Here's How the Third Round of Stimulus Checks Will Differ From the Previous Two
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Later this afternoon, the House of Representatives is expected to pass the Senate-approved version of President Joe Biden's $1.9 trillion American Rescue Plan. The massive Covid-relief bill is then expected to receive a final sign-off from Biden at some point this week.
Democrats have been pushing to approve the package as quickly as possible, since a number of major unemployment programs are set to expire this coming weekend.
Similar to the House's previous efforts to help struggling househoulds amid an ongoing pandemic, the American Rescue Plan promises to send direct payments of up to $1,400 to most Americans. Yet, this third round of stimulus checks, unlike those approved under former President Donald Trump's administration, differs in several key respects:
- For starters, the base amount ($1,400) is slightly more than what the first round of stimulus checks paid out. Last April, most households received $1,200 during the first round. In December, many of those same households saw just $600 during the second round.
- Households will now get payouts for older dependents, a group that includes disabled adults, elderly dependents and students between the ages of 16 and 23. That means, if you have a child who is a senior in high school or a retired parent who still lives with you, you'll have an extra $1,400 in your pockets.
- Qualifying parents will now receive the full $1,400 for young children. Last year, those parents received just $500 during the first round of stimulus checks for their children.
- The IRS will check your eligibility for the checks based on your most recent income tax return. For many households who saw a drop in income during the pandemic last year, this is welcome news. The IRS will most likely refer to the reduced income on their 2020 tax returns to determine whether they'll receive the full $1,400 — or at least some of it.
- Those making more than $75,000 won't receive the full $1,400. Depending on how much more you make over the $75,000 threshold, you should expect your check to gradually reduce. Payments get cut off entirely for individuals earning more than $80,000 annually (or $120,000 for a head of household) and couples making more than $160,000.
- Mixed-status families will now qualify for stimulus checks. The previous two rounds of checks were only distributed to citizens and noncitizens with a Social Security number. Once the bill passes, households in which at least one member has a Social Security number can receive checks as well.
For those who own small businesses (such as restaurants and bars), the latest stimulus bill also includes several changes that are noteworthy. For instance, the bill won't renew the Paycheck Protection Program (PPP), but it will include $28.6 billion for the Restaurant Revitalization Fund. For those looking to still get a PPP loan before the program phases out on March 31, check out our coverage here.