Congress approved the third stimulus payment in March, and is almost done with sending out stimulus checks. Now, the IRS has come up with data on who all got the coronavirus stimulus checks, and there were a few surprises. One such surprise was that many people with higher than the threshold income got the coronavirus stimulus checks.
The IRS data showed that many checks went to those with adjusted gross incomes above $200,000. As per the IRS, about 127,000 stimulus payments went to those with AGI of over $200,000, amounting to about $392.3 million. Under the third economic impact payments, the IRS is estimated to have sent about 163.5 million stimulus payments, amounting to $389.9 billion.
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The fact that many with AGI of more than $200,000 got stimulus payments comes as a big surprise because of the eligibility requirements for the stimulus checks under the American Rescue Plan Act.
In the third round of stimulus checks, the full payment of $1,400 went to individuals with an adjusted gross income of up to $75,000 ($150,000 for married couples filing jointly and $112,500 for heads of household).
Moreover, the stimulus checks phased out for individuals with AGI of $80,000 or more, heads of households with AGI of $120,000 or more, and married couples (filing jointly) with AGI of $160,000 or more.
Even though it is a surprise that people who didn’t qualify on the basis of their AGI got stimulus checks, it isn’t likely a mistake by the IRS. One possible reason why such people got the stimulus check is because the payment was sent on the basis of their most recent tax returns.
So, those with income less than the threshold in 2019 would qualify for stimulus checks. However, if their income increased the next year, making them ineligible for the checks, they will not be required to return the money they got from the stimulus check.
Moreover, it is also possible that a family with income over the threshold but with enough qualifying dependents, got some amount in stimulus check.
Similar surprises were noticed at the time of the first stimulus checks as well, which were approved in March last year. A report from the Bureau of Labor Statistics found that many couples with dependents qualified for stimulus money even at higher income thresholds than those with no dependents.
Separately, the state level data from the IRS showed that households in Utah received the largest stimulus checks under the third round. As per the data, households in Utah got $2,784 on average.
The primary reason for this is that the check amount is based on the number of eligible people in each household and the income. In Utah, a typical household has 3.1 residents, in comparison to about 2.5 people per household nationally.
Under the American Rescue Plan, the adults and dependents got the same amount of $1,400 each. This means that bigger families are likely to qualify for bigger checks compared to households with fewer children.