What's different about the potential third stimulus payment?

The possibility of a third stimulus check is being discussed by officials. President-elect Joe Biden has gone on record to confirm he wants to bring Americans a $2,000 stimulus check. But, how does this prospective third stimulus check differ from the others?

What could be different about the third stimulus?

1. The base amount of the third stimulus checks may increase

The base amount (the amount paid before adding extra payments for dependents or applying phase-out rules) of the first round of stimulus checks under the CARES Act was $1,200. The second round was a base amount of $600 under the COVID-Related Tax Relief Act. Washington is talking about sending out checks with a base pay of $2,000, so there is a strong possibility that will be the case.

However, do not be surprised if the base amount for third round checks ends up totaling $1,400. This is because the push for $2,000 checks came from the notion that the $600 was not enough for the American people so lawmakers proposed increasing the amount by sending out an additional payment of $1,400. Together, these two amounts equal the proposed $2,000. Although the CASH Act was blocked in the Senate back in December, the idea of boosting the $600 payments could be renewed for the third check.

2. Families may receive more money in the third stimulus checks

The first round payments gave families an extra $500 per dependent ages 16 or younger. This amount was increased to $600 for the second round. There is a chance the additional amount will be more than the previous payments. A proposal from October offered to double the payout to $1,000 per dependent.

There is also a chance that qualifications for a dependent may change. With the first two checks, a dependent was defined as a child aged 16 or younger, but previous proposals expanded the definition to include anyone you can claim on your tax returns regardless of age.

3. Third stimulus checks may be based on 2020 taxes

The IRS is expected to begin accepting tax returns for the 2020 season in late January or early February. Third round checks will most likely not be sent out by then, so they will most likely be based on your 2020 tax return.

4. You may not need a social security number for third stimulus check

If you do not have a valid social security number, you didn’t qualify for a first round stimulus check. The rules were loosened for the second stimulus payment - you could qualify for a second stimulus check and the additional $600 per dependent payment if you have a Social Security number, but your spouse doesn't. Also, the COVID relief law also made this applicable to first-round payments.

For the third round, there’s a possibility that the Social Security requirement may be removed all together. Under the previously proposed HEROES Act, you would have only needed a Taxpayer Identification Number (TIN) to get a payment.

5. Child support may (or may not) be taken from third stimulus

For the first stimulus checks, the IRS could have taken money from your stimulus to give to the person owed if you were behind on child support payments. This was reversed for the second round of checks. For the third round, there’s conversation as to who will be protected - those who owe child support or those who need it.

Where will the money for the third stimulus check come from?

While the government has the power to produce and print money, the process of funding American’s stimulus checks may be different than you assume. Check out this video for a full breakdown of each institution’s role in creating new money.

What are your thoughts about the proposed third stimulus payment? Comment below.