Stimulus check formula revealed: How the IRS calculates your second payment total

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Stimulus check formula revealed: How the IRS calculates your second payment total

What makes some people eligible to receive a second stimulus check, while others won’t qualify for the up-to-$600 per person payment that the IRS is currently sending out now? The answer includes a long list of second stimulus check requirements on one hand, and other the other, how much money you made between 2018 and 2019 tax season. More specifically, your second stimulus check total depends on your AGI and how many dependents you can claim.

That’s the “simple” answer, at least, but it isn’t the complete picture. Another layer beneath that is a formula that’s actually written into the language of December’s COVID-19 stimulus bill. This equation calculates how big a stimulus check the US Treasury will cut you.

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What’s interesting — and ultimately really important — is that the second stimulus check uses the same equation as the first one. And because of that, some people who got the first stimulus payment won’t be eligible for this one (or they’ll qualify for a smaller portion of the stimulus money) even if every other qualification remains the same.

How does the IRS calculate your stimulus payment?

For most people, the answer is “your federal tax return.” Assuming you meet all the other qualifications, the IRS enters the adjusted gross income you put on your 2019 federal tax returns into a formula, plus the number of eligible child dependents you claim. If the result is under a maximum limit, you will receive at least some stimulus check money. If the number is above it, you won’t receive any. (If you don’t typically file taxes, here’s what you need to know.)

There’s a sliding scale involved. As with the first check, if your AGI is less than $75,000 as a single taxpayer (that means no kids), you’ll receive the entire second stimulus check total of $600. If you made more than that, the size of your check would diminish until it hits the income limit, after which point you’d be ineligible.

This is the same equation that the IRS used for the first stimulus check, for a $1,200 per person maximum. But the fact that this check is $600 actually lowers the maximum income limit you could hit, which means that more people will hit the limit sooner. A $600 flat payment for children 16 and younger could help mitigate that (more below, it gets a bit more complex).

This chart will help illustrate the income limits and the difference between the first and second stimulus checks…Read more>>

Source:-cnet

 

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