Do you know how the IRS tabulates your second stimulus check money? It's complicated.
Angela Lang/CNETWhat makes some people eligible to receive a second stimulus check, while others won't qualify for the up-to-$600 per person payment that the IRS is currently sending out now? The answer includes a long list of second stimulus check requirements on one hand, and other the other, how much money you made between 2018 and 2019 tax season. More specifically, your second stimulus check total depends on your AGI and how many dependents you can claim.
That's the "simple" answer, at least, but it isn't the complete picture. Another layer beneath that is a formula that's actually written into the language of December's COVID-19 stimulus bill. This equation calculates how big a stimulus check the US Treasury will cut you.
What's interesting -- and ultimately really important -- is that the second stimulus check uses the same equation as the first one. And because of that, some people who got the first stimulus payment won't be eligible for this one (or they'll qualify for a smaller portion of the stimulus money) even if every other qualification remains the same.
How does the IRS calculate your stimulus payment?
For most people, the answer is "your federal tax return." Assuming you meet all the other qualifications, the IRS enters the adjusted gross income you put on your 2019 federal tax returns into a formula, plus the number of eligible child dependents you claim. If the result is under a maximum limit, you will receive at least some stimulus check money. If the number is above it, you won't receive any. (If you don't typically file taxes, here's what you need to know.)
There's a sliding scale involved. As with the first check, if your AGI is less than $75,000 as a single taxpayer (that means no kids), you'll receive the entire second stimulus check total of $600. If you made more than that, the size of your check would diminish until it hits the income limit, after which point you'd be ineligible.
This is the same equation that the IRS used for the first stimulus check, for a $1,200 per person maximum. But the fact that this check is $600 actually lowers the maximum income limit you could hit, which means that more people will hit the limit sooner. A $600 flat payment for children 16 and younger could help mitigate that (more below, it gets a bit more complex).
This chart will help illustrate the income limits and the difference between the first and second stimulus checks.
Stimulus check income limits ($600 and $1,200 checks)
| AGI to receive full amount (Both stimulus checks) | Second stimulus check upper income limit (AGI) | First stimulus check upper income limit (AGI) | Difference between upper limits | Percentage difference between upper limits | |
| Single tax filer | Under $75,000 | $87,000 | $99,000 | $12,000 | 14% |
| Head of household | Under $112,500 | $124,500 | $146,000 | $21,500 | 17% |
| Married, filing jointly | Under $150,00 | $174,000 | $198,000 | $24,000 | 14% |
What happens when you factor in children's $600?
This is where the calculations get really interesting. The numbers in the chart above don't include the $600 flat rate for child dependents in the second stimulus check (this is up from $500 with the first stimulus check). There's no cap on the number of child dependents that count toward your total check, as long as they're younger than 17 years old.
The IRS' equation begins with the largest amount you'd be eligible to receive ($600 per single taxpayer or $1,200 for joint filers), adds $600 for each qualifying child. Then it reduces the total possible sum according to your AGI.
It's a little like starting a test with a perfect 100 point score and subtracting every point you "miss," rather than starting with zero points and adding them all up at the end of the test.
But in this case, the dependents you name can start you at a higher value, say 110 points in our classroom example. So by the time you subtract "points," you may still have more than people who don't have dependents, even if your AGI is above the maximum cap. The more child dependents you have, the higher your starting value.
That's why it's possible you could be out of range for a payment based on your AGI and still receive a check for eligible dependents. Still confused? We don't blame you. You can experiment with ranges in our second stimulus check calculator and see below for more sums.
Washington continues to work on the details or a new stimulus package.
Angela Lang/CNETSecond stimulus check formula at work
Here, we want to show you the calculation at work, and how the math changes for people who claim dependents.
Remember that an individual can qualify for a stimulus check of up to $600, a married couple who file taxes jointly can get up to $1,200 -- and the second stimulus check adds an extra $600 per qualified child dependent. Note that a head of household is someone who files taxes individually and has at least one dependent. People who are considered single filers claim no dependents on their taxes, only themselves, which is why this group isn't explicitly included in the chart below.
These figures are based on the rules set out for the second stimulus check, worked out using CNET's stimulus check calculator. They're best considered estimates only, since secondary qualifications that could determine your final sum. If the amount below looks higher than what you receive, though, you may need to investigate a catch-up payment from the IRS.
Stimulus check calculations with dependents ($600 second check)
| Head of household | Married couple, filing jointly | |
| Estimated total with: | ||
| AGI of $40,000 and no dependents | $600 for single taxpayer with no children | $1,200 |
| AGI of $115,000 and no dependents | Single filers not eligible | |
| AGI of $190,000 and no dependents | Single filers not eligible | Not eligible |
| AGI of $40,000 and 1 dependent | $1,200 | $1,800 |
| AGI of $115,000 and 1 dependent | $1,070 | $1,800 |
| AGI of $190,000 and 1 dependent | Not eligible | Not eligible |
| AGI of $40,000 and 2 dependents | $1,800 | $2,400 |
| AGI of $115,000 and 2 dependents | $1,675 | $2,400 |
| AGI of $190,000 and 2 dependents | Not eligible | $400 |
What does this all mean for a third stimulus check?
There's already talk of another stimulus bill in 2021 that could yield a third stimulus check. Some are calling for it to be as large as $2,000 per eligible adult. If that were to happen, the pattern of the first two checks indicates that for the sake of simplicity, a future bill could once again direct the IRS to use the same formula.
If a future check were larger than the $1,200 from the first stimulus payment, you could expect the income cap to rise, making more people eligible for a higher sum of money overall.
It's possible we could also see another bid to expand the definition of a dependent, such as the Democrat-backed Heroes Act does. (This isnt law.) A move in this direction would also make families eligible to receive money on behalf of college students and older live-in relatives.
Both hypothetical changes would potentially increase the family's overall pool. Remember, the bigger the sum a family starts with, the bigger the check they are likely to receive after the IRS makes its deductions based on your AGI.
For more information, here are the top things to know about a second stimulus check. And see how SSDI recipients and checks, older adults and retirees and people who aren't US citizens or Americans who don't live in the US can also qualify.
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