The push for a third stimulus check started in December before the second-round of $600 payments were even authorized. So, we've had to wait a couple of months to see how this would all play out. But now, finally, we can clearly see the light at the end of the tunnel.
SEE MORE Third Stimulus Check Calculator
Early Saturday morning, the House of Representative passed the budget reconciliation bill that is being used to usher President Biden's $1.9 trillion stimulus package through Congress. (Reconciliation is a Congressional procedure that allows passage in the Senate with a simple majority vote instead of the usual 60 votes needed to avoid a filibuster.) If the bill is passed in the Senate – which is expected to happen by March 14 – the IRS will start processing the next round of stimulus checks shortly thereafter.
For most Americans, that news will trigger a familiar stimulus check question: How much will I get? You've probably heard by now that third-round stimulus checks will be for $1,400. And, based on the bill passed by the House, that's correct. But that's just the starting point. There's also an additional amount for dependents, and a phase-out scheme that can reduce your stimulus payment to zero if you make too much money.
SEE MORE Your Guide to Roth Conversions
If you just want a quick estimate of your third stimulus check amount (based on the House bill), check out our Third Stimulus Check Calculator. If you want to know more about how that amount is calculated, keep reading.
[Stay on top of all the new stimulus bill developments – Sign up for the Kiplinger Today E-Newsletter. It's FREE!]
Calculating Your Third Stimulus Check Amount
According to the bill passed by the House, there's a $1,400 third stimulus check "base amount" that every eligible person will receive. For married couples that file a joint tax return, the base amount is $2,800.
SEE MORE 2021 Child Tax Credit Calculator
Then, for each dependent in your family, an additional $1,400 will be tacked on. Note that, unlike the extra amount for first- and second-round stimulus checks that was only added for dependent children 16 years old or younger, the additional amount will be included on third-round stimulus checks for any dependent – regardless of their age. So, for example, you'll get an extra $1,400 for older dependent children (including college students age 23 or younger) or elderly parents who are living with you.
Now for the bad news. As with the first two stimulus payments, third-round stimulus checks will be reduced – potentially to zero – for people reporting an adjusted gross income (AGI) above a certain amount on their latest tax return. If you filed your most recent tax return as a single filer, your third stimulus check will be phased-out under the bill passed by the House if your AGI is $75,000 or more. That threshold jumps to $112,500 for head-of-household filers, and to $150,000 for married couples filing a joint return. Third-round stimulus checks will be completely phased out for single filers with an AGI above $100,000, head-of-household filers with an AGI over $150,000, and joint filers with an AGI exceeding $200,000.
Assuming the House bill is enacted without change, your filing status, AGI, and number of dependents will be taken from either your 2019 or 2020 return. If your 2020 return is already filed and processed when the IRS is ready to send your payment, your stimulus check will be based on information from your 2020 return. If your 2020 return isn't filed and processed at that point, the IRS will use your 2019 return. If your 2020 return is filed and/or processed after the IRS sends you a stimulus check, but before July 15, 2021 (or September 1 if the April 15 filing deadline is pushed back), the IRS will send you a second payment for the difference between what your payment should have been if based on your 2020 return and the payment actually sent based on your 2019 return.
Again, you can use our handy Third Stimulus Check Calculator to get a customized estimated payment amount. All you have to do is answer three easy questions. Plus, for more information about the proposed third stimulus check provisions, see The Current Plan for a $1,400 Third Stimulus Check.