Stimulus update: $1,400 checks could come with new income limits, tax tie-in
The Senate has just started work on the $1,400 stimulus checks and is already making changes. We've got answers to your questions on the new stimulus payment.
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The third stimulus check looks to be on track for approval by Congress in the next few weeks. But that doesn't mean everything around the next round of payments -- including who would qualify and how much you could expect to receive-- is set in stone. The Senate has already proposed a significant change for the direct payment that's part of the $1.9 trillion bill and it could make more during an hours-long amendment process in the next few days where any Senator can propose changes to the relief bill.
To help make sense of it all, we look at key stimulus check details as the payments head toward approval. We'll tell you everything you need to know about how some rules have changed (around garnishment, for example) and when it's time to file a payment trace for your missing stimulus money. (Here is how the three stimulus checks compare too.) This story is updated frequently with the latest information.
The Senate is working on the $,1,400 checks -- and making changes
The Senate didn't waste much time making changes to the sweeping stimulus bill the House approved late Feb. 26, proposing at least one significant adjustment to the income requirements for the third stimulus check for $1,400.
The House set an upper cap on income to cut off payments for higher earners: Under the House plan, individuals with an AGI (adjusted gross income) of $100,000 a year would have been excluded from receiving any payment. Heads of household earning $150,000 a year and couples earning $200,000 would also have been above the upper limit to qualify for money.
The Senate dropped those upper income limits to exclude more high earners from receiving any money. Under the Senate plan, single taxpayers would be over the income limit with an AGI of $80,000, heads of household at $120,000 and those who married and file jointly at $160,000. Under the House bill, 297 million people would have recieved a payment, according the Institution of Taxation and Economy Policy, a left-lean think tank. Under the Senate's plan, nearly 17 million people who qualified under the House plan would not make the cut, with 280 million people qualifying for money, the institute said.
Watch this: Stimulus check No. 3: What you need to know
How Democrats will speed approval of the third round of payments through Congress
Congressional Democrats are pressing to hit a mid-March date before some federal pandemic-assistance programs begin to expire, including expanded unemployment benefits that end by the middle of the month. To meet that aggressive deadline, Congressional Democrats are using a powerful, little-used tool called budget reconciliation to speed passage of the economic rescue bill. The reconciliation process allows the Democrats to bypass opposition to the legislation but there are strict rules about what budget items can and can't be included in the bill. Senate staff ruled a hike to the minimum wage would not meet the guidelines for the bill.
Tax season 2020 is important for stimulus checks, even if you're not usually required to file
A third stimulus check could go even faster than the first two did
Congressional Democrats are pushing to send out the third round of payments quickly, possibly before the end of March. If the new bill becomes law by March 14, the IRS could start making payments within days -- as it did with the second round of checks -- now that it has a system in place for processing the payments. Here's what a payment timeline could look like.
More types of people could qualify for a third stimulus check -- but fewer could, too
The stimulus bill now with the Senate expands who qualifies for a check and includes at last two groups left out of the first payments: dependents of any age and families with mixed-status citizenship (meaning some members are not US citizens).
But the current bill also excludes some who may have qualified for a payment with the first two checks. Congress has settled on the third stimulus check coming with a per-person maximum of $1,400. But by setting a hard cap on the upper income limit to qualify for a payment, some in the upper-income category may not receive any money at all, for themselves or their dependents.
Your stimulus check rights improved with the second round -- but not without exceptions
Usually, stimulus dollars are yours to spend or save as you please. You can't be compelled to spend your proceeds on rent, car payments, back taxes or debt -- or even unpaid child support. But some of the rules changed for the second check that went out in January.
It isn't clear whether anything would change for a third check. And there is still an exception that allows at least one entity to garnish your stimulus money. Make sure you know your stimulus check rights.
Stimulus check rules and exceptions are pretty complicated
With stimulus checks, the small details and exceptions can be dizzying. While some situations are easy to decipher, others concerning you and your dependents might make it unclear if you're eligible, how much money you may receive and if there's anything extra you have to do to claim your money.