Every way your next stimulus check could be smaller this time

Once again, the state of the second stimulus check is up in the air, after an eleventh-hour objection by President Donald Trump Tuesday night regarding the size of the next direct payment. Trump has advocated an upper limit of $2,000 per person instead of a $600-per-person maximum in the second stimulus check, a figure many Democrats but few of Trump’s fellow Republicans have embraced since the first stimulus check was approved in March.

Trump indicated he would not sign the $900 billion stimulus bill into law without a $2,000 maximum for the second stimulus check. He argued for dropping other spending that’s part of an omnibus bill combining COVID-19 relief with measures to fund the government for the next year, including programs unrelated to the coronavirus pandemic.

If the tide changes and a new $2,000 ceiling prevails, tens of millions of families could get more than the first stimulus check. But if the current $600-per-person cap holds for a second stimulus check, there are multiple ways the rules could change to drop your total, or even disqualify you from a second check entirely. (By the way, President-elect Joe Biden has committed to a third stimulus check in 2021. Why Congress holds the key to a bigger stimulus bill.)

This story updates with new information.

The second stimulus check could top out at $600 per adult 

Although Trump has pushed for a $2,000 stimulus check, and other US leaders have also, over the past nine months, rallied behind a $1,200 upper limit, Congress’ scaled-back stimulus bill would give qualified adults and their child dependents no more than $600 apiece in a second stimulus check. Biden said Dec. 22 that he stands behind a third stimulus check as well.

That $600 rate alone would automatically give most households a smaller check than before. But that’s only if you get the full $600 amount. Turns out there’s more to it than that. 

The stimulus legislation includes a formula that institutes a sliding scale so that, for example, a single taxpayer would get the full $600 if they make under $75,000 per year. But if they make more than that, they’d only receive a partial payment that gets progressively smaller the more money they make per year, according to their AGI, until the reach an upper threshold, after which they wouldn’t qualify for a stimulus check at all.

Because of this mathematical equation used to calculate your second stimulus check allowance, the upper threshold is lower than before, which means more people won’t be eligible to receive even a partial check as long as they make more than a certain amount of money. Again, our second stimulus check calculator can help illustrate this.

Stimulus money: $600 versus $1,200 maximum

	$600 stimulus check	$1,200 stimulus check
Individual taxpayer, no child dependents	$600 maximum	$1,200 maximum
Individual taxpayer, 1 child dependent	$1,200 maximum	$1,700 maximum
Individual taxpayer, 2 child dependents	$1,800 maximum	$2,200 maximum
Married couple, no child dependents	$1,200 maximum	$2,400 maximum
Married couple, 1 child dependent	$1,800 maximum	$2,900 maximum
Married couple, 2 child dependents	$2,400 maximum	$3,400 maximum

You began a new job or earned a higher salary overall

Your adjusted gross income, or AGI, is a term normally used on the IRS’ yearly tax return to describe your total income, including assets (like stock sales, credits and deductions or an inheritance, for example) that fall outside your usual paycheck. You didn’t get the first stimulus check if your AGI went above a certain income limit, and that’s an even lower number with a second stimulus check of $600.

In general, there’s a direct correlation between your tax status and any possible stimulus check, and any change in your AGI could increase or reduce the size of your check.

You may have fewer dependents now than before

Age has so far been an important factor in how much stimulus money a household gets, but maybe not the way you think. Older adults are in many cases entitled to a stimulus check. In the first round of direct payments, households were given an extra $500 for each “child dependent.” This is defined as a legal minor who is 16 years old or younger. 

Interestingly, the IRS’ definition of a child dependent for your taxes (23 or under, and financially reliant on the tax filer) isn’t the same one used for stimulus checks. 

After some back and forth, the rules for the $900 billion stimulus bill keeps the same definition, after flirting with expanding the definition to include dependents of any age. However, if this bill becomes law, any “older” child dependents you claimed for the first check that have aged out of eligibility, would mean you would not receive your allotted $600 for every dependent 17 years old and above. 

Does this child support situation apply to you?

For the most part, you can use any stimulus check you receive as you like. However, one exception spelled out in the CARES Act from March had to do with child support. If you owe child support to your kid’s other parent, you may have some or all of your stimulus check garnished. If you received an extra $500 based on the way you and the other parent filed a dependency claim (it’s complicated), and then changed how you filed in your 2019 tax reserve (for example, if the other parent gained full custody), you may not get the extra money this time — in this case, $600. Here’s more information about child support situations. The rules do not appear to have changed in the Dec. 2020 package.

You’re behind on payments to creditors or private banks

Normally, your stimulus money can’t be garnished to pay rent or federal tax. There are a few exceptions, however, including the child support situation above. Since these rules did not appear to change with the next stimulus bill, then there are two groups — private creditors and banks — who could legitimately seize all or part of your money.

You moved and the IRS doesn’t have your new address

If you moved as a result of the COVID-19 pandemic and haven’t filed a change of address form with the USPS or IRS (a good step to take), the agency may not know where to send a paper check or EIP card. If you received your first stimulus delivery through direct deposit, the IRS will likely go that route again. If you changed bank accounts, you may run into a holdup or need to contact the IRS to file a further claim.

A calculation error could result in a smaller check

It happened with the first check and could easily happen with the next. Clerical errors and complex rules might result in your household getting less money in a future second stimulus check than you might be entitled to — for you and your dependents. Or maybe you don’t normally need to file taxes and wind up missing a rare extra step you need to take. Perhaps you moved (see above). 

Whatever the reason, if some issue prevents you from receiving all or part of your stimulus money, you will be able to claim a Recovery Rebate Credit during tax season 2021.

Did someone in your household recently die?

Our condolences. If your household received a stimulus check that included a spouse or child dependent who died between your last tax filing and the receipt of the second stimulus check, the IRS is likely to send a smaller sum if your tax filing status, deductions, credits or AGI changed. In some cases, the IRS has asked for the payment to be returned. However, if your spouse died in 2020, the $900 billion stimulus bill will allow you to claim a check under the terms “head of household;” that is, is you could receive the full amount if you make under $112,500.

For more on stimulus, here are top facts you need to know about stimulus checks.