a dependent on someone else’s return. This includes as a child child, student or older dependent. (But those under 17 dependents can get a $500 dependent stimulus)
- You don’t have a valid Social Security number and/or are a nonresident alien.
- You filed Form 1040-NR or Form 1040NR-EZ, Form 1040-PR or Form 1040-SS for 2019. These are quick filing forms, but you need a standard filing (e.g via TurboTax)