Approximately 12 million adults may not receive these $ 1,400 worth of stimulus checks. Here’s why

Signs calling for more relief, a second paycheck protection program, and more as part of a Goldman Sachs campaign to help small businesses near the U.S. Capitol on January 5, 2021.


Once Washington lawmakers finalize a new coronavirus relief bill, new $ 1,400 worth of stimulus checks will be released.

However, fewer people might see the money based on reports that President Joe Biden has agreed to lower the level of income to which these payments are limited.

As in the previous two rounds of stimulus testing, the full direct payments would go to individuals with adjusted gross income of up to $ 75,000, head of households up to $ 112,500, and married couples filing up to $ 150,000 together.

The new checks were to be capped at $ 100,000 in income for individuals, $ 150,000 for heads of household, and $ 200,000 for married couples, based on the bill passed by the House of Representatives on Saturday.

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That could change now, based on new Senate terms that Biden has approved.

Instead, it would cap payments for those earning $ 80,000, heads of household at $ 120,000, and married couples at $ 160,000.

As a result, fewer Americans with incomes above full payment thresholds will receive checks. Those who do receive smaller amounts based on the faster exit rate.

According to a quick estimate by the Urban-Brookings Tax Policy Center, the change will affect around 8 million people who would otherwise have received checks and no longer see payment.

Other estimates by the Institute for Taxes and Economic Policy have shown that up to 11.8 million adults and 4.6 million children could be left without stimulus checks due to the change.

Approximately 160 million people would have received the payments under the bill’s previous terms, which is a 5% change, said Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center.

“I would call it a modest change,” said Gleckman. “It will affect a few people, but it won’t affect a large number of people.”

Steve Wamhoff, federal tax policy director, said the numbers are “pretty close” to estimates by the Urban-Brookings Tax Policy Center.

“It doesn’t make a difference to most people,” said Wamhoff. “For the people who really need help, there is practically no change in the bottom 60%.”

Still, it’s a very fast exit rate that’s faster than what’s usually included on a tax bill, he said.

Those who receive no or a reduced payment as a result of the changes will feel it financially, Gleckman said.

“It means less money in the hands of Americans,” said Aaron Klein, senior fellow in economics at the Brookings Institution.

“Ultimately, I think it’s a mistake,” said Klein.

If cutting the $ 1.9 trillion bill is the goal, then there are other areas like state and local aid that could be cut, he said. These areas can raise money in other ways, while Americans suffering from the Covid-19 pandemic may not.

“Ultimately, a very steep and tight exit rate like this means that less money goes to people, many of whom are in a precarious financial position,” Klein said.

An income of $ 80,000 a year can sound like a lot of money in some parts of the country while it can be a lot less in other parts. That could explain why lawmakers are split on exit options, Klein said.

It means less money in the hands of Americans.

Aaron Klein

Senior Fellow, Brookings Institution

Biden’s move comes after a handful of Democratic senators sent him a letter this week calling for recurring stimulus controls and further improvements in unemployment insurance.

In that letter, they indicated that the stimulus tests can help make up for lost income when unemployment benefits are inadequate.

“Direct payments are critical to helping families in difficulty that unemployment insurance does not cover,” the senators wrote.

Some Democrats may complain about the new caps on the stimulus checks, Gleckman said. However, they were able to meet the full payments thresholds, which is probably more important to them.

“It was inevitable that something would be tinkered with on such a large bill,” said Gleckman.

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