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Third Stimulus Checks: Biden's $1,400 Checks, Explained

The IRS has already sent out more than 156 million third stimulus checks, worth approximately $372 billion. President Joe Biden’s American Rescue Plan pays individual taxpayers earning less than $80,000 a maximum of $1,400 and couples making under $160,000 up to $2,800. Let’s break down what this means for you – who is eligible for the third stimulus payment, how it is calculated, and how soon you will get it. (Note: This is a developing story, and we will continue to update the article as more information becomes available.)

If you do not have to spend your stimulus check on immediate needs, consider working with a financial advisor to strategize how best to use or invest this money.

When Will I Get My Check and How Can I Track It?

The IRS paid out a fourth batch of third stimulus checks on April 14. This adds up to more than 156 million payments delivered, and totals approximately $372 billion since the third round of checks started going out in mid-March.

Biden had vowed on March 15 to deliver 100 million stimulus checks to taxpayers in 10 days. Millions of Americans started getting the first wave of payments via direct deposit two days after his pledge. And by March 24, approximately 127 million payments worth roughly $325 billion had already been paid out.

The fourth batch of stimulus checks also included “additional ongoing supplemental payments” for taxpayers, which are commonly referred to as “plus-ups.” You could qualify for a new or larger payment if you got a stimulus check in March based on your 2019 tax return and a recently-filed 2020 tax return makes you eligible for more money. The agency says that over one million plus-ups worth more than $2 billion were paid out in this batch.

The status of your payment can be tracked on the IRS’ “Get My Payment” portal. Additional updates will be posted on the IRS website, along with a fact sheet that answers common questions.

As a reference, the second round of $600 stimulus checks started going out to taxpayers on December 29, 2020, two days after President Trump signed the $900 billion COVID-19 stimulus package into law. Paper checks followed on December 30, 2020, and approximately 8 million prepaid debit cards with stimulus payments were also sent out.

White House press secretary Jen Psaki said at a briefing on March 11 that roughly 90% of the stimulus payments “will go via direct deposit to people’s bank accounts.” While these generally arrive first, you should note that payments could take extra time to process. The IRS has already stated that the COVID-19 pandemic continues to cause delays in some services, including paper and electronic tax returns.

For a comparison, approximately eight million eligible recipients had not yet received payments for the first two rounds of stimulus checks as of January 2021. Biden signed an executive order on January 22 asking the Treasury Department to deliver direct payments to all qualifying recipients.

If you collect Social Security retirement, survivor or disability benefits, you could automatically get a third stimulus check via direct deposit as long as you have your bank account on file with the IRS. Other federal beneficiaries, including those receiving Supplemental Security Income (SSI), Railroad Retirement benefits and VA benefits, will also get a third payment in the same way.

The agency will mail out letters (Notice 1444-A and Notice 1444-B) to eligible recipients breaking down the amounts of the payments, how they were delivered and how to report them if they were not received. You should keep this letter for your tax records.

If your income is low enough that you usually don’t have to fill out a tax return, or you are a veteran who gets disability compensation, a pension, or survivor benefits from the Department of Veterans Affairs, the IRS has created an online tool for you to submit personal and banking information to get your stimulus payment.

Biden said that the American Rescue Plan will deliver $1,400 stimulus checks to “85% of American households.” On the anniversary of the COVID-19 shutdown, he stated in a speech that “a typical family of four earning about $110,000 will get checks for $5,600.”

The Federal Reserve Bank of New York reported that 32% of households participating in its March 2021 Survey of Consumer Expectations (SCE) said they had already received an average of $3,162 third-round payments.

How Much Does the Third Stimulus Check Pay?

The $1.9 trillion coronavirus relief plan includes a third round of $1,400 stimulus payments, topping off the $600 checks that were already approved by Congress in December 2020, and adding up to $2,000.

Congress passed the coronavirus relief plan with targeted income limits for maximum stimulus payments to individual taxpayers earning under $75,000 and joint filers making up to $150,000. But whereas the first and second rounds of stimulus payments phased out checks on a sliding scale of $5 for every $100 over the income limit, the new plan cuts off high earners at $80,000 for individuals and $160,000 for couples.

Eligibility for the third stimulus checks is based on your tax filing status. For more information on who qualifies for a third stimulus check, our tables below will help you calculate different payment options.

How Is the Third Stimulus Check Calculated?

The stimulus plan mandates the treasury to rely on 2019 and 2020 tax returns to calculate how much you could get for the third round of stimulus checks.

Congress approved limits based on adjusted gross income (AGI) ranges. This means that taxpayers making less than the minimum threshold could get the full stimulus check, while those earning above it get reduced payments until they are fully phased out at higher incomes.

You can find your AGI on IRS form 1040. This is calculated by subtracting deductions like student loan interest, health savings account payments, and contributions to a traditional IRA from your gross income.

By contrast, your gross income is the total amount of money that you made during the tax year, including wages, dividends, capital gains, rental property income and other types of revenue.

Your 2019 taxes had to be filed by July 15, 2020. And your 2020 taxes are due by the extended deadline of May 17. You can read more about when to file your tax returns for the third stimulus check, and other IRS requirements in two tax sections below.

Who Qualifies for the Third Stimulus Check?

Who Could Qualify for the Third Stimulus Check?

Millions of Americans who were eligible for the $600 second stimulus checks could qualify for the third round of stimulus payments up to $1,400. However, many high-earning taxpayers who were eligible for previous stimulus checks are now excluded. The plan narrows income eligibility to exclude individuals earning over $80,000 and couples making over $160,000:

  • Singles phase out at AGIs between $75,000 and $80,000.
  • Heads of household phase out at AGIs between $112,500 and 120,000.
  • Couples phase out at AGIs between $150,000 and $160,000.

Keep in mind that this is different from the sliding scale that was used to determine eligibility for previous stimulus payments. The IRS reduced second stimulus checks by 5% for the total amount made over the AGI limit. This means that payments went down by $5 for every $100 over the limit.

The table below breaks down third stimulus payments based on narrower income ranges for singles and joint tax filers:

$1,400 Stimulus Checks With Narrower Income Ranges
Single AGI Payment Joint AGI Payment
$75,000 $1,400 $150,000 $2,800
$76,000 $1,120 $152,000 $2,240
$77,000 $840 $154,000 $1,680
$78,000 $560 $156,000 $1,120
$79,000 $280 $158,000 $560
$80,000 and up $0 $160,000 and up $0

For a comparison, let’s take a look at how much the second stimulus checks paid out for single and joint filers in December 2020. Note that single filers making over $87,000 and joint filers making over $174,000 did not qualify for a second stimulus payment:

Second Stimulus Checks for Single and Joint Filers 
Single AGI Payment Joint AGI Payment
$75,000 $600 $150,000 $1,200
$77,400 $480 $154,800 $960
$79,800 $360 $159,600 $720
$82,200 $240 $164,400 $480
$84,600 $120 $169,200 $240
$87,000 and up $0 $174,000 and up $0

If you want to get a specific breakdown, SmartAsset’s third stimulus check calculator will give you an estimate based on your filing status, AGI and dependents.

Are Adult Dependents Getting Third Stimulus Checks?

The new stimulus plan expands eligibility to adult dependents, including college students, elderly relatives and disabled adults.

The text of the plan redefines the term “dependent” according to section 152 of the tax code, which includes both qualifying children and adults: “Section 152(a) provides that the term “dependent” means a “qualifying child” (as defined in 2 section 152(c)) or a “qualifying relative” (as defined in section 152(d)).”

While the plan pays out $1,400 for each qualifying dependent, families should keep in mind that the targeted lower income ranges exclude them if they earn over $160,000.

For reference, the second stimulus checks provided additional $600 payments for qualifying dependents under the age of 17. So a couple filing jointly with three eligible children could get a maximum second payment of $3,000 ($1,200 for married joint filers with an AGI under $150,000, and $600 for each additional qualifying dependent).

Under the first and second rounds of stimulus checks, children and adult dependents over the age limit could not get an additional payment, and they did not qualify for a stimulus check of their own either.

With the new stimulus plan, however, both joint filers and heads of household get an additional $1,400 payment for each dependent, regardless of age. The table below breaks down the third stimulus checks for heads of household with one dependent:

Stimulus Checks for Heads of Household & 1 Dependent
AGI Payment
$112,500 $2,800
$114,000 $2,240
$115,500 $1,680
$117,000 $1,120
$118,500 $560
$120,000 and up $0

Now, let’s compare the second round of stimulus checks with the third round for heads of household with one dependent:

Second vs Third Stimulus for Heads of Household & 1 Dependent 
AGI Level $600 Second Stimulus Check  AGI Level $1,400 Third Stimulus Check
$112,500 $1,200 $112,500 $2,800
$116,500 $1,000 $113,750 $2,333
$120,500 $800 $115,000 $1,867
$127,500 $600 $116,250 $1,400
$132,500 $400 $117,500 $933
$142,500 $200 $118,750 $467
$146,500 and up $0 $120,000 and up $0

This breakdown shows that heads of household earning under $146,500 still qualify for a second stimulus check with an additional payment for one dependent. But under the third stimulus check, only heads of household making less than $120,000 could get a stimulus check with an additional payment for one dependent.

Can Mixed-Status Families Still Get Stimulus Checks?

Could Mixed-Status Families Still Get Third Stimulus Checks?

The new stimulus plan maintains eligibility for mixed-status households, which include family members with different citizenship or immigration statuses. A common example of a mixed-status family can be made up of undocumented parents and U.S.-born children.

Qualifying couples can get a maximum stimulus payment of $2,800. However, joint returns for mixed-status families with only one valid identification number (this is defined as the Social Security number that is used when filing taxes) only get up to $1,400, and joint returns without valid identification numbers for either spouse are excluded.

The table below calculates payments for mixed-status families with one undocumented partner, using narrower income ranges approved by Congress:

$1,400 Check for Mixed-Status Families With 1 Undocumented Partner
AGI Payment
$150,000 $1,400
$152,000 $1,120
$154,000 $840
$156,000 $560
$158,000 $280
$160,000 and up $0

Because of the targeted income limits, mixed-status families earning over $160,000 do not qualify for a third stimulus check.

Keep in mind that mixed-status families with an active military member at any time during the tax year can get up to $2,800. Their joint AGI has to be under $150,000 for the full payment and will get phased out over $160,000. At least one spouse must have a valid identification number.

For a comparison, if a U.S. citizen and a noncitizen spouse filed their taxes jointly under the March 2020 CARES Act, they were not eligible to claim the first stimulus check. However, when the $900 billion COVID-19 relief package was signed into law in December 2020, joint filers with one undocumented spouse became eligible for the second stimulus check, as well as additional payments for child dependents.

You should note that “nonresident aliens” are not eligible for the third stimulus checks. They were also excluded from the first and second rounds of stimulus checks. Currently, the IRS says that “qualifying resident aliens” with valid Social Security numbers for employment are eligible for stimulus payments as long as they have not been claimed by another taxpayer as a dependent.

Will the IRS Tax My Third Stimulus Check?

How Could a Third Stimulus Check Bill Get Passed into Law?

The IRS does not consider stimulus checks to be taxable income. This means that you do not have to report the money on your federal income tax return, or pay income taxes on your stimulus check.

You should also note, that if you owe taxes, you could still qualify to get a stimulus payment because the IRS does not use it to offset federal or state tax debts like it normally does with tax refunds.

For private debts, however, the American Bankers Association has pointed out a loophole in the new stimulus plan where “banks and other financial services providers will be legally required to comply with court ordered garnishments.” The association says that without legislation to shield your third stimulus payment, creditors or collectors can take it to pay off existing debt.

As a reference, the 2020 COVID-Related Tax Relief Act did shield stimulus payments from private debt collection: “The Advance payments are generally not subject to administrative offset for past due federal or state debts. In addition, the payments are protected from bank garnishment or levy by private creditors or debt collectors.”

But while your stimulus money could be taken to pay for private debt, the new offsetting rules prevent the IRS from deducting overdue child support from eligible recipients. You should keep in mind, however, that the IRS intercepted or reduced payment from the first round of stimulus checks for past-due child support.

Qualifying taxpayers who did not get the full amounts of their stimulus payments could claim a recovery rebate credit to increase their tax refund or lower their tax bill. The IRS website also posted additional information for claiming the 2020 recovery rebate credit for eligible recipients who aren’t required to file a tax return.

As an example, if you have to pay $1,600 in taxes this year, and the government still owes you the maximum stimulus payment of $1,800 (that’s $1,200 + $600 for the first and second checks), then you can use your recovery rebate credit to offset your tax bill and get a $200 tax refund.

But, on the other hand, if you’re expecting to get back money from your tax return, then your tax refund could be significantly higher depending on how much you are owed from your stimulus checks.

Which Tax Return Is Used for My Third Stimulus Check? 

The IRS uses 2019 or 2020 tax returns to determine eligibility for your third stimulus check. You should note that if your income fell in the 2020 tax year, filing your tax return earlier could help you qualify for a bigger third stimulus check. The new stimulus plan targets lower income ranges to exclude higher-earning taxpayers from getting a payment.

As we pointed out before, individuals making under $75,000 get the maximum stimulus payment of $1,400 ($2,800 for joint filers earning less than $150,000). But payments are capped at $80,000 for single filers and $160,000 for couples. So filing at the beginning of the tax season with a lower income may help you qualify for a bigger check. But, if your income went up in tax year 2020, then you may want to delay filing so that eligibility is determined by your lower 2019 income.

You might also want to file early if the size of your family increased in 2020. The new stimulus plan includes a child tax credit that pays up to $3,600 for each qualifying child under 6 years old, and $3,000 for every child between ages 6 and 17. This means that if you became a parent during the tax year, you could get an additional payment by claiming your child as a dependent earlier.

SmartAsset’s child tax credit calculator will help you figure out how much you could get for each child.

With the pandemic, many Americans are looking towards their tax refunds to get an extra boost for their finances. You can check the status of your refund through the IRS website or the IRS2Go mobile app. The agency says that the average tax refund in 2020 was more than $2,500, and it expects over 150 million tax returns to be filed in 2021.

The 2021 tax season began on February 12. You need to file your 2020 taxes by the extended deadline of May 17. Taxpayers filing online and claiming the earned income tax credit (EITC) or the additional child tax credit (ACTC) could get their refund via direct deposit by the first week of March.

You can use SmartAsset’s tax return calculator to figure out your 2021 tax refund or tax bill.

How the Third Stimulus Check Became Law

The American Rescue Plan was signed into law on March 11, authorizing a third round of stimulus checks that pay a maximum of $1,400 for millions of Americans. Targeted income limits, however, exclude individuals earning over $80,000 and joint tax filers making more than $160,000.

Biden said at the signing of the bill: “this historic legislation is about rebuilding the backbone of this country and giving people in this nation — working people and middle-class folks, the people who built the country — a fighting chance.  That’s what the essence of it is.”

House Democrats had moved the $1.9 trillion COVID-19 relief bill to Biden’s desk with a 220-211 vote just one day earlier. But progressives in the party expressed concern over Senate amendments that excluded higher-earning taxpayers from getting a stimulus payment.

Biden agreed to narrow income level requirements as a concession to moderate Senate Democrats who wanted to cap payments for individual taxpayers at $80,000 and joint tax filers at $160,000.

The Senate bill narrowly passed with a 50-49 vote on March 6 after an overnight marathon of disputed amendments and negotiations. A 50-50 tie between both parties was avoided because Senator Dan Sullivan (R-AK) could not vote after returning to Alaska for a family funeral.

The House had already approved an earlier draft of the rescue bill on February 27, which excluded individual taxpayers earning over $100,000 and joint filers making over $200,000. Democrats then reunited to pass the amended relief package with narrower income limits from the Senate before a $300 weekly unemployment supplement expires on March 14.

Only Representative Jared Golden (D-ME) broke party lines to vote against the bill: “Borrowing and spending hundreds of billions more in excess of meeting the most urgent needs poses a risk to both our economic recovery and the priorities I would like to work with the Biden Administration to achieve,” he said in a statement on March 10.

How Are Americans Using Stimulus Checks?

The Federal Reserve Bank of New York says that households are spending a smaller percentage of their stimulus checks and saving more. The March 2021 Survey of Consumer Expectations (SCE) shows that households set aside just under 25% of their third-round payments for consumption. This share fell from just over 29% of first-round payments reported in June 2020 and almost 26% of second-round payments reported in January 2021.

The table below is based on all three SCE surveys and breaks down the average percentage of stimulus payments spent, saved and used to pay off debt:

New York Fed SCE Breakdown of Stimulus Check Spending
Payment Round First Stimulus  Second Stimulus Third Stimulus 
SCE Month June 2020 January 2021 March 2021
Average Percentage Spent 29.2% 25.5% 24.7%
Average Percentage Saved 36.4% 37.1% 41.6%
Average Percentage Used to Pay Debt 34.5% 37.4% 33.7%

The New York Fed also says that households expect to spend an average 13% of the third stimulus check on essential items and an average 8% on non-essential items.

For a comparison, preliminary data collected by the U.S. Census Bureau from February 17 through March 1 shows that the majority of stimulus recipients are almost three times more likely to use checks to pay down debt than add to their savings.

An earlier June 2020 Census study showed that the majority of recipients who got the first stimulus check spent their payment on household expenses. Adults with incomes between $75,000 and $99,999 told the Census that they would most likely pay off debt or add to their savings. While adults making less than $25,000 said they would use their stimulus to pay for expenses.

For those households that spent their first stimulus checks, the study says:

First Stimulus Check Breakdown of Household Spending
Percentage  Spent On
80% Food
77.9% Rent, Mortgage and/or utilities (these include gas, electricity, cable, internet and cellphone)
58.2% Household supplies and personal care products
20.5% Clothing
8.1% Household goods (these include TVs, electronics, furniture, appliances and recreational goods like fitness equipment, toys and games)

Other data from the U.S. Bureau of Labor Statistics similarly found that the majority of recipients spent their first stimulus check on essential needs, including food (66%), utilities and internet/phone (50%), household supplies and personal care (47%) and rent (28%). Only 25% of recipients said they would use their first stimulus check to pay down debt and 16% said they would use it to add to their savings or invest.

For additional context, the Bureau of Economic Analysis said that consumer spending had increased $737.7 billion (5.6%) in June 2020. But in December 2020, it had decreased $27.9 billion (0.2%). For a comparison, personal saving was $3.37 trillion in June and the personal saving rate was 19%. But by December, personal saving was $2.38 trillion and the rate was 13.7%. February 2021 showed a $149 billion (1%) decrease in consumer spending, and personal saving was $2.41 trillion with a 13.6% rate.

Bottom Line

Biden signed the American Rescue Plan into law on March 11. Congress passed the $1.9 trillion relief package with a third round of $1,400 stimulus checks, topping off the $600 second stimulus payments and adding up to $2,000 for millions of Americans. Targeted income limits, however, exclude individual taxpayers earning over $80,000 and joint filers making over $160,000. Payments started arriving as early as the weekend of March 13-14.

It’s important to keep up with the latest developments so you can know what type of aid you could qualify for. We will continue to update this article as soon as new information becomes available. You can also find other relief programs at the federal government help center and our list of coronavirus relief programs by state.

Biden has also proposed a $2.3 trillion infrastructure plan that aims to create millions of middle class jobs. And he will unveil the American Families Plan on April 28, which invests in childcare, universal prekindergarten, paid family and medical leave, free community college and other family programs.

Tips for Individuals During the Coronavirus Pandemic

Photo credit: iStock.com/photovs, iStock.com/LPETTET, iStock.com/fizkes, iStock.com/photovs

Arturo Conde Arturo Conde is an editor at SmartAsset and a bilingual freelance journalist. He writes for NBC News and WhoWhatWhy. His articles have been published in Fusion, Univision, City Limits and the NACLA Report on the Americas.
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