The recent approval of President Biden’s $1.9 trillion American Rescue Plan Act has sparked a great deal of curiosity and questions among Americans regarding the third round of stimulus checks. With the aim of providing financial aid to struggling individuals and families affected by the ongoing pandemic, understanding the worth of this much-awaited relief package is crucial. In this article, we will explore the key questions surrounding the third stimulus check and provide comprehensive answers to help you gain clarity on the matter.

Who is eligible for the third stimulus check?

The eligibility criteria for the third stimulus check largely follow the previous two rounds. Individuals with an adjusted gross income (AGI) of $75,000 or less, heads of household with an AGI of $112,500 or less, and married couples filing jointly with an AGI of $150,000 or less are eligible for the full amount. However, the stimulus check amount gradually decreases for those earning above these thresholds, and is phased out completely for individuals earning above $80,000, heads of household earning over $120,000, and married couples earning over $160,000.

How much will the third stimulus check be worth?

The third stimulus check is set to distribute $1,400 to eligible individuals and an additional $1,400 per dependent claimed. This amount includes not only children but also adult dependents, unlike the previous rounds of stimulus payments. Additionally, the income thresholds for partial payments have been adjusted. Individuals with an AGI between $75,000 and $80,000, heads of household with an AGI between $112,500 and $120,000, and married couples filing jointly with an AGI between $150,000 and $160,000 will receive reduced amounts.

Will the third stimulus check be based on 2019 or 2020 tax returns?

The Internal Revenue Service (IRS) will primarily use the most recent tax return available to determine eligibility and calculate the payment amount. Therefore, if you have already filed your 2020 tax return, it will be used. However, if your 2020 return has not been processed by the time the IRS begins issuing payments, they will refer to your 2019 tax return.

Will receiving the third stimulus check affect my tax refund in 2021?

No, receiving the third stimulus check will not affect your tax refund in 2021. The stimulus payment is considered an advance tax credit rather than taxable income. Therefore, it will not be subject to federal income tax and will not reduce your refund amount or increase the taxes owed.

Will individuals on unemployment benefits receive the third stimulus check?

Yes, individuals receiving unemployment benefits will be eligible for the third stimulus check. This is an important inclusion in the American Rescue Plan Act, recognizing the financial hardships faced by individuals who have lost their jobs due to the COVID-19 pandemic.

Understanding the worth and eligibility criteria for the third stimulus check is crucial for individuals and families who have been eagerly awaiting this relief package. With the inclusion of adult dependents and adjusted income thresholds, the IRS aims to expand the reach of this aid and provide significant support to those who need it the most. As the distribution of the third stimulus check begins, it is important to stay informed and ensure that you meet the eligibility requirements to receive the full amount.

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