$600 Stimulus Checks for Individual Tax Payers Making Less Than $75k

December 21, 2020, was a historic day as a new stimulus relief bill was passed by Congress and signed into law by President Trump on December 27, 2020. People who are eligible have already stated receiving their second stimulus check from the IRS.  The stimulus payment cutoff has been set as January 15, 2021.  After that, everyone is going to have to apply for relief payments on their taxes.

Payments will be sent by the IRS through physical checks, EIP cards, and direct deposit. Your income, tax status, citizenship, age and the age of your children can all have an impact on your eligibility. To help you, we will show you who won’t be eligible for a second payment, along with the main changes to the qualification between the two stimulus checks.

We will answer any questions you may have about the qualification below and give you an understanding of which people will qualify for the $600 stimulus check.

The Income Limit is Capped at a Lower Amount to Qualify for a Second Check

Income limits for the second stimulus are laid out in the table below. Eligibility is determined by your ‘adjusted gross income’ (AGI).  The Federal Government is using the AGI of 2019 to calculate if individuals have qualified for the stimulus check. if individuals didn’t file tax returns in 2019, the 2018 return is being used.

As you can see in the table below, income limits have been adjusted down since the first stimulus check. To keep things simple, we haven’t included qualified children in the income limits.

$600 Second Stimulus Check Income Limits

 AGI to receive full amount (both stimulus checks)Second stimulus check upper income limit (AGI)First stimulus check upper income limit (AGI)
Single Tax Filer  Under $75,000  $87,000  $99,000
Head of Household  Under $112,000  $124,000  $146,000
Married, Filing Jointly  Under $150,000  $174,000  $198,000

The first column shows the lower income limit for receiving the complete amount.  Individuals who make more than the lower limit, will receive a gradually reduced amount until they reach the upper limit, outlined in column 2.  Column 3 is the upper limit for the 1st stimulus check and is outlined for comparison purposes only.

Qualifying Children and Adults Both Qualify for the $600 Second Payment

Qualifying adults will receive $600 and an additional $600 for each dependent child, who is 16 years and younger. No cap has been placed on how many children you can receive payment for.

Who Qualifies for a Second Stimulus Check

  Qualifying Group    Covered in Final Law
  Individuals    An AGI of less than $87,000
  Head of Household    An AGI of less than $124,000
  Couple Filing Jointly    An AGI of less than $174,000
  Children Under 17 Years Old    $600 apiece, no limit on the number of children
  Families with Noncitizen Spouse    Provided they meet other qualifications
  US Citizens Living Abroad    Yes, same as CARES
  Citizens of US Territories    Yes, same as CARES, with payments handled by each territory  
  SSDI and Other Non-filers    Yes, but it may require an extra step to claim
  Incarcerated People    Initially excluded by IRS interpretation, but now included by court order  
    People who owe child support  Excluded under CARES, but included in the new bill
  Disqualified Groups    Not Covered in Final Law
  Non-US Citizens    “Resident Aliens” are not included
  Non-citizens Who Pay Taxes    Not included if spouse is not a US citizen

The Second Check has Different Requirements of Eligibility for ‘Mixed-Status’ Families

In the new stimulus package worth $900 billion, all US citizens and their non-citizen spouse will only need their Social Security numbers to be eligible for payment. These are now known as “mixed-status” households in terms of citizenship.

In March, with the CARES Act, all households that had someone who wasn’t a US citizen didn’t get a stimulus check, even if the child and spouse were US citizens.

Non-Citizens Don’t Qualify for Payment Even After Filing Tax Returns

The requirement for payment is a Social Security number under the CARES Act. Earlier proposals had expanded the eligibility for everyone who had an ITIN, in place of a Social Security number, since they were categorized as non-resident aliens. These people have been excluded again under the new bill payment.

You Can’t Use the Payment to Pay for Child Support

If you have child support payments overdue, the first stimulus money could be used to pay the amount you had owed. However, in the new bill, if you are someone who owes child support, you can’t use the payment to cover your past arrears.

Incarcerated People Will Get a Second Stimulus Check

A federal judge had ordered the IRS to send the stimulus checks for the first payment to people who had been incarcerated. This came about after months of fighting for their rights. Under the new law, incarcerated people haven’t been excluded, meaning they are eligible for a second stimulus check.

Eligibility for the Stimulus Check Depends on Your Taxes

There is a firm connection between stimulus checks and taxes for most people. For instance, adjusted gross income is the crucial factor for setting income limits, as it determines the total amount you will receive. For individuals, this is $600 or $1,200 and, for married couples, it is $1,200 or $2,400 (children are excluded for now).

How Older Adults or Retired People Are Affected

The CARES Act gave the first stimulus check to retirees above 65 years,Today$123 and they are going to be eligible to receive a second payment as well. For retired people and older adults, there will be factors such as their pension, their AGI, their tax filings, and whether they’re a part of the SSDI and SSI programs that will affect if they get a second payment.

Eligibility for Second Stimulus Check Not Subject to Tax Return Filing

Eligibility for the second stimulus check will be determined by the IRS through the tax returns of 2019. Under the CARES Act, for the first stimulus check, Individuals who in 2018 or 2019 haven’t filed their federal income tax returns will be eligible. They will get the qualification again. Some reasons why individuals haven’t filed their tax returns could be:

  • Their income is less than $12,200, and they aren’t a dependent and are over 24 years old.
  • They’re married, jointly filing, and their overall income is less than $24,400.
  • They have no income. 
  • They get federal benefits, like Supplementary Security Income or Social Security Disability Insurance

The requirement for the first stimulus check was that non-filers had to give information over to the IRS if they wanted to get their payment. (Those who haven’t received their first check even though they are eligible can still claim it with their taxes in 2021, according to the IRS). There have already been attempts made by the IRS to get in touch with nearly 9 million Americans who fall under this category but still haven’t collected their payment. Individuals in this group may claim the payment with their taxes for this year.

The new law also dictates that individuals who have used the non-filer portal of the IRS for the first check will get their second payment as well. To clarify what action these non-filers must take, we have contacted the US Treasury and the IRS.

Are There Any Income Limits?

The answer to that is yes. Individuals who have an aggregated gross income of $75,000 or less are going to get the full $600. Couples who file jointly (or anyone whose partner passed away in 2020) and have an aggregated gross income of $150,000 or less will get $1,200 ($600 for each person). A filer who is also the head of the household, with an aggregated gross income of $112,500 or less, will get the complete $600 check.

If the aggregated gross income is more than the limit, the stimulus check amount will be reduced. An individual (whether married and filing separately or single filer) with an aggregated gross income of more than $87,000 won’t get a stimulus check. Couples who are filing joint won’t qualify for a stimulus check if the aggregated gross income is more than $174,000. Anyone filing as head of the house with an aggregated gross income of more than $124,500 won’t get a stimulus check.

What About Federal Beneficiaries and Social Security Recipients?

You won’t have to go through any significant effort to receive the second stimulus payment if you’ve already receiving federal benefits form any of the following programs:

  • Supplemental Security Income (SSI)
  • Veterans Administration (VA) beneficiaries
  • Railroad Retirement Board beneficiaries
  • Old-Age retirement, Social Security, Disability or Survivors Insurance

The AARP played a major role in ensuring the government-issued automatic stimulus payments to recipients of SSDI, VA, SSI, Social Security, and other Federally run benefits.

Conclusion

The new $900 billion stimulus bill is providing much needed assistance to families who have been hit hard by the COVID-19 pandemic. The financial assistance it brings is going to make a major difference for a lot of families. If you are still wondering if you qualify, or need help claiming your stimulus payment, email matt@sharppayrollservice.com for help.