Low-Income Americans Will Get an Average of $3,590 in Stimulus Money in 2021
by Christy Bieber | Published on Aug. 20, 2021
These funds could make a real difference in people's lives.
The pandemic is far from over, and many Americans continue to face financial struggles due to the long-term effects of the COVID-19 outbreak and its lockdowns.
Fortunately, government stimulus payments have provided some financial relief to most people. And some of those funds, including money from an expanded Child Tax Credit, will continue to be delivered throughout 2021.
While stimulus money was available to the majority of Americans, some people benefited more from the assistance than others did. In particular, lower-income Americans will end up getting the most stimulus money in 2021 out of any demographic group.
Here's how much stimulus money low-income Americans will receive
According to the Institute on Taxation and Economic Policy, the lowest-earning Americans will receive more financial relief this year than some of their higher-earning counterparts.
Specifically, those who have a household income of $21,300 or less will get an average of $3,590 in stimulus money and tax credits this year. On average, this includes:
- $2,210 from stimulus checks: direct payments deposited into people's bank accounts or sent via check or debit card
- $1,060 in expanded Child Tax Credits: $250 or $300 delivered per child from July to December of 2021 and available when claiming 2021 taxes
- $320 from the Earned Income Tax Credit: expanded for childless workers and available when filing 2021 tax returns
These funds mean that some of the lowest-earning Americans will see their household incomes increase by almost 33% in 2021.
Americans at higher income levels have also gotten help, although the average amount households are entitled to declines as income goes up. For households with incomes between $21,300 and $39,800, the average amount of stimulus money drops to $3,340. That's a $250 decline. And for those earning much more -- households with incomes between $111,300 and $247,400 -- the average falls to $2,830.
Higher earners end up with less stimulus money because they lose eligibility for the Earned Income Tax Credit, and because they earn above the income limits for the full amount of the stimulus payments and Child Tax Credit. For example, those with incomes between $247,400 and $601,700 will get an average of just $210 from the stimulus checks and $70 from the Child Tax Credit, a fraction of what lower earners receive.
That said, it makes sense that people with limited incomes would need this additional financial help from the government during these troubled times. Hopefully, the money can help people who may have faced job losses or other setbacks to pay their bills. And for those who still have their regular income coming in, the stimulus money could even help to build an emergency fund or repay debt.
It's worth noting that the amount of stimulus money people receive could change if lawmakers approve a fourth stimulus check. But the odds of that remain low unless economic conditions or risk of the virus changes drastically in the coming months.
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