Americans will start seeing the next round of stimulus payments hit their bank accounts as early as this weekend, White House press secretary Jen Psaki said Thursday. The payments are worth up to $1,400 per person and were included in the $1.9 trillion Covid relief bill signed by President Joe Biden earlier in the day. The time frame is in line with how fast the December payments went out, which started being processed three days after then-President Donald Trump signed the bill.
But the payments won't all go out at once. Those whose bank information is on file with the Internal Revenue Service will likely get the money first, because it will be directly deposited into their accounts. Others may receive paper checks or prepaid debit cards in the mail.
The money is expected to reach about 90% of families, according to an estimate from the Penn Wharton Budget Model. Families will receive an additional $1,400 per dependent, so a couple with two children could receive up to $5,600. Unlike prior rounds, families will now receive the additional money for adult dependents over the age of 17.
The full amount goes to individuals earning less than $75,000 of adjusted gross income, heads of households (like single parents) earning less than $112,500 and married couples earning less than $150,000. But then the payments gradually phase out as income goes up.
Lawmakers narrowed the scope of the payments this time so that not everyone who received a previous check will be sent one now. It cuts off individuals who earn at least $80,000 a year of adjusted gross income, heads of households who earn at least $120,000 and married couples who earn at least $160,000 -- regardless of how many children they have.
The first round of payments that went out last year were worth up to $1,200 and excluded individuals who earned at least $99,000, head of household filers with one child who earned more than $136,500 and married couples without children earning more than $198,000 -- but families earning a little more were still eligible if they had children. About 160 million payments were delivered, with 94% of families receiving the money.
The second round, which was worth up to $600, phased out a little faster because the full amount was smaller. It phased out entirely at $87,000 for single filers without children and $174,000 for those married filing jointly without children. Again, those earning a little more were still eligible if they had children. About 158 million payments went out, with 92% of families receiving them.
The new income thresholds will be based on a taxpayer's most recent return. If they've already filed a 2020 return by the time the payment is sent, the IRS will base eligibility on their 2020 adjusted gross income. If not, it will be based on the 2019 return or the information submitted through an online portal set up last year for people who don't usually file tax returns.
If your 2019 income was less than your pay in 2020, you will not owe back any money. But if your income fell in 2020, filing your tax return now -- before the payments go out -- may mean you'll get a bigger check.
Most people receive the payments automatically, but there are many who missed out -- for a variety of reasons. An estimated 8 million eligible people didn't get the first round of payments that were delivered last year.
Many of these people have very low incomes and are not normally required to file tax returns. Last year, the IRS set up an online portal where they could register for the money. It's not yet clear whether the agency will open up the portal again for the third round of payments.
People who have moved or changed bank accounts since the last time they filed tax returns may have also missed out.
Those who were due money during the first two rounds of payments and did not receive it can claim it as a tax credit, known as the Recovery Rebate Credit, on their 2020 tax returns.
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