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Months of partisan wrangling have finally come to an end. At long last, lawmakers have agreed to pass a $900 billion stimulus package to address the devastating financial impact coronavirus has had on the economy. The final deal includes money for vaccine distributions, expanded unemployment benefits, and money for schools. It also provides stimulus checks for most Americans.
These stimulus checks will be a little smaller than those paid out under the CARES Act. Payments will be $600 per adult and $600 for each eligible dependent child. The CARES Act provided $1,200 per adult and $500 per child. The good news is that there are no limits to the number of eligible dependents who can qualify for the check, so large families could receive $600 for each child.
But who exactly is in line to get these checks? Here's what you need to know.
Who will be eligible for a second coronavirus stimulus check?
Most adults who are U.S. citizens will be eligible for the second stimulus check. This is expected to include U.S. citizens who file married joint tax returns with non-citizens, unlike the first stimulus check. However, not everyone will get a second check.
Some older dependents will be left out
Unfortunately, the extra $600 payment for dependents will once again be restricted only to children under the age of 17. This will likely come as a disappointment to any college students who are claimed as dependents as they will be excluded from the second stimulus payment. Similarly, other adult dependents and their families will not qualify.
Throughout negotiations, most plans had provided checks even for dependents over 17. But the final legislation will once again exclude this group, just as the CARES Act did.
High earners may also be ineligible
High earners may also see a smaller stimulus check, or none at all. As with the CARES Act, Congress imposed income limits for the second stimulus check. However, the math looks a little different because the second checks are smaller (although it is possible Congress simply didn't update the formula in the legislative text, so the initial phase-out limits may still apply).
Here's what the current limits look like:
- Single filers with incomes under $75,000 will get the full stimulus payment. Under the CARES Act, those with incomes under $99,000 received a partial payment and people with incomes above that limit did not receive a check. Since Congress has kept the phase-out formula the same but the second checks are for a smaller amount, those with incomes over $87,000 may lose their stimulus payments entirely this time.
- Heads of households with incomes under $112,500 will get the full stimulus payment. Under the CARES Act, payments phased out until an income limit of $146,500 after which no money was provided. Under the new bill, with smaller check amounts but the same phase-out formula, no money would be provided to those with incomes above $129,500.
- Married joint filers with an income up to $150,000 will get their full payment. Under the CARES Act, those with an income under $198,000 saw a partial payment, and those making more than $198,000 received no payments. However, under the new bill, married joint filers would lose eligibility at $174,000.
It should be noted that the CARES Act reduced payments at a rate of $5 per $100 in excess income over the $75,000, $112,500, and $150,000 thresholds. Congress did not change this formula in the current legislative text, but it is possible this was an oversight. Regardless of what the phase-out rules are, higher earners who lose eligibility for their own stimulus payments may still get some money for eligible dependents, depending on how much they earn.
Watch for your stimulus check in the coming weeks
Coronavirus payments should be sent out more quickly this time as the IRS put the process in place to send out the CARES Act checks. If the IRS has your direct deposit information, watch for the money to hit your bank account. If not, wait for your check to come in the mail -- provided you meet the basic eligibility requirements described above.