The American Rescue Plan Act of 2021 (American Rescue Plan) is expected to be approved by Congress and signed by President Joe Biden this week. This comprehensive economic stimulus package will, among other things, establish new grants for small businesses, extend unemployment benefits, expand the child tax credit, provide funding for state, local and tribal governments as well as schools, and issue another round of stimulus payments to millions of Americans.
In this third round of relief payments, however, some households may no longer qualify due to income threshold changes. Read the information below to see if you are still eligible for these stimulus payments.
What is the criteria for eligibility?
Individuals earning up to $75,000 (or up to $150,000 for married couples filing jointly) are eligible for direct payments. A phase-out range begins for single filers earning between $75,000 and $80,000 (or between $150,000 and $160,000 for married filers). Individuals earning more than $80,000 (or married couples earning higher than $160,000) are no longer eligible for these direct payments. Those who file as head of household earning up to $112,500 are eligible for the full relief check with a phase out between $112,500 and $120,000.
How much can I expect to receive?
The full $1,400 direct payments will be made to qualified individuals earning up to $75,000 (or $2,800 for eligible married couples filing jointly making up to $150,000). Check out this CALCULATOR to see how much you may be qualified to receive.
When should I expect to see these payments?
Once the American Rescue Plan is signed by the President, the IRS will use your 2020 income tax return to determine your eligibility, the amount you will receive and the type of payment to be made to you. If you have not already filed your 2020 return, the IRS will use the information from your 2019 tax return. Planning opportunity: If you qualify for the third payment based on your 2019 income, but you wouldn’t want it based on your 2020 income, delay filing your 2020 tax return. Conversely, if the reverse is true, file your 2020 income tax return as soon as possible.
The IRS will issue either a direct deposit check, a paper check or an EIP card (debit card). Below is an estimate of when you can expect to receive the payment if the American Rescue Plan is signed by Wednesday, March 10, 2021:
- Direct deposits to your bank account will be made the week of March 17th.
- Paper checks will be mailed the week of March 24th.
- EIP (Debit) cards will be sent the week of March 31st.
To check on the status of your relief payment, click Get My Payment on IRS.gov.
If you have any further questions about the provisions in the American Rescue Plan, feel free to contact us at (847) 444-1040 or email domalley@ctm-cpa.com.
