This year stimulus checks are being sent to taxpayers in the US to help provide relief for the economic hardships that have resulted from the coronavirus pandemic. The U.S. government is hoping to incentivize spending and help get people back on their feet.
The COVID-19 pandemic may have caused you to lose your job or you may be having to work extra hours. The experience across the United States is varied and complicated and the stimulus check is an attempt to right the balance. But how do you get a stimulus check, are you eligible and if you are, when will it arrive in your mailbox?
In this post we’ll give an overview of what this stimulus check may mean for you and how to check on stimulus checks and your eligibility.
Economic Impact Payments
Economic Impact Payments also known as “stimulus checks” are government initiatives meant to reenergize the economy. “Stimulus checks are intended to stimulate the economy by providing consumers with some spending money. Taxpayers receive this money because it’s intended to boost consumption and drive revenue at retailers and manufacturers, spurring the economy.”(investopedia)
The stimulus checks are often used after times of serious economic hardship, like in the months following the financial crisis of 2008. As a result of the coronavirus pandemic and the subsequent worldwide lockdowns, many people have suffered financially. Many have lost jobs, lacked the money to pay rent and seen opportunities disappear.
The stimulus check is intended to address these problems. On the official website for the United States government they state that:
“The American Rescue Plan Act of 2021 provides $1,400 Economic Impact Payments for people who are eligible. You do not need to do anything to receive your payment. It will arrive by direct deposit to your bank account, or by mail in the form of a paper check or debit card.”(USA.GOV)
How does the system work?
You may be saying, “how will we get our stimulus check?”. Thankfully, it is a relatively straightforward process. The nature of the program must be simple and accessible in order for it to work.
The American Rescue Plan Act of 2021 empowers the government to send out checks to eligible individuals. And the system works like this: “The IRS confirms your eligibility, calculates how much you should receive, and sends a stimulus payment. If you enter your bank account information, the IRS will deposit your payment directly in your account. Otherwise, your payment will be mailed to you.”(AARP)
Am I eligible?
You can assess your eligibility for this round of the economic impact payment here. The official website of the US Government and the IRS page provides extensive and detailed guidance on your eligibility. That is the best place to check your stimulus status.
Whether you were eligible for the first rounds of the economic impact payment is a good indicator of your eligibility for this third round. “Generally, you were eligible for the first Economic Impact Payment if you are a U.S. citizen or U.S. resident alien, you were not claimed as a dependent of another taxpayer and have a Social Security number valid for employment.”(IRS)
In 2020 the U.S. government issued payments of $1,200 ($2,400 for a joint return) to individuals whose adjusted gross income (AGI) did not exceed:
- $150,000 if married and filing a joint return
- $112,500 if filing as head of household or
- $75,000 for eligible individuals using any other filing status
Payments were reduced by 5% of the amount by which your AGI exceeds the applicable threshold above. (IRS)
They also established that “you were not eligible for the first payment if any of the following apply to you:
- You were claimed as a dependent on another taxpayer’s return (for example, a child or student who may be claimed on a parent’s return or a dependent parent who may be claimed on an adult child’s return).
- You are a non-resident alien.
- You do not have a Social Security number that is valid for employment.”(IRS)
Generally, if you meet the above criteria then according to the American Rescue Plan Act (ARPA), you and your dependents will be able to qualify for the full $1,400 payment. This third round provides more money than the previous two and the U.S. government is hoping it will be an effective strategy to get people spending again during this difficult time.
When is the stimulus check arriving?
As of April 2021, two rounds of stimulus checks have already been paid out. “The IRS issued two previous Economic Impact Payments: $1,200 in April 2020 and $600 in December 2020/January 2021.”(Gov)
The third round of stimulus checks are being sent out now. Many had begun to receive the payments on March 17th. But it is important to note that the stimulus checks are being sent out in phases. Therefore, just because you haven't received one yet doesn’t mean that you will not get one. They will be being issued to eligible individuals throughout April.
Visit the IRS website to see how to check on stimulus check status.
What will this mean for you?
This stimulus check could be a life-saving sum of money, It may make it easier to pay rent and afford groceries. It may also mean you are able to send money home to family or help out your friends. The money is meant to get you back on your feet and incentivize consumption.
Research has shown that most people are putting their stimulus checks towards saving and debt payments. The U.S. government would prefer you to spend your stimulus check now. However, most will look to use the money to take care of their families’ future. We live in uncertain times and many people will want to save or share the payment in order to support family and friends.
As quarantine measures ease throughout the year you may also have more opportunities to spend your stimulus check in ways that enhance and enrich your life. You can calculate how much you are likely to receive for your stimulus check here.
Small World’s Money Transfer Service
If you are eligible to receive the stimulus check you may want to send money to family or friends. Small World’s money transfer service can help you send and receive money in the United States and many other countries across the world.
We know the past year has left many people in financial difficulties and we want to help you get your money where it needs to be.