What is a Head of Household and how does it affect the size of stimulus controls? – Community News
Stimulus Check

What is a Head of Household and how does it affect the size of stimulus controls?

The Senate passed the American Rescue Plan Act, a sweeping $1.9 trillion COVID-19 aid package, and could approve the bill in the coming days. One of the provisions in the bill that has received the most attention is the third round of stimulus controls, or Economic Impact Payments (EIP).

The bill calls for immediate payments of $1,400 to eligible Americans, which has changed in recent days. President Joe Biden reached an agreement with moderate Democrats to limit the number of people eligible for the latest round of direct payments. Further amendments can be made before the bill leaves the Senate, and it would still have to go back to the House for a vote in the House to approve the changes.

What is a family head?

A family head is a tax return status that a person can claim if that person pays more than half of the cost of living and housing qualifying person. To qualify, the person must file a separate individual tax return and be considered unmarried.

Household heads get higher standard deductions and lower tax rates than taxpayers who file separate or married returns.

How does head of household status affect my stimulus check?

Just as householders get better tax rates and higher standard deductions, the income threshold to qualify for the stimulus checks is also higher. In the previous two rounds of direct payments, a head of household would receive the full amount of direct payments if their annual adjusted gross income (AIG) was $112,500 or less.

For comparison, single filers would receive full payment if their AIG was $75,000 or less. Above that limit the amount phased out until an individual’s AIG reached $150,000 for householders and $87,000 for single fliers, above which they were not eligible for stimulus check money.

With the change to the third round that Biden agreed to on Wednesday, the maximum payment limit remains $112,500 for heads of household but now there is a hard limit of $120,000. Thus, a household head earning $112,500 or less can expect a stimulus payment of $2,800 ($1,400 for the submitter and another $1,400 for the qualifier) plus $1,400 for each additional eligible person, such as children.

When will the stimulus checks come?

Republicans are doing their best to delay the adoption of the covid-19 relief law despite overwhelming support from the American public. On Thursday, the Senate began debating the bill, with Vice President Kamala Harris casting the casting vote in the evenly divided Senate to begin deliberations. Senator Ron Johnson forced the 628-page bill to be read aloud. It took Senate clerks just over 11 hours to read the full text of the bill, which ended around 2 a.m.

The Senate begins Friday with a 20-hour debate leading to a vote-a-rama who goes into the night. Republicans will try to exploit any divisions within the Democratic party through… adding a series of amendments to the bill. GOP wants to put Democratic senators on the map on controversial issues in an effort to make changes to a bill they are unanimously opposed to.

Once the bill is through the Senate, it must return to the House of Representatives. If legislators in the House of Representatives approve the changes that have already been made and any new ones that may arise, the legislation can go to President Biden’s office. President Biden is expected to sign the bill immediately as none of his key provisions will be dropped.

Democrats want adopt the bill before March 14 when unemployment benefits expire. Incentive payments can begin within a week of passing the bill, but the IRS is in the midst of tax filing season. This can delay when they can start sending the payments due to the enormous workload the agency is experiencing.

Third stimulus check: live updates

you can get the latest updates on the proposed third stimulus check, and other suggested support measures, such as the expanded child tax credit, by following our dedicated live blog.