Stimulus Safety Net in the New COVID Related Tax Relief Act 2021

Are you getting a stimulus check this time around? When can you expect it?

Congress recently approved a $900 billion government rescue package which President Donald Trump just signed. It contains a $600 stimulus payment for Americans earning up to $75,000, plus an extra $600 per child 16 years old or younger. Couples making up to $150,000 can receive $1,200. Theoretically, a married couple with two children can get up to $2,400.

Stimulus payments will be phased-out for some high-earning folks at a rate of $5 for each $100 of additional income above the thresholds. If your AGI is above $75,000, your check will be reduced whether you're single, married filing separately, or a qualifying widow(er). If you're married or a surviving spouse and file a joint tax return, it’s if AGI exceeds $150,000. If you claim head-of-household filing status, your payment will be reduced if your AGI is more than $112,500.

The good news is this second round of stimulus checks won't be included in your taxable income. Like the first round, it’s actually an advanced payment of a new "recovery rebate" tax credit for 2020. Who is ineligible?

Not everyone will get a stimulus check:

• If your income is high enough, your check will be completely phased out. This means an individual without children will not receive any payment if their AGI exceeds $87,000. A couple without children won’t receive any payment if their AGI exceeds $174,000. A family of four won’t receive any payment if their AGI exceeds $198,000.

• Anyone who can be claimed as a dependent on someone else's tax return won't receive a second stimulus check and can't claim the recovery rebate credit on their 2020 tax return. That means no payments to children living at home who are 17 or 18 years old, or to college students who are 23 or younger at the end of the year who don't pay at least half of their own expenses.

• Other dependents such as an elderly parent living with you won't get a check.

• Nonresident aliens are not eligible to receive a second stimulus check.

Treasury Secretary Steven Mnuchin said many people could start receiving stimulus checks as early as next week, and most by January 15th. If the IRS already has your bank account information—either from a recent tax payment or a tax refund, expect to get your second stimulus check faster because the IRS will be able to directly deposit the payment into your bank account.

Please note - if you had a baby in 2020, you won't get an additional $600 in your second stimulus check because your new him or her wasn't claimed as a dependent child on your 2019 tax return. You can, however, get an additional $600 recovery rebate credit for your new baby on your 2020 tax return.

If you never received your FIRST stimulus check and were eligible, please contact your Fuoco Accounting Manager - you may be able to take it in April when you file as it was actually an advanced payment of the 'recovery rebate" tax credit for 2020.

Reach Out To Us: This latest round of stimulus relief is welcome, and remember more relief may be enacted after President-Elect Joe Biden is inaugurated.  If you need assistance with tax planning for 2020 or 2021, please reach out to our tax professionals now at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 855-542-7537.