Third Round Of Stimulus Cheques. Who is eligible? Who isn’t?
This is what we know so far.
Millions of Americans receive a one-time payment of up to $ 1,400, according to USA Today . Even if they live outside America. The payments are part of President Joe Biden’s $ 1.9 trillion rescue plan, his first major initiative since taking office in January. Biden is expected to sign this act on March 11 or 12
Unlike the other two payments, not everyone will be eligible for the stimulus payment of $ 1,400. Under the new act, individuals with gross (AGI) income of $ 80,000 or less ($ 160,000 for joint filers) are eligible for a one-time payment of up to $ 1,400, plus an additional $ 1,400 for each dependent child.
Support levels will be phased out for those earning more than $ 75,000 and will be phased out completely for anyone earning more than $ 80,000. For spouses filing jointly, the phase-out begins for those making $ 150,000 and cuts at $ 160,000.
In addition, there are a number of conditions, for example if the person is reported as a dependent in the declaration of someone else, then the person does not receive the support.
|Qualifying group||What’s proposed|
|Individuals||An AGI of less than $80,000 to qualify for any payment amount|
|Head of household||An AGI of less than $120,000 to qualify for any payment amount|
|Couple filing jointly||An AGI less than $160,000 to qualify for any payment amount|
|Dependents of all ages||$1,400 apiece, no cap — but only if guardians make under the above limits|
|Families with mixed US citizenship||Provided they meet other qualifications|
|US citizens living abroad||Yes, same as first two checks|
|Citizens of US territories||Yes, same as first two checks, with payments handled by each territory|
|SSDI and other tax nonfilers||Yes, but may require an extra step to claim|
|Incarcerated people||Initially excluded by IRS interpretation, and up for discussion in third check|
|People who owe child support||Excluded under CARES, but included in second check|
|Disqualified groups||Not covered by law
|Non-US citizens||“Resident aliens” aren’t included|
|Noncitizens who pay taxes||Possibly, depending on “mixed-status” rules|
Another revision in Biden’s act is good news for many students. In the first two rounds, students 17 or older were not eligible for benefits or their parents or guardians claimed to be dependent. Nor did their parents receive the extra money, because that only applied to children aged 16 and under.
As a result, many high school and senior and college students were denied a check and their parents were not given the extra money. This time, parents with dependent children of any age will receive $ 1,400 per child as long as they meet the income requirements.
A special part of the act is about extra support for Americans with young children. A historic social step for America.
Normally, one is entitled to a Child Tax Credit (CTC) in the tax return. This credit reduces the amount owed and is refundable up to $ 1,400, if you have been a resident of the U.S. for at least 6 months during this tax year. Under Biden’s new act, the Child Tax Credit is increased to $ 3,000 per dependent child ($ 3,600 under the age of 6) if the income is below $ 75,000 for an individual ($ 150,000 for an American couple). The phase-out for this child benefit is broader than for the regular support, the child benefit is being phased out to an income of $ 200,000 ($ 400,000 for American couples).
In December, Congress approved weekly aid ($ 300) for the unemployed. This support would expire in March 2021, in Biden’s new act this support is extended to September 6, 2021. Note, unlike the regular support, unemployment benefits are usually taxed by the IRS, among others, the Washington Post. It is not yet clear whether this will be changed given the situation.
It is currently unclear whether the extra support for the unemployed will also be paid out to Americans living abroad.
In 2020, the IRS called for checks to be returned from deceased people. Now it appears, according to several American accountants, that family members who file 2020 for the deceased can indeed use the “Rebate Credit”, so that they still receive the stimulus support, provided that the deceased naturally meets the income conditions that apply to the aid awarded in 2020.
These deceased individuals are not eligible for the $ 1,400 payment of 2021.
Low-income people who haven’t filed taxes in the past two years are eligible for a check, but millions of them won’t get one unless they take action. To obtain the first and second support, one must submit a return for the year 2020 and use Rebate Credit. They will still receive the (full) amount.
Those who receive Social Security benefits are probably ok. Social Security recipients are automatically given a “relief check” if the IRS follows the same procedure as the first two rounds. If so, the government uses Social Security data to determine how much they receive and where it is sent. The payment is based on the 2019 tax return
The IRS holds the income of the 2019 tax return, unless the 2020 tax year has already been filed with the IRS. If the income is clearly lower in 2020 than in 2019, it may therefore be wise to file an accelerated declaration in order to receive a full benefit.
Hard to say. The Ministry of Finance has not indicated when it will distribute the money. The timeline will likely be similar to the second round of payments approved in December. Americans who received their checks via direct bank transfer received the amount about two weeks after the legislation was signed. Those who received a paper check had to wait longer.
Biden said last week that many Americans should receive their payments by the end of the month. The IRS said in mid-February that it had distributed all checks to everyone eligible for the first two rounds. More than 160 million payments totalling $ 270 billion were distributed during the first round last spring, the agency said. At the end of last year, more than 147 million payments were made during the second round for a total of more than 142 billion dollars.
Disclaimer: The official details of the act have not yet been published by the IRS. The above text is based on press publications and news broadcasts. This text will be supplemented in the coming days with all information to be announced.
We, the founders of Americans Overseas, were born in the Netherlands and obtained our American nationality through our (American) mother.
When we heard about the US tax system for the first time around 2013, we were in total disbelief (it can’t be true!), anger (how can they do this?), fear (am I going to get fines or pick up other problems?), and panic (what should I do?). It is (unfortunately) true that there is an additional American tax levy. But there’s no information from local government, and when approached, the consulate referred us to the IRS, and the IRS was impenetrable.
That’s why we started this initiative to help people from all over the world by providing proper information about the US tax system to avoid unnecessary panic, and offering help free of obligation and free of charge. If needed, we have a network of affordable professionals (accountants) who can help you with your tax obligations.