Why Some Americans Earning Over $600,000 a Year Got Stimulus Checks

by Christy Bieber | Published on Aug. 27, 2021

Many or all of the products here are from our partners that pay us a commission. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
A stylishly dressed man sitting on an expensive-looking couch in a lavishly decorated room.

Image source: Getty Images

Even wealthy Americans received some stimulus money.

Coronavirus stimulus money was intended to help struggling Americans cope with the serious financial consequences resulting from COVID-19 and from the lockdowns that were instituted to slow the spread of the virus.

Lawmakers imposed income limits on eligibility for most of the relief that was available. This relief included stimulus checks deposited directly into people's bank accounts as well as the expanded Child Tax Credit, which will result in parents of eligible children receiving either $250 or $300 per month in their accounts from July through December.

Despite these limits, an analysis conducted by the Institute on Taxation and Economic Policy revealed that some coronavirus relief funds went to very high-earning families.

Here's how much wealthy people averaged in stimulus payments

According to the Institute on Taxation and Economic Policy, households with incomes of $601,700 and above received an average of $50 in coronavirus financial relief. This includes:

  • $40 worth of stimulus check money
  • $10 worth of money from the expanded Child Tax Credit

This is a small fraction of what lower earners received. Those with incomes under $21,300, for example, received an average of $2,210 in stimulus checks and $1,060 from the expanded Child Tax Credit.

Still, it may come as a surprise that wealthy families received any money at all, given that eligibility for both stimulus checks and the child tax credit began phasing out at $75,000 for single filers, $112,500 for heads of household, and $150,000 for married joint filers.

Why did high earners receive stimulus payments?

The most likely reason that high-earning households received stimulus payments is because they were able to reduce their adjusted gross income. See, eligibility was based on income after reductions are applied, including certain kinds of tax deductions and losses from investments.

If wealthy families had income over $600,000 but they claimed lots of deductions or they decided to sell losing investments and claim those losses, they may have been able to reduce the income that counted when determining if they were entitled to government relief.

With the first two stimulus checks issued in 2020 (but not the third check in 2021), very high earners could also receive stimulus checks if they had a lot of children.

That's because the amount of the check phased out at a rate of $5 per $100 over the income thresholds -- and there was no maximum income at which someone became totally ineligible for payment. Someone with a lot of kids might have been entitled to such a large check due to their many dependent payments, and even after the phase-out rules were applied, they still ended up with a small amount of stimulus funds.

Lawmakers were concerned about very high earners receiving money from the third check, so this issue was corrected with a hard income limit on eligibility. Individuals making $80,000 or above and married joint filers with incomes of $160,000 or higher weren't entitled to any stimulus funds at all, no matter how many eligible dependents they had.

Yet despite these new restrictions, wealthy Americans still got some help from Uncle Sam this year -- although not nearly as much as their lower-earning counterparts.

Alert: highest cash back card we've seen now has 0% intro APR until 2024

If you're using the wrong credit or debit card, it could be costing you serious money. Our expert loves this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee. 

In fact, this card is so good that our expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes. 

Read our free review

About the Author