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Susan Tompor: Not as many Americans eligible for third stimulus check: Here's what you need to know

Susan Tompor, Detroit Free Press on

Published in Business News

The third — and maybe the last — stimulus payments may indeed start showing up soon. But here's an early warning: If you don't get a stimulus check this time around, it could be because you're never going to get one.

Roughly 6.5 million households that received money in the past now won't be able to bank on receiving either the full $1,400 payment or even a partial payment when it comes to the latest Economic Impact Payments, according to estimates by the nonprofit, non-partisan Tax Foundation.

The rules relating to who qualifies and who doesn't based on income changed this round.

Singles earning $80,000 or more won't get a check. Married couples earning $160,000 or more won't get a check.

But there's another option: If a single filer made more than $80,000 in 2020 but ends up making less than that in 2021, the taxpayer could claim an Economic Impact Payment based on their 2021 income when they file a tax return during the tax season next year. The same is true for a married couple who did well in 2020 but might make less than $160,000 in 2021.

The Senate approved the $1.9 trillion COVID-19 relief bill Saturday and the House is set to vote Tuesday, paving the way for President Joe Biden to possibly sign the legislation into law this week.

 

How the IRS calculates the third stimulus

The Internal Revenue Service will use information, including your income, from your 2019 return to calculate the next Economic Impact Payment, if your 2020 tax return isn't filed and processed by the time the IRS starts issuing the third stimulus payments.

The third stimulus payment is based on such things as whether you're filing single or married filing a joint return, how many dependents you have, and your adjusted gross income.

The latest goal is to better target the COVID-19 relief cash to households that may need the money the most, including families that have been unable to receive unemployment or other benefits and have experienced a financial hardship during the pandemic.

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