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When the third stimulus checks go out, how much will you get?

·5 min read
When the third stimulus checks go out, how much will you get?
When the third stimulus checks go out, how much will you get?

With the Democrats who run Congress racing to get COVID relief legislation on President Joe Biden’s desk by mid-March, a third $1,400 stimulus check could be just weeks away.

How much your household receives this time depends on an IRS formula. A bill unveiled on Friday and headed for a vote in the House in the coming week would provide $1,400 per adult and another $1,400 for each dependent, regardless of their age.

Here’s how the tax agency will determine your payout, and why filing your taxes sooner may give you an edge on getting the maximum amount.

How you qualify for a stimulus check

Female hand holding a pen and using calculator while filling in the individual income tax return, close up
Africa Studio / Shutterstock

To determine your eligibility for a stimulus check, the IRS will use your most recent tax return and will zero in on your adjusted gross income. That's your taxable income before deductions.

The House bill would phase out the $1,400 payment amounts for individuals with adjusted gross incomes over $75,000. For heads of household, the threshold is $112,500, and it's $150,000 for married couples filing jointly.

Those are the same income limits used for the first two stimulus checks. House Democrats toyed with restricting eligibility for a full payment this time to individuals earning less than $50,000; they ultimately decided against it, but the Senate could bring back the idea.

Republicans have pushed for lower income limits to make sure checks go only to the neediest Americans. The ways people used last spring's first, $1,200 stimulus checks varied by income, with poorer households mostly spending the money on essential needs, including groceries and rent, the U.S. Bureau of Labor Statistics found.

Others, making more money, used a portion of the cash for saving and investing — or to pay down debt, according to a survey from the bureau.

More family members will get money this time

A family of four, mother, father, son and daughter driving in a convertible car on a sunny day in hot location with palm trees
Darren Baker / Shutterstock

For the third batch of stimulus checks, families who meet the income requirements will receive $1,400 for each member of the household, including dependents of all ages.

In the previous two rounds, money was paid out only to dependents under age 17. And, with the very first checks, families received only $500 per child; round No. 2 increased that amount to $600.

The new checks will give $7,000 to a family of five that includes two parents and three children; they would have received $3,000 in the recent second go-round.

Families with dependents who were disqualified from the last two checks will see an even bigger bump. Let’s say your family consists of two parents, a young child and an 18-year-old. Your family of four will receive $5,600 this time, versus just $1,800 in Round 2.

Who's out of luck this time?

Woman wearing glasses holds cellphone to her ear, writes notes while working on laptop
GalacticDreamer / Shutterstock

Under the phaseout scheme for the third stimulus checks, partial payments will be doled out to individual earners making up to $100,000, heads of household with incomes over $150,000, and couples who file jointly and earn more than $200,000. Americans above those income levels won't receive any money this time.

How do you make sure your family gets the maximum money? If your household income dropped in 2020, you'll want to log in to a good tax software product and get your return filed immediately so the IRS can take your reduced income into consideration.

If it looks like you won't receive a full $1,400 check — or any money at all — there are a couple of things you can do:

  • Trim your budget and "make your own" stimulus check. By finding a few creative ways to cut back, you can possibly wring another $1,400 out of your current budget. For example, maybe it’s time to dump streaming services or other monthly subscriptions you’re not actively using. And, download a free browser extension that will do all the work for you to find the best prices and coupons whenever you shop online.

  • Turn your busy work into your business. Have a hobby or special skill? Turn it into a side hustle to bring in extra income. Set up a profile on an online marketplace for freelancers and turn your talents into capital.

And, what if you need money right now?

Unhappy Family Sitting On Sofa Looking At Bills
Monkey Business Images / Shutterstock

With the third stimulus checks still several weeks away from your bank account, here are a few ways you can make a little room in your budget if you can't wait and need more money immediately.

  • Pare down the cost of your plastic. Have you been leaning hard on your credit cards through the pandemic? Sure swiping is easy, but the interest will catch up to you in no time. Get your debt in order — and pay it down quicker — by consolidating your debts into a single lower-interest debt consolidation loan.

  • Make savings your policy. If you’re not driving as much because of the pandemic, your car insurance company may give you a discount on your rate. If your insurer won’t bend, break ties and shop around for a better deal. And while you’re at it, you might save hundreds on your homeowners insurance by comparing rates to find a lower price on that coverage.

  • Refinance your mortgage (if you've got one) and slash your payments. If you haven’t refinanced your home loan within the last year, it’s time to check out your options. An estimated 16.7 million U.S. homeowners could reduce their monthly house payments by an average $303 through a refi, according to mortgage tech and data provider Black Knight. Rates remain historically low, so refinance your existing mortgage for big savings.