What You Need to Know About the Third Stimulus Check

Chang Fu
March 8, 2021

What is the third stimulus check?

As part of Biden’s $1.9 trillion coronavirus relief plan, also called the American Rescue Plan, there is a third round of stimulus checks for most Americans. The $1,200 stimulus check in April 2020 and the $600 stimulus check in December 2020 were the first and second stimulus checks respectively sent to Americans previously. That means the third stimulus check, expected to be $1,400, is the largest stimulus check out of the three since coronavirus started.

How soon is the check coming?

The $1.9 trillion covid-19 stimulus bill has just been approved by the Senate and is going back to the House for final approval. The bill has undergone changes in the Senate version, and will need to get approved again in the House and signed into law by President Biden. This is expected to happen before mid March.

What that means is that the check is likely to be sent to Americans in mid-March. Expectations are that the Senate approved the 3rd covid 19 relief bill in the next few days and by March 14th, the bill will be signed into law. In fact, Senate Majority Leader Chuck Schumer (Democrat) vowed to pass the American Rescue Plan by March 14th, when existing unemployment insurance benefits plans are set to expire. After the bill is passed, the Treasury Department will begin sending checks out. Last time in December ‘20, the $600 stimulus checks started going out on December 29th, 2 days after President Trump signed the $900 billion stimulus package into law. With two previous checks now, we hope this third stimulus check will get to Americans faster than ever.

Those with direct deposit set up will get the money the fastest while checks and debit cards will be mailed out in the following weeks. However, a reminder that it’s tax season. The additional task of delivering stimulus checks might cause delays.

How much will the third stimulus check be?

The stimulus check is $1,400 per individual, including dependents, and $2,800 for married couples. It’s the largest payment yet but the income threshold eligibility requirements will differ from the first and second stimulus checks.

The eligibility requirements changed after the bill moved from the House to the Senate. In the original approved House version, individuals earning up to $75,000 per year in adjusted gross income (AGI) and married couples earning up to $150,000 per year would qualify for the full stimulus check of $1,400 and $2,800 respectively. The size of the stimulus payments would then decrease before phasing out completely at $100,000 AGI for individuals and $200,000 AGI for married couples.

However, the bill has changed while in discussion and after being approved in the Senate. The current proposal is that individuals earning up to $75,000 per year and couples earning up to $150,000 would receive the full $1,400 and $2,800 stimulus payments similar to before, but the phase-out would be much faster at $80,000 and $160,000 respectively. What does that mean? It means individuals that make between $80,000 and $100,000 a year and married couples making between $160,000 and $200,000 a year will not receive a third stimulus, which adds up to millions of Americans.

How is it calculated for individual and joint filers?

Below are a few tables showing the amount of the third stimulus payment depending on whether you file for yourself or jointly. In addition, we compare this third stimulus check versus the second stimulus check by adjusted gross income to show you how much you will get. There are a few important differences.

Single Filer Adjusted Gross Income (AGI) and Third Stimulus Check Amount

$75,000 (AGI) -> $1,400 stimulus check

$76,000 (AGI) -> $1,120 stimulus check

$77,000 (AGI) -> $840 stimulus check

$78,000 (AGI) -> $560 stimulus check

$79,000 (AGI) - $280 stimulus check

$80,000 and up (AGI) -> $0 stimulus check

Joint Filer Adjusted Gross Income (AGI) and Third Stimulus Check Amount

$150,000 (AGI) -> $2,800 stimulus check

$152,000 (AGI) -> $2,240 stimulus check

$154,000 (AGI) -> $1,680 stimulus check

$156,000 (AGI) -> $1,120 stimulus check

$158,000 (AGI) -> $560 stimulus check

$160,000 and up (AGI) -> $0 stimulus check

$160,000 and up (AGI) -> $0 stimulus check

Comparison of 3rd stimulus vs 2nd stimulus at different AGI Levels

Single Filers

$75,000 (AGI) - $1,400 for 3rd stimulus vs $600 for 2nd stimulus

$77,000 (AGI) - $840 for 3rd stimulus vs $500 for 2nd stimulus

$80,000 (AGI) - $0 for 3rd stimulus vs $350 for 2nd stimulus

$87,000 (AGI) - $0 for both stimulus

Joint Filers

$150,000 (AGI) - $2,800 for 3rd stimulus vs $1,200 for 2nd stimulus

$154,000 (AGI) - $1,680 for 3rd stimulus vs $1,000 for 2nd stimulus

$160,000 (AGI) - $0 for 3rd stimulus vs $700 for 2nd stimulus

$174k - $0 for both stimulus

Has eligibility changed for dependents?

The approved House bill, as it currently stands, expands eligibility of the third stimulus check to adult dependents, including college students and disabled adults. The age requirement has been removed by changing the definition of eligible dependents from qualifying children to qualifying child or relative.

What this means is that in comparison to the second stimulus check that gave out $600 per dependent under the age limit, the third stimulus check allows for $1,400 per dependent regardless of age.

Below are tables with examples of what the third stimulus check looks like for couples with 1 dependent and heads of households with 1 dependent in comparison to the second stimulus check.

Heads of Household with 1 dependent AGI and Third Stimulus Check Amount

$112,500 (AGI) -> $2,800 stimulus check

$114,000 (AGI) -> $2,240 stimulus check

$115,500 (AGI) -> $1,680 stimulus check

$117,000 (AGI) -> $1,120 stimulus check

$118,500 (AGI) -> $560 stimulus check

$120,000 and up (AGI) -> $0 stimulus check

Heads of household with 1 dependent AGI and Second Stimulus Check Amount

$112,500 (AGI) -> $1,200 stimulus check

$116,500 (AGI) -> $1,000 stimulus check

$120,500 (AGI) -> $800 stimulus check

$127,500 (AGI) -> $600 stimulus check

$132,500 (AGI) -> $400 stimulus check

$142,500 (AGI) -> $200 stimulus check

$146,500 and up (AGI) -> $0 stimulus check

As you can see, under the 2nd stimulus check, heads of households with one dependent making between $120,000 and $146,500 would still be able to receive between $0 and $800 while under the 3rd stimulus check, the heads of households with 1 dependent would receive nothing. However, once the AGI is lower than $120,000, the stimulus payment scales quickly to a much higher amount than the second stimulus check.

Has eligibility changed for “mixed-status” families?

First, what’s a mixed-status family? These are families where members have different citizenship or immigration statuses. For example, it might include undocumented parents as well as US-born children.

Under the current plan, qualifying couples get $2,800 in stimulus payments. However, in the case where one person does not have a valid identification number (defined as the Social Security Number or SSN), then the couple will only receive $1,400. If there is no valid identification number for either couple, then no stimulus check will be received.

Below is a table for how much a mixed-status family with 1 undocumented person will receive.

Mixed-Status Family w/ 1 Undocumented Spouse and Third Stimulus Check Amount

$150,000 (AGI) -> $1,400 stimulus check

$152,000 (AGI) -> $1,120 stimulus check

$154,000 (AGI) -> $840 stimulus check

$156,000 (AGI) -> $560 stimulus check

$158,000 (AGI) -> $280 stimulus check

$160,000 (AGI) -> $0 stimulus check

For comparison, mixed-status families did not qualify for the first stimulus check but did qualify for the second stimulus check. Unfortunately, “non-resident aliens” as defined by the IRS are not eligible to receive the third stimulus check.

What about those who receive social security and other benefits?

Similar to the first and second round of stimulus, those on Social Security retirement benefits, Social Security disability benefits, Supplemental Security Income (SSI), VA benefits, or Railroad Retirement benefits also qualify for the third stimulus check. The details are yet to be approved by the Senate and signed into law but it’s likely these qualifications will remain the same as the first two stimulus checks.

Will the third stimulus check be taxed?

Like the first and second stimulus checks, the third stimulus check will be considered an advance payment of the recovery rebate tax credit for the 2021 tax year. This means it won’t be included in your taxable income.

You also won’t be required to repay any stimulus payments when filing your 2021 tax return in 2022 - even if your third stimulus check payment is greater than your 2021 tax credit. If your third stimulus check payment is less than your 2021 tax credit, you will get the remaining difference when you file your 2021 tax return.

Also, note that the IRS will not use the stimulus payment to offset any state or federal tax debts like it does with tax refunds. Therefore, even if you still owe taxes, you can receive your third stimulus check.

Keep in mind that the IRS reduced payment from the first round of stimulus checks for past-due child support. Under the House-approved plan for the third stimulus check, this will not happen but the legislation may change before it gets approved by all of Congress and signed into law.

How will the third stimulus check be sent?

The Internal Revenue Service (IRS) will be sending out stimulus checks via direct deposit, paper checks, and prepaid cards. You can follow up on the status of your payment on the IRS Get Your Payment site.

Direct Payments - The bank account reflected on your last tax return will be used by the IRS to send your stimulus check to you. Some online banks like Chime may allow you to receive your stimulus check a few days earlier or give advances based on your stimulus check. Since the Cash App and other services may have routing and account numbers, you can also use these accounts to receive direct deposit of the third stimulus check from the IRS.

Paper check - For those without a bank account on file with the IRS or if you had the wrong account on file, you may receive a paper check in the mail. Paper checks take longer to arrive so you may be waiting a few weeks before getting your third stimulus check.

Prepaid cards - When the second stimulus in December ‘20 was sent out, 8 million people received prepaid cards from the IRS instead of paper checks. The cards are called Economic Impact Payment cards, or EIP cards, and were quicker for the IRS to process than paper checks. These prepaid cards were sent to the latest address on file.

Should I file my 2020 tax return early?

If your income fell in the 2020 tax year, you may want to file your 2020 taxes early to qualify for or get a higher third stimulus check.  If your income fell from $100,000 to $70,000, it could mean the difference between getting the third $1,400 stimulus check versus not getting one.

In contrast, if your income increased during the 2020 tax year, you may want to file your 2020 taxes later so that your 2019 adjusted gross income (AGI) is used to calculate your stimulus check.

In addition, you may consider filing early if the size of your family has increased in 2020. In addition, the current $1.9 trillion package includes an expanded child tax credit up to $3,600 per qualifying child under 6 years old and $3,000 for every child between the ages of 6 and 17.

The 2021 tax season started on February 12th and will end on April 15th. If you choose to file early, you can file as early as mid-February while if you choose to file late, you can file right before mid-April. For those expecting a tax refund, you can expect to receive it as early as the first week of March.

Will checks be deducted for child support?

As currently written, the covid relief bill does not allow your stimulus check to be garnished for overdue child support, unlike the first stimulus check-in April 2020. However, this seems to only apply for advance payments such as the stimulus check sent via direct deposit, mailed check, or a prepaid debit card. If for some reason you don’t receive the initial stimulus check and try to claim it using the Recovery Rebate Credit on your tax return, you may run into trouble. The final language is still to be determined.

Can a deceased person receive the third stimulus check?

Similar to the second stimulus check, if you receive a stimulus check for someone who has died, the IRS has a specific process that must be followed and you’ll need to return the check. The IRS requires that the payment issued to a deceased person be returned to the government. However, if the entire payment is made to a joint filer and one spouse has passed away, the spouse that’s alive needs to only return the portion of the payment made on account of the deceased person. This amount would be $1,200 unless your adjusted gross income (AGI) exceeds $150,000.

The IRS has specific instructions for returning stimulus check payments for someone who has died, whether that’s returning a paper check or returning a direct deposit.

Who doesn’t get the third stimulus check?

As mentioned earlier, there are many Americans who won’t receive the third stimulus check as part of the $1.9 trillion coronavirus relief package currently in the Senate for approval. Below are some groups that will not be receiving stimulus checks:

  • Income limit for individuals making over $80,000 per year in adjusted gross income (AGI)
  • Income limit for couples making over $160,000 per year in adjusted gross income (AGI)
  • Heads of households making over $120,000 per year in adjusted gross income (AGI)
  • A non-resident alien as considered by the IRS, which means you do not pass the green card test or the substantial presence test.
  • Certain US territories like Puerto Rico, Guam, American Samoa, etc. Please ask your local authorities
  • Deceased individuals

What else is in the $1.9 trillion stimulus package?

So is there other financial support and assistance for the American people in the stimulus package other than the $1,400 third stimulus check? There is and here’s what’s in it currently, as approved by the House:

  1. Child tax credit - fully refundable child tax credit for 2021, increasing the amount from $2,000 to $3,000 per child between age 6 to 17, and $3,600 for under the age of 6. These credits phase out for individuals making over $75,000 and couples making over $150,000.
  2. Housing assistance - there’s $30 billion in emergency rental assistance and an additional $5 billion for the homeless population. Lastly, there’s another $10 billion for mortgage assistance.
  3. Federal minimum wage increase - the House approved a version of the bill with a minimum wage hike from $7.50 to $15, but it likely won’t make the final bill signed into law
  4. Unemployment insurance - unemployment benefits are set to expire at the end of March and will instead be extended at $300 a week through October 2021. In addition, this covid 19 bill would provide a tax waiver of up to $10,200, which prevents those who get unemployment benefits to see a sudden tax bill.

I hope this summary of the $1,400 third stimulus check is helpful. If you’re in need of a fast friendly loan that builds credit on top of your stimulus check, please download the Possible app and apply for a loan with us. Finally, let us know at [email protected] if you have questions about the stimulus check or need help. We’re all in this together.

Chang Fu

Chang is an avid writer, among other things, at Possible. He grew up loving reading and writing, creating his own poems and even a book he's now hidden in an old closet, unpublished. His financial experience at a large bank along with his passion for technology to help underserved communities inspires him to write for Possible.

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