Stimulus check fine print: A new formula could change your $1,400 payment


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The most important factor in the size of your third stimulus check — and whether you get the $1,400 paymentmuch moremuch less or none at all — comes to a head in whichever equation is part of the final $1.9 trillion stimulus bill. It was true for the first two payments, and it’s especially true for the upcoming check.

Once again, the IRS will need to recalibrate its calculations to set of variables that’s different in key ways from the first two, for example, by redefining certain stimulus income limits or who counts as a dependent (by the way, here’s how the new check compares to the $600 and $1,200 payments so far.) While the stimulus bill isn’t law yet — and the details about the check could change — we have enough to go on from the version of the bill that passed the House.

If the new check is approved as is, a family of four could get $5,600, versus the maximum $2,400 they received from the $600 second check. We’ll further explain below how it works. To keep you updated, here are the top things to know about stimulus payments today, including the timeline for receiving a third check and what happens when and if a third check is approved during tax season. This story is updated regularly.

 Stimulus check formula: Key things to know

Before we dig into how a potential third stimulus check may change the equation and what the outcome would mean for you, here’s how it works. In general, your tax return is one of the most important factors in determining your stimulus check total. The other factors include your adjusted gross income, or AGI, and the stimulus check formula. You can still qualify for a stimulus check if you’re a nonfiler who doesn’t pay taxes too.

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The major variables the IRS plugs into the stimulus formula are:

  • Your AGI per your 2019 or 2020 federal tax returns.
  • Upper limits for single taxpayers, heads of household (for example, a single person with at least one child) and married couples filing jointly.
  • The number of eligible dependents you claim.
  • “Reduction” or “phase-out” rate — the amount your total would drop for every $1,000 you make above the income limit that allows you to qualify for the full check amount. In other words, this part of the equation calculates a partial payment if you don’t qualify for the full amount…Read more>>

Source:-cnet

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