The U.S. government has proposed a third round of pandemic relief. The bill has not been passed yet, but based on the proposal, your clients should file their 2020 taxes soon to ensure that they receive the correct stimulus amounts.
This article is accurate as of March 3, 2021 and will be updated as more information becomes available.
How much can my clients expect to receive on their third stimulus check?
The current proposal states that individuals who make $75,000 or less can expect to receive $1,400. That means that married couples filing jointly who make $150,000 or less will receive $2,800. Dependents under age 17 who meet the requirements for a qualifying dependent may also receive $1,400, meaning a family of four could receive $5,600. Remember, these are proposed numbers, and nothing is final.
The stimulus check phases out completely for individuals who make $80,000 or more and couples who make $160,000 or more.
Will college aged or adult dependents receive the third stimulus check?
Dependents over the age of 17 did not receive the first two stimulus checks. However, the proposed bill does include dependents ages 18-24 who are attending college as well as other adult or elderly dependents. This means all dependents, no matter the age, should be eligible for the $1,400 stimulus check.
When will the third stimulus get approved?
This stimulus bill is still waiting to be approved. The administration hopes to have it signed by March 14th, but nothing has been finalized.
Will my client need to file their 2020 taxes before they can receive their stimulus check?
As with the first two checks, your client’s AGI will be used to calculate how much they will receive for the third stimulus. The IRS will look at 2019 and 2020 tax returns to determine eligibility.
Filing your client’s 2020 tax return as early as possible ensures that the IRS has accurate bank information, mailing address, income and dependent information before the third stimulus checks are sent out.
If your client had a child in 2020 or experienced another major life change that affected their tax return, you should encourage them to schedule an appointment with you as soon as possible. They may be eligible for more stimulus money if they file their 2020 tax return before they receive their third check.
Will my client owe taxes on this third stimulus check?
No. Stimulus payments are not subject to federal taxes.
What if my client is still waiting for the first stimulus check?
If your client never received their first or second payment, you can help them claim them on their 2020 tax return. Fill out line 30 on Form 1040 to claim the Recovery Rebate Credit.
Does this bill include provisions for my clients who are on unemployment?
Yes, this bill will tentatively provide an additional $400 per week for anyone receiving unemployment benefits.