TaxAct Stimulus Center

The current $1.9 trillion American Rescue Plan includes an additional $1,400 stimulus payment to qualifying individuals. The latest proposal for the payments looks like this:

• Individuals will receive $1,400

• Married couples will receive $2,800

• Individuals with dependents will receive $1,400 per dependent

As with the first and second stimulus payments, an income threshold will be included for the third payment. On Feb. 9, the House Ways and Means Committee put forth the first draft of the bill, which included information on the income thresholds. As the bill currently reads, the income thresholds will remain the same as they were with the first and second stimulus payments but the point at which the payments will begin to phase out were lowered. The total stimulus payment would phase out for Single filers with incomes between $75,000 and $100,000 and $150,000 and $200,000 for joint filers. As we learn more, we’ll update this section to help you accurately calculate your potential 3rd stimulus payment.

Past stimulus payments were based off adjusted gross income (AGI), and we assume the third round will be the same. (ProTip: AGI includes income from wages, salaries, or interest minus adjustments for specific deductions, like student loan interest or retirement contributions.)

When it comes to receiving your third stimulus payment quickly and accurately, it is in your best interest to file your 2020 tax return as soon as possible. Once the stimulus payments are signed into law, the IRS will be tasked with promptly issuing those payments. Filing your 2020 tax return now will give the IRS the updated information it needs to process your payment.

The IRS needs your most recent bank account details, mailing address, and dependent information to accurately calculate and send out your third stimulus payment. Filing now is the quickest way to get that information to the IRS in preparation for the third payments being sent out.

For many individuals, filing your 2020 tax return as early as possible is the best action to take at this time so the IRS has what it needs from you in the event the third round of stimulus payments are signed into law. The IRS needs your current banking details, mailing address, and dependent information to accurately process stimulus payments.

The following is a list of situations when filing your return as soon as possible is likely in your best interest as it relates to getting your stimulus payment:

• Your income was significantly less in 2020 than in 2019: If you earned less income in 2020 than you did in 2019, filing your return now will give the IRS your updated income information to accurately calculate what you are owed for a stimulus payment. For instance, if your 2019 income previously pushed you above the stimulus income thresholds, and therefore, you didn’t qualify to receive a payment or your payment was reduced, your lesser 2020 income may now qualify you to receive some stimulus money.

If you do not file before the stimulus payments are sent out, the IRS will calculate your payment based on your 2019 tax return data. In that instance, they will continue to assume your income is above the thresholds and not issue a payment. But if they have your 2020 tax data on file, they will see that your reduced income now qualifies you to receive a stimulus payment.

• Your bank account or mailing address changed since you filed your 2019 tax return: Filing your 2020 return is the best way to submit your updated information to the IRS so they can properly process your third stimulus payment as quickly as possible.

• You had a baby or adopted a child in 2020: By adding a new dependent to your tax situation, you likely qualify to receive additional stimulus dollars. Filing your return ahead of the first wave of payments will allow you to receive the correct amount of stimulus money as early as possible.

On the flip side, below is a scenario when it may make more sense for you to wait to file your 2020 tax return in order to receive a larger stimulus payment:

• Your income level increased in 2020 versus 2019: If your income actually increased in 2020 compared to what it was in 2019, and now puts you above the income qualifications for a third stimulus payment, it is likely in your best interest to wait to file so the IRS uses your 2019 tax data to calculate your payment.

The stimulus payments that have been issued over the past year to provide financial relief related to the COVID-19 pandemic are an advance of a tax credit called the Recovery Rebate Credit. The first and second stimulus payments were an advance of that tax credit for your 2020 federal tax return, meaning they were – ultimately - reflective of your 2020 tax year.

At this time, it has not been formally announced what tax year the potential third stimulus payment will apply to. Our estimation is that it will be an advance of the Recovery Rebate Credit on your 2021 tax year, but the IRS will be instructed to use your 2020 tax return information to calculate your payment. The credit will then be reconciled on your 2021 federal tax return when you file it next year.

That is a similar process to what occurred with the first and second stimulus payments. Those payments were originally calculated based off your 2018 or 2019 tax return information but are now being reconciled on your 2020 federal tax return.

Nothing. All of those terms refer to the same payment. The IRS changed the way they referenced the payments throughout 2020. First the money was called a stimulus payment but later was given the more formal name of Economic Impact Payment.

The Recovery Rebate Credit is how the payment is referred to on the federal tax return. The stimulus payment or Economic Impact Payment – whichever name you prefer - is an advance of the Recovery Rebate Credit, but all names refer to the same amount of money.

No. Like the first and second stimulus payments, the third payment will also not be taxable as it is an advance of a tax credit called the Recovery Rebate Credit.

At this time, this information is not final. The American Rescue Plan, which includes the third round of stimulus payments, is currently making its way through Congress. White House officials have said they are determined to finalize the legislation before mid-March.

For details on the progress of the passage of this bill, refer to the weekly updates available at the top of this page.

The 3rd round of stimulus payments are not yet finalized. Therefore, no payments are being issued at this time. Continue to check back to this page for updates on passage of the bill

To check the status of your 2nd stimulus payment, use the IRS’ Get My Payment tool.

If you are eligible to receive a third stimulus payment, not having a bank account should not stop you from receiving your money. The IRS will likely issue paper checks as they did with the first and second stimulus payments. Keep in mind, a mailed payment will take longer to reach you once the IRS starts issuing them.

The best way to update your bank account information with the IRS is to file your 2020 tax return. We highly encourage you to file as soon as possible as the IRS needs your most recent bank account details, mailing address, and dependent information to accurately calculate and send out your third stimulus payment. Filing your 2020 return will help ensure the IRS can quickly process your payment once the stimulus is signed into law.

At this time, we do not know if the IRS will provide another method for submitting your bank account details to receive your stimulus money. We highly encourage you to file your 2020 return so that there is no delay in you receiving your third stimulus payment when the IRS starts issuing them.

Under the current proposed plan, adult dependents – meaning children over the age of 17 - are eligible for an additional $2,000 in stimulus money. That includes college students or disabled adults. *Please note, the proposed plan and all details included are not yet final.*

While the proposed bill for a third stimulus payment has not been finalized, it is likely you would qualify to receive a payment. Our assumption is that the IRS will use the information from Form SSA-1099, Form RRB-1099, or the Veterans Administration to generate your stimulus payment as they did with the first and second stimulus payments.

It’s been reported that roughly 5.7 million people living in the state of California will qualify to receive this state issued stimulus payment. You must file your 2020 California state tax return to receive the stimulus payment. The qualifications for the payment are as follows:

• If you earned $30,000 or less in 2020, filed your 2020 tax return with a Social Security number and claimed the Earned Income Tax Credit (EITC) on your California state return, you qualify to receive a $600 stimulus payment.

  • If you already filed your 2020 state tax return but did not claim the EITC, you need to file an amendment and claim the credit to qualify for the payment.

• If you earned $30,000 or less in 2020, filed your 2020 California state tax return with an individual taxpayer identification number, you qualify to receive a $1,200 stimulus payment.

• If you earned $75,000 or less in adjusted gross income in 2020, filed your 2020 California state tax return with an individual taxpayer identification number, and do not qualify to claim the Earned Income Tax Credit on your California state return, you qualify to receive a $600 stimulus payment.

If you qualify for the payment and choose to receive your state tax refund via direct deposit, you can expect to receive your California issued stimulus payment within 45 days after receiving your state tax refund. It will take up to 60 days to receive your stimulus payment if you elect to receive your state tax refund by paper check. In the event that you received an advance refund from your tax preparation service, you can expect to receive any stimulus funds you qualify for via paper check.

For more information on the Golden State Stimulus, visit the State of California Franchise Tax Board page.

As part of the recently passed coronavirus relief package in the state of Maryland, qualifying individuals may receive up to $300 in stimulus payments and qualifying families may receive up to $500 in stimulus payments. To meet the eligibility requirements, you must have claimed the Earned Income Tax Credit (EITC) on your 2019 Maryland state tax return and annually earned:

• $50,954 ($56,844 married filing jointly) with three or more qualifying children

• $47,440 ($53,330 married filing jointly) with two qualifying children

• $41,756 ($47,646 married filing jointly) with one qualifying child

• $15,820 ($21,710 married filing jointly) with no qualifying children

The majority of the Maryland stimulus payments are set to be issued by Friday, Feb. 19. If you are eligible to receive a payment, you do not need to take any action to get the money.

For more information on the RELIEF Act and the state issued stimulus payments, visit the Comptroller of Maryland page.