KEY PROVISION

Pandemic Relief for Individuals with $600 Direct Payment

Tax & Economic Provisions of 2021 Stimulus | January 2021

Modeled after the earlier stimulus checks disbursed in the spring of 2020, $166 billion of the pandemic relief appropriation was dedicated to direct payments to taxpayers.

• Single taxpayers reporting up to $75,000 of adjusted gross income (AGI) on their 2019 income tax return receive the full $600 payment with the amount being reduced ratably until full phase out at $87,000 of AGI.
• Married couples filing jointly receive $600 each if AGI does not exceed $150,000 with full phase out set at $174,000.
• Payments to those qualifying as heads of household begin phase out at AGI of $112,500 (full phase out at $124,500).
• The remittance also includes $600 for each dependent child below 17 years of age.

Eligible individuals must have a valid Social Security number and not be a nonresident alien or claimed as a dependent by anyone else. Each dependent child must also have a valid Social Security number or adoption taxpayer identification number.

The Department of Treasury is authorized to make advance payments based on taxpayers’ 2019 tax returns and remittances are made via direct deposit for taxpayers for which the IRS has bank account information. All others will receive either paper checks or debit cards.

Taxpayers who qualify but do not receive payments can claim the amount as a credit on their 2020 income tax return filed in 2021. Taxpayers will not be required to repay an advance stimulus payment that exceeds the amount of their eligible credit.