In December 2020, Congress approved a second round of Economic Impact Payments—often called “stimulus check #2”—to help households weather a winter surge in COVID-19 cases and renewed restrictions. Here’s everything you need to know about how much you could receive, who qualified, how payments phased out, and when funds arrived.
Legislative Background
The COVID-related Tax Relief Act of 2020, signed December 27, 2020, authorized up to $600 per eligible adult and $600 per qualifying child. It built on the $1,200-per-adult payments from the CARES Act in March 2020. Lawmakers aimed to deliver targeted relief quickly as unemployment and business disruptions resurged.
Who Qualified—and How Much They Got
Maximum payments depended on filing status and household composition:
- Single filers with adjusted gross income (AGI) up to $75,000 received $600.
- Heads of household with AGI up to $112,500 received $600.
- Married couples filing jointly with AGI up to $150,000 received $1,200 ($600 each).
- Dependents under age 17 qualified for an extra $600 per child.
A married couple with two children under 17 could therefore receive as much as $2,400 in total.
Income Phase-Out Details
Payments phased out at $5 lost for every $100 your 2019 AGI exceeded these lower thresholds:
- Singles: $75,000 to $87,000
- Heads of household: $112,500 to $124,000
- Married filing jointly: $150,000 to $174,000
For example, a single filer with $80,000 AGI was $5,000 over the $75,000 threshold and lost $250 (5 × $5 × (5,000⁄100)), netting $350.
Claiming Your Payment
- Automatic issuance: The IRS used 2019 tax returns to send direct deposits, paper checks or prepaid debit cards beginning in January 2021.
- Non-filers portal: Households without a recent return could register bank or address details via an online IRS tool launched late 2020.
- Recovery Rebate Credit: Anyone who did not receive the full amount by spring 2021 could claim the remainder on their 2020 tax return.
Timing and Delivery
- January 2021: First direct deposits hit bank accounts.
- February–March 2021: Paper checks and debit cards arrived.
- April 2021 filing season: Late-claim credits showed up on tax refunds.
Most eligible households saw their funds by mid-March; a minority needed to file to receive the full payment.
How Stimulus 2 Fit into Broader Relief
By early 2021, many families also had:
- First stimulus check: $1,200 per adult + $500 per child (CARES Act)
- Federal jobless boost: $300 weekly through March 2021
These layered benefits formed a critical winter safety net alongside state and local support programs.
Economic Impact and Critiques
- Household spending: Surveys show about two-thirds of recipients used funds for essentials like food, rent and utilities.
- GDP boost: Economists estimate the $600 payments added roughly 0.5 percentage points to first-quarter 2021 growth.
- Equity gaps: Some low-income non-filers struggled to access funds, while upper-middle-income earners up to the cap received full payments.
Lessons Learned
- Speed vs. accuracy: Relying on older tax returns sped delivery but sometimes mis-targeted payments.
- Outreach needs: Non-filers and vulnerable populations required extra support to claim benefits.
- Phase-out design: The linear $5-per-$100 formula balanced fiscal restraint and broad eligibility, though it left some middle-income earners under-paid.
Stimulus check #2 provided up to $600 per person and $600 per child, phasing out between $75,000 and $174,000 AGI. Issued January–March 2021, it served as a vital bridge for millions facing renewed pandemic challenges.
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