Coronavirus and Your Money

Republican Senators Propose "Targeted" $1,000 Stimulus Check Plan

Ten moderate Republican senators are asking President Biden to consider a more targeted stimulus package that includes a $1,000 stimulus check component.

In an effort to reach a bipartisan COVID-relief plan, 10 moderate Republican senators are offering a more "targeted" alternative to President Biden's $1.9 trillion stimulus plan. An important piece of the Republicans' counteroffer is a third-round of stimulus checks at $1,000 per eligible person ($2,000 for married couples). This is likely to fall short of the president's expectations, since his plan calls for $1,400 payments and many Democratic lawmakers want $2,000 stimulus checks. However, Biden agreed to meet with the Republican senators on Monday to discuss their entire stimulus plan, which at $618 billion is less than a third as costly as the president's plan.

The phase-out thresholds for the $1,000 stimulus checks would also be lowered, and the phase-out rate would be adjusted, so that fewer people receive a payment. For the first two stimulus checks, payments were reduced at a rate of $1 or every $20 of adjusted gross income (AGI) over a certain threshold amount. Higher-income people saw their stimulus checks reduced to zero. The AGI threshold for single Americans was $75,000 for the first- and second-round payments and $150,000 for married couples filing a joint tax return. Biden's $1,400 payments would be phased out starting at the same AGI levels. Under the Republicans' plan, the $1,000 stimulus checks would be reduced at a rate of $1 for every $10 of AGI above $40,000 for single people and above $80,000 for married couples.

The Republican plan also calls for an extra $500 for each dependent child or adult in the family. The Biden plan also calls for additional payments for each dependent in the family regardless of age, but the president hasn't said how much those payments would be (although speculation is that it would be $1,400 per dependent). The first- and second-round stimulus payments included $500 and $600 additional payments, respectively, but they were only available for dependent children age 16 or younger.

[Stay on top of all the new stimulus relief developments – Sign up for the Kiplinger Today E-Newsletter. It's FREE!]

The charts below illustrate how the phase-out would apply to $1,000 payments, plus the extra $500 for dependents, using the Republicans' proposed phase-out thresholds.

SINGLE PEOPLE ($40,000 THRESHOLD)

 

NUMBER OF DEPENDENTS IN THE FAMILY

AGI

0

1

2

3

4

5

≤ $40,000

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$45,000

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$50,000

$0

$500

$1,000

$1,500

$2,000

$2,500

$55,000

$0

$0

$500

$1,000

$1,500

$2,000

$60,000

$0

$0

$0

$500

$1,000

$1,500

$65,000

$0

$0

$0

$0

$500

$1,000

$70,000

$0

$0

$0

$0

$0

$500

$75,000

$0

$0

$0

$0

$0

$0

*

MARRIED COUPLES FILING A JOINT RETURN ($80,000 THRESHOLD)

 

NUMBER OF DEPENDENTS IN THE FAMILY

AGI

0

1

2

3

4

5

≤ $80,000

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$85,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$90,000

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$95,000

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$100,000

$0

$500

$1,000

$1,500

$2,000

$2,500

$105,000

$0

$0

$500

$1,000

$1,500

$2,000

$110,000

$0

$0

$0

$500

$1,000

$1,500

$115,000

$0

$0

$0

$0

$500

$1,000

$120,000

$0

$0

$0

$0

$0

$500

$130,000

$0

$0

$0

$0

$0

$0

For more on how stimulus checks can be more "targeted," see Would You Get a "Targeted" Stimulus Check?

Under the Republican plan, convicted inmates would not receive a stimulus check. Other details to look for with regard to a potential third-round stimulus checks include whether the AGI phase-out thresholds are based on 2019 tax returns or 2020 returns, whether you need a Social Security number to qualify for a payment, and whether payments are subject to garnishment for past-due debts you owe. Stay tuned for more information.

Most Popular

Are You Still Chasing the Almighty Dollar, Even Though You Have Plenty to Retire?
retirement

Are You Still Chasing the Almighty Dollar, Even Though You Have Plenty to Retire?

In our experience, many have saved enough money to retire comfortably. Yet too many worry about their money running out and want more. Maybe it’s tim…
May 6, 2021
Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs
Coronavirus and Your Money

Child Tax Credit 2021: Who Gets $3,600? Will I Get Monthly Payments? And Other FAQs

People have lots of questions about the new $3,000 or $3,600 child tax credit and the advance payments that the IRS will send to most families in 2021…
May 4, 2021
20 Dividend Stocks to Fund 20 Years of Retirement
dividend stocks

20 Dividend Stocks to Fund 20 Years of Retirement

Each of these high-quality dividend stocks yields roughly 4%, and you can expect them to grow their payouts even more. That's a powerful 1-2 combo for…
May 7, 2021

Recommended

7 Money-Smart Ways to Spend Your Tax Refund
Tax Breaks

7 Money-Smart Ways to Spend Your Tax Refund

Since this year's tax deadline was pushed back to May 17, many people are just now filing their tax return. That means there are a lot of tax refunds …
May 8, 2021
IRS Extends Tax Deadlines for Alabama and Kentucky Storm Victims
Tax Breaks

IRS Extends Tax Deadlines for Alabama and Kentucky Storm Victims

Following FEMA's recent disaster declarations for severe storms in Alabama and Kentucky, victims of the storms in those states get more time to file a…
May 7, 2021
9 Reasons to File a Tax Return Even If You Don't Have To (Hint: They're Due Soon!)
tax filing

9 Reasons to File a Tax Return Even If You Don't Have To (Hint: They're Due Soon!)

Although you might not be required to file a tax return, it might be wise to file one anyway. Here are a few reasons why.
May 7, 2021
10 States With the Highest Sales Taxes
Tax Breaks

10 States With the Highest Sales Taxes

Before you embark on a shopping spree in any of the 10 worst states for sales taxes, make extra room in your budget.
May 6, 2021