Next stimulus checks will be more 'targeted'

Dollar on bulls eye
Julian Rovagnati / Shutterstock

The Democrats who control Congress hold the Senate by a hair and needed the vote of every senator in their ranks to pass Biden's $1.9 trillion COVID rescue package on Saturday. To win over the Senate's more conservative Democrats, Biden accepted a compromise narrowing the eligibility for the upcoming third stimulus checks.

The intent is to "target" the payments toward needier Americans — and away from those with higher incomes. Here's how that would work:

  • Individuals earning less than $75,000 and couples making under $150,000 would receive a full $1,400. Then, payments start phasing out.
  • Single taxpayers earning more than $80,000 and joint filers with incomes above $160,000 would receive no stimulus check this time.

Previously, the cutoff points were incomes of $100,000 for individuals and $200,000 for couples. Under the changes, close to 17 million fewer U.S. adults and children will receive payments this time, according to an analysis from the Institute on Taxation and Economic Policy.

Congress is moving quickly — and so should you

The IRS will look at your most recent tax return to determine whether you qualify for the stimulus check, and for what amount.

That means if you faced a significant income drop in 2020 because of the pandemic, you'll want to get that information in front of the tax agency ASAP, since it will base your eligibility for stimulus cash on the last return you filed.

So, for example, if you made $77,000 in 2019 but only $65,000 in 2020, your 2019 income would disqualify you from a full payment but your 2020 earnings would get you the $1,400.

The aid bill now goes back to the U.S. House, where a final vote could come as early as Monday. If the president signs the legislation quickly, the IRS could begin processing stimulus checks within days — meaning you may not have much time to submit your 2020 tax return, so it will help determine your payment.

Fortunately for you, electronic filing using today's tax software can get your return into the IRS' system almost instantly.

What if your tax returns won't help you get a stimulus check this time?

Man holds head in hand, looking down while sitting at a desk
fizkes / Shutterstock

If the new income barriers for getting stimulus checks will prevent you from receiving your $1,400 — even if you submit your 2020 tax return quickly — here are some options to essentially make your own stimulus check:

  • Cut the cost of your debt. If you’ve got a lot of credit card debt, you're probably paying a ton of interest. Tame that debt — and make it go away more quickly — by sweeping up your balances into a single, lower-interest debt consolidation loan.
  • Reduce your mortgage payment by refinancing. If you've got a mortgage and haven’t looked around for a lower interest rate in the last year, what are you waiting for? Mortgage rates remain historically low, and refinancing your home loan could slash your monthly payment.
  • Make saving your policy. You don’t always have to pay a, well, premium on the best insurance policies. From auto insurance to homeowners insurance, shop around and make sure you’re not paying more than you should.
  • Stretch your dollars. Look for ways to find a little budge in your budget. Turn down the heat a little to save on electricity. Get rid of your cable or one or two streaming services. Meal-plan for the week and cut back on expensive ingredients. And, download a free browser extension that will automatically find you deals and coupon codes every time you shop online.

About the Author

Sigrid Forberg

Sigrid Forberg


Sigrid is a reporter with MoneyWise. Before joining the team, she worked for a B2B publication in the hardware and home improvement industry and ran an internal employee magazine for the federal government. As a graduate of the Carleton University Journalism program, she takes pride in telling informative, engaging and compelling stories.

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