When the pandemic appeared out of nowhere, millions of Americans were pushed into unemployment and poverty. The federal government provided three stimulus checks since we were in severe need of help. The money was used for several things, including paying rent and starting a savings account.
Anyone who read the press coverage of the stimulus debates will recall how complicated the process was. It was always a question of when and if we would get any money at all. We’re still having similar debates in 2022.
Even though they were required, stimulation tests were conducted in secret. And there are a few facts about them that the majority of people in the United States may be ignorant of.
1. Stimulus checks were calculated using previous tax returns.
“The stimulus payouts were based on your 2019 or 2020 tax returns, depending on how quickly you submitted your 2020 tax return,” explained Nick Strain, senior wealth advisor at Halbert Hargrove. “Because the 2020 tax return due was May 17, 2021, and stimulus payments began in March of 2021, if you didn’t file your tax return until May, the IRS would have used your 2019 tax information.”
“If your income in 2019 exceeded the income thresholds but was less than $75,000 (adjusted gross income) for single filers or $150,000 (adjusted gross income) for married filers, you are eligible for the $1,400 stimulus in the form of tax credits on your tax return.” Examine your tax summary for 2019, 2020, and 2021 with your tax professional to see if you qualify for the 2021 tax payments.”
2. The vast majority of Americans used their stimulus funds responsibly.
According to R.J. Weiss, CFP, owner of the personal finance website The Ways to Wealth, “the vast majority of households wisely spent their stimulus payments.” “With their stimulus monies, the ordinary American family was extremely thrifty. The majority of households used their stimulus funds to pay off debt or save. Only 15% of respondents used the stimulus to increase spending, according to research.”
3. The Eligibility Requirements for the Stimulus Check Have Changed
Weiss noted, “Three stimulus payments were provided, and the eligibility conditions changed throughout.” “Just because you didn’t qualify for one round of stimulus money doesn’t mean you won’t qualify for the next.” Dependents of any age were counted on the third stimulus check, for example. The $500 incentive was not available to dependents aged 17 to 24 in 2020.”
4. You Don’t Have To Pay Taxes On The Money
According to Carter Seuthe, CEO of Credit Summit, “a considerable majority of Americans are unaware that their stimulus payments will be tax-free.” “Many people are bewildered by the nature of their stimulus cheques and are simply crossing their fingers that they won’t be taxed on them.” Because stimulus payments are not considered part of one’s total income, they are tax-free.”
5. The use of stimulus checks is being phased away.
According to Weiss, “the maximum AGI for couples filing jointly to receive the entire stimulus is $150,000.” “If you earn more than $150,000, this amount is reduced.” To put it another way, even if your salary is $150,001, you will be eligible for a stimulus.”
6. There’s still a chance you’ll get compensated (But Hurry)
“If your check got lost in the mail or shoved to the back of your drawer and expired, you’re not out of luck yet,” said Cliff Auerswald, president of All Reverse Mortgage, Inc., who has worked with clients who received stimulus benefits to assist them to stay up with their debt payments.
“Because having valid checks floating around indefinitely is a significant security risk,” Auerswald explained, “every government-mailed US Treasury check has a one-year expiration date.” “However, only the paper expires, not your right to the money.” If your check has expired, contact the IRS to get a new one issued so you may get your money back. You can get a replacement if your stimulus check is lost or stolen.” If you never received a check in the first place, it’s not too late.
“People who didn’t get the whole amount of the third stimulus check can still get it,” said John Robinson, a Credello financial planning counselor. “All they have to do now is file their 2021 taxes and stake their claim for the recovery rebate tax credit money they are owed.”
7. Some people may be eligible for a Recovery Rebate Credit.
“When they pay their taxes in 2021, people who claim unpaid stimulus checks will receive a recovery rebate credit,” Robinson added. “While the majority of people who have already received their stimulus checks will not receive a rebate credit, those who have not gotten the complete amount will receive this credit, cutting people’s tax bills and resulting in bigger tax refunds.”
“The Child Tax Credit and the $1,400 Covid-19 aid measure are also impacted.” According to IRS data, a significant percentage of people did not receive their full credit and have already paid their taxes, which is why the average refund amount has increased.”
8. There’s a chance your state has its stimulus plan.
According to Weiss, “certain states in the United States, such as California and Florida, provided added stimulus to residents.” “In Florida, for example, many first responders and educators are eligible for a $1,000 stimulus payment from the state. In other cases, unlike federal stimulus checks, it may be essential to apply for the payout. To learn if you’re eligible, check with your state.”
9. It’s possible that we won’t get any further checks.
“Though rumors have persisted,” Fig Loans co-founder and CTO John Li said, “the probability of a fourth stimulus payment arriving at Americans is pretty improbable.” “Many low-income Americans could use an extra $2,000 to help them pay their bills for a little longer. Nonetheless, Biden’s administration is more focused on stimulating the economy through infrastructure and job creation than on handing out stimulus payments.
“With inflation at an all-time high of 7.5 percent in January, the government is doing everything it can to slow growth.” Policymakers are hesitant to issue another stimulus check because the previous ones contributed considerably to last year’s inflation, worrying that the ‘inflation scenario’ may worsen.”