What to expect for next round of direct payments with the latest stimulus
$1,400 per person for 90% of U.S. households, White House says first payments may go out in late March
CEDAR RAPIDS, Iowa (KCRG) - With the U.S. House passing a $1.9 trillion COVID-19 relief package, another wave of direct payments to most Americans will be on the way.
With a Democratic majority in the House, the bill passed almost exclusively along party lines. President Biden is expected to sign the bill on Friday. The White House said Wednesday that Americans who receive money by direct deposit would be the first to see the payments as soon as later this month.
The math for this round of payments is relatively simple.
Using a calculator on CNN.com, a person filing as “single” would receive the full $1,400 direct payment with an income up to $75,100. Each dependent that that person would add another $1,400. For example, a single filer with an income of $54,000 with two dependents would be due to receive $4,200 in this round.
For taxpayers who file as “married”, simply double the variables. A married couple with an adjusted gross income up to $150,100 would receive $2,800. Add in two dependents for a total of $5,600 from the stimulus package.
There is a very slim but dramatic drop-off between $75,000 and $80,000 for single filers ($150,000 to $160,000) for married filers. A single filer with an income of $79,500 and no dependents would receive a payment of only $140. However, the $1,400 per dependent is not connected to the drop-off between $75,000 and $80,000.
The cut-off is $80,000 for a single filer, $160,000 for joint filers.
The income thresholds are determined from a taxpayer’s last return with the government. If the IRS has received a return from 2020, that will be the data that is used. If the latest return is from 2019, that will be what the government bases a direct payment on.
As with prior direct payments, expect people with direct deposit to receive the money first and others could receive checks or debit cards in the mail.
Another sharp difference in this round of direct payments is that taxpayers with dependents 17 and older will receive $1,400 per dependent, assuming the overall income threshold qualifies. This was not in place for the previous rounds as people with 18-year-olds or college students, for example, did not receive dependent payments even if they do claim them as dependents on their taxes.
Child tax credits are also increasing from the current $2,000 tax credit in the stimulus plan. For the 2021 tax year, families with children age 6 to 17 would receive a $3,000 tax credit. For children age 5 and under, that increases to $3,600 per child.
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