For most people this is a welcome boost and is very much needed to get them through the next month or so.
If you didn't know this money comes from the Phase-3 plan from the 2 Trillion relief bill that was passed. The idea is to give each American $1,200 to help them through these tough times. And an addition $500 for each child under 18. Combine this with people spending less money it can be very helpful. For families who were laid off or have a stop work this probably isn't enough.
We got out auto-deposit check yesterday. I didn't think we were going to get one because my wife and I both work and I though our income would put us over the limits.
To break it down they have a phase out period.
- UPDATE for 2021 around - Change the check amount to whatever the Feds passed. As of 1/2021 it is 600 for individual, but this can change anytime if it does. All this mean is you will get less and phase out is much quicker. for the changes below.
- Make less then $75,001 on your 2018 return your get the full $1,200 (add 500 for each kid)
- If you make more then you lost 5% for
- 1,200 - <refund reduction> = (<income> - 75,000) * .05
- Example 100,000 - 75,000 = 25,000 - salary over
- 25,000 * .05 = 1,250 since 1,250 > 1,200 you don't get anything.
- 1,200 - 1,250 = -50 - you are over
- It turns out the phaseout max is $99,000 for a single filer
- If you are a head of house filer with one child $136,500 is the max
Joint Return:
- Make less then $150,001 on your 2018 return your get the full $2,400 (add 500 for each kid)
- If you make more then you lost 5% for
- 2,400 - <refund reduction> = (<income> - 150,000) * .05
- Example 160,000 - 150,000 = 10,000 - salary over
- 10,000 * .05 = 500 - since 500 < 2,400 you will get a return
- 2,400 - 500 = 1,900 - you will get 1,900 stimulus check
- It turns out the phaseout max is $198,00 for a joint filer no kids
- Here is were it wasn't initally clear for me. I didn't relize that the kids 500 is added into the 2,400 amount before they apply the max. I assumed since our return have over the phase out we weren't going to get anything. It breaks down to check kids is the same as making $100 more on your 2018 return i.e the max with kids under 18 is $198,000 + (10,000 * # of kids). A max refund is $3,400 for a family with two kids and a max earned income of 217,999 for 2018.
Lets see the math.
- 3,400 - <refund reduction> = (<income> - 150,000) * .05
- Example 217,999 - 150,000 = 67,999 - salary over
- 68,000 * .05 = 3,399.98 - since 3,399.98 < 3,400 you will get a return
- 3,400 - 3,399.98 = .05 - you will get .05 stimulus check
- It does work
I know money is money, but honestly I shouldn't have gotten a check. Our jobs are not at risk and I know Feds wouldn't of known this. There is better uses for this money then going into my pocket. What I looking into doing is donating the money through my work which will match 100% and will double this money to help others. I pass this money on to our local zoo, museums and food shelters. All which I've never done in the past.
Be safe and enjoy
