Stimulus Check #3 Tips
Happy March! It’s hard to believe that spring is right around the corner. Do you know what else is around the corner? The one-year anniversary of COVID-related restrictions in the US. During that time, we have stayed at home, become grocery delivery (or curbside pickup) experts, and turned many of our spare bedrooms into home offices. We have also been separated from those we love and shared in the grief of our fellow citizens who have lost friends and family members. Many workers have experienced a job loss or a reduction in hours, and parents across the nation have been learning how to juggle virtual school, a career, and their home and family responsibilities. It’s been extraordinarily challenging – to say the least.
When the first economic impact measures were introduced, eligible people received $1,200 deposits plus an additional $500 per qualified dependent. This was followed months later by an additional stimulus payment of $600 per eligible person including qualified dependents. Now, nearly one full year into the pandemic, we are awaiting the decision on a third stimulus package. Among other benefits, the proposed plan includes an additional stimulus check of $1,400 per person – including dependents. The plan is expected to reach the desk of the president by March 14th, when unemployment benefits from the last act are scheduled to expire, so it is time to revisit some important information about the stimulus package.
1. The checks are rumored to follow a more restrictive pathway than previous checks. This means that if you qualified for the first set of deposits, you may not qualify for the new round of proposed deposits. The plan currently proposes that individuals making up to $75,000 or married couples making up to $150,000 would receive the full benefits; the payments would be phased out for those with income that exceeds these amounts with a more restrictive cap of $100,000 for individuals and $200,000 for married couples.
2. April 15th is an even more important date this year. Since the payments are being determined by your most recent tax filing, you may want to consider holding off on filing your 2020 taxes in some cases – at least until closer to the tax deadline. If you were on the cusp of those thresholds in 2019 and were one of the lucky few who earned the same or above that amount in 2020, you should hold off on filing taxes until after a decision has been made on the stimulus package. If you are a single person who made more than $75,000 in 2019 but experienced a reduction in income during 2020, you should file if you have not done so. This could be the difference between receiving a full stimulus payment, a partial payment, or no payment at all. Just don’t wait until AFTER tax day to file.
3. If you found it necessary to file for unemployment benefits during 2020, pay extra attention to this part. Unemployment is considered taxable income. For many Americans, it may come as a shock that the refund they usually count on may be significantly smaller than previous years, or they may even owe taxes this year. This is largely because taxes are not automatically withheld from unemployment funds. There may be additional tax implications to filing for unemployment. When in doubt, ask your tax professional about your situation.
4. Just like with the last two payments, fraudsters are waiting for their chance to scam you. Remember – stimulus payment details will be highly publicized. If you are contacted about a “stimulus check” in an odd amount or one that you have to pay a fee for, that is NOT legit. The same goes for anyone who asks you to purchase gift cards or mail a portion of your deposit back to them – NEVER go along with this scam. If you have questions, you can contact your credit union or visit the IRS website about avoiding COVID-related scams.
Do you have additional questions about the proposed economic impact payments? I want to hear from you! Leave a comment below, or email me.
Krista Kyte is a personal finance blogger and personal banker with over 18 years of experience in the financial industry. Krista is passionate about helping our members understand their financial situations. She writes tips that will help consumers reach and maintain financial security, and start living the life they’ve always wanted.
