Some Words About the Latest Stimulus Payment (Part 1)
This month Congress passed and President Biden signed into law a $1.9 trillion COVID 19 stimulus package. This new law includes, among other things, another immediate payment to millions of Americans in need.
Like the first 2 stimulus payments (which were $1200 last year and $600 in January, 2021 for eligible persons), this latest payment is based on an income threshold of $75,000 per year for single individuals and $150,000 for married couples. The phaseout of these payments, however, has been shortened. Once you reach income limits of $80,000 ($160,000 for married couples) you get nothing.
There are some other important changes from the previous rounds of payments. Children and adult dependents such as college students and older relatives are eligible for the full $1400. A married couple with 2 children now will receive $5600.
We have already heard from clients who have received their payments. If the IRS has direct deposit information, payments will be made electronically which is the fastest way. This will typically be the case for anyone who has paid taxes or received refunds electronically.
Where the IRS does not have this information, paper checks or debit cards will be issued. Those who received debit cards previously will get new cards. The old cards issued last year won’t be reloaded.
Medicaid will treat these payments the same way as it did for the previous two rounds of stimulus. Stimulus payments are not countable assets as long as they are spent down within 1 year from the date they are received.
What if your income has changed since last year? I’ll go over that next week.