Biden’s Proposal for a Third Stimulus Check – This is a developing story. We will continue to update the article as soon as more information becomes available.
- Has the Third Stimulus Check Been Approved?
- What is the Amount of the Third Stimulus Check?
- What is the Timeline for the Third Stimulus Check?
- Who is Eligible for the Third Stimulus Check?
- How Would You Receive the Third Stimulus Check?
- Will You Have to Pay Back Money from the Stimulus Check?
- What Should You Do with Your Stimulus Check?
- What Else is Included in Biden’s Stimulus Package?
Just as most Americans received their $600 second stimulus checks from the U.S. Treasury in early January, then President-elect Joe Biden unveiled his $1.9 trillion American Rescue Plan that includes—you guessed it—a third stimulus payment. Now that President Biden has officially been sworn into office, should you start checking your account for a third check?
Has the Third Stimulus Check Been Approved?
Not yet. While there has been a lot of support from politicians for additional direct payments to taxpayers, a third stimulus check has not been approved yet.1
At the end of 2020, as Congress prepared to pass a COVID-19 relief package that included $600 stimulus payments, then-President Donald Trump called on leaders to increase the amount so taxpayers would receive $2,000 stimulus checks.2 But when all was said and done, that final push for $2K failed to pass in the Senate, and taxpayers received their $600 checks in the first couple of weeks of January this year.3
How Much Is the Third Stimulus Check?
Biden has proposed a $1,400-per-person ($2,800-per-couple) direct payment in this third round of stimulus checks to top off the $600 payment most eligible folks have already received—for a total of $2,000 in stimulus payments per person. It’s just one part of a much larger COVID-19 relief plan that also expands certain income tax credits, extends unemployment benefits for people who have lost their jobs during the COVID-19 pandemic, and provides more aid for renters and landlords. Yep, it’s a mouthful. We’ll take a closer look at what else is included later.
What Is the Timeline for the Third Stimulus Check?
Congress said they’ll make the president’s plan a priority, but it has plenty of hurdles to jump before you can expect any money to hit your bank account. It won’t be easy for the plan to win approval with some in Congress who aren’t wild about spending another $1.9 trillion on top of the $900 billion in COVID-19 relief they just passed last month. So, expect a lot of debate on Capitol Hill (like usual) as politicians try to work out a deal.4
If Congress does ultimately approve the third stimulus payment, you can expect things to move pretty quickly after that. With the last stimulus, the IRS and U.S. Treasury began sending out the second stimulus checks by direct deposit just a couple of days after Trump signed the bill. If a third stimulus is approved, expect payments to arrive just as fast as they did last time.
Who Is Eligible for the Third Stimulus Check?
Right now, we don’t know if the third stimulus check will come with changes in eligibility based on income. For the last two stimulus payments, single taxpayers earning up to $75,000 a year and couples earning up to $150,000 a year (based on 2019 tax returns) were able to get the full amount. Parents also received stimulus payments for each dependent child under age 17.5
This time around, Biden’s proposal for the third stimulus check would expand to cover any dependent over age 17. That means those who provide support for dependents like college students or adults with disabilities could receive additional stimulus money for each dependent, no matter their age.6
How Would You Receive the Third Stimulus Check?
Most people have received their previous stimulus checks by direct deposit with the bank account on file with the IRS. Payments were automatic for anyone who filed a 2019 tax return and/or receives Social Security benefits. If you don’t have direct deposit with the IRS, your payment would take a little more time and come as a check or debit card in the mail.7
Will You Have to Pay Back Money from the Stimulus Check?
You might. Here’s why: Some people were sent stimulus checks by accident. We know—imagine the government making a mistake, right? They made a whoops and sent out stimulus money to some people they shouldn’t have. Here’s why you might need to send your money back:
- You make more than the income limit to receive the stimulus money.
- You were given a check for someone who has died.
- You’re a noncitizen who files taxes.
- You don’t have a Social Security number.
- You’re a nonresident alien and your spouse isn’t an American citizen.
- You’re claimed as a dependent on someone else’s tax return.
If you know one of these details applies to you, the IRS expects you to find the error and send the money back to them. So go ahead and be honest (and proactive). You don’t want any surprises when you go to file your taxes after all.
How to Return a Paper Check That You Have Not Cashed or Deposited
If you’re one of those folks who has to send the money back, here’s what you need to do:
- Write “VOID” on the front of the check, but don’t fold or staple it—don’t even put a paper clip on it.
- On a sticky note or sheet of paper, write down the reason you’re sending the check back.
- Mail the check back to your local IRS office (varies by state).
How to Return a Paper Check That You Have Cashed or Deposited
If you have already cashed or deposited the check (or it came to you via direct deposit), here’s how you can return the money:
- Make a personal check or money order payable to “U.S. Treasury.”
- Write out “2020 EIP” and include either the taxpayer identification number or Social Security number of the person whose name was on the stimulus payment.
- On a sticky note or sheet of paper, write down the reason you’re sending the check.
- Mail the check to your local IRS office (varies by state).
What Should You Do With Your Third Stimulus Check?
Let’s be real: Three stimulus checks in a year is not normal. Sure, it’s nice to have a boost in your checking account balance. And for a lot of folks, those stimulus checks have kept food on the table. But don’t ever bank on the idea that another check is coming. If a third payment does come along, it could go a long way to help you catch up on bills, pay off debt, or build up your savings.
Based on your situation, here’s where you start:
If you’re out of work or missing a paycheck, use this stimulus money to protect your Four Walls:
Focus on the necessities so you can have peace of mind as you keep looking for work or get your income back up. That means if you’re working the Baby Steps and you’re out of work, pause your plan for now. Pile up cash until you have a steady income again. Then you can attack your debt. There’s nothing like fighting through a financial crisis to light your fire to be debt-free as soon as possible!
And don’t forget to budget—it’s the best way to make your money go further. EveryDollar is our free and simple budgeting app that will help you see exactly where you need to cut back on your spending.
On the other hand, if your job is safe and you feel like it’ll stay that way, use your stimulus money to build momentum on whatever Baby Step you’re on. Put your debt snowball into overdrive. Knock out your fully-funded emergency fund. Or talk to your investment professional about giving your retirement a big boost!
What Else Is Included in Biden’s Stimulus Package?
Like we talked about before, the president’s American Rescue Plan is full of big (and expensive) changes. It includes some of the proposals Biden campaigned on. Here’s a quick rundown:
- Increase the Child Tax Credit from $2,000 for dependents under the age of 17 to $3,000 for children ages 6–17 and $3,600 for children under age 6.
- Increase the Earned Income Tax Credit from a max of $530 to nearly $1,500. It would also raise the income limit from $16,000 to around $21,000 and allow workers over age 65 to claim the credit.
- Increase the Child and Dependent Care Tax Credit from a max of 35% of qualifying childcare expenses (up to $3,000 for one child and $6,000 for two or more children) to a max of 50% of qualifying expenses (up to $4,000 for one child and $8,000 for two or more).
- Increase weekly unemployment benefit payments under the Federal Pandemic Unemployment Compensation program from $300 to $400 and extend benefits under the Pandemic Emergency Unemployment Compensation program through September.
- Extend the payment relief for federally guaranteed mortgages as well as the moratorium on evictions and foreclosures until September.
- Provide $30 billion in support for renters and landlords.
- Raise the minimum wage to $15.
And there’s more: Biden’s plan also includes grants and loans for small businesses, aid to state and local governments, money for COVID-19 vaccine distribution and testing, money to reopen schools, support for colleges and childcare providers, and more paid sick time for folks who have or are quarantining due to COVID-19 or are caring for family members who are sick.8
Focus on What Goes on at Your House—Not the White House
It’s hard not to worry as you watch billions and trillions of dollars fly out the window in Washington, D.C. And while those things matter, the truth is, you have ultimate control over your money and what choices are made in your house. You have the power to improve your money situation right now—today—without having to rely on the government.
Elearners will show you exactly how to do that and will give you all the tools, classes, and motivation you need to pay off debt, increase your savings, and build wealth for a secure future. It’s worked for millions of people, and you can try it today for free! Take control of your future and get the hope you need—stimulus or not.