President agrees to faster phaseout of $1,400 stimulus checks

President Joseph Biden has agreed to a compromise with moderate Senate Democrats to narrow the income eligibility for the next round of $1,400 stimulus checks by creating a faster phaseout based on adjusted gross income (AGI).

The American Rescue Plan Act of 2021 (Act), as passed on February 27 by the House of Representatives, contains a provision to provide a $1,400 stimulus payment. The amount of the payment phases out ratably for single filers with AGI over $75,000 ($112,750 for heads of households; $150,000 for joint filers). The payment phases out fully for single taxpayers with $100,000 of AGI ($150,000 for heads of household; $200,000 for joint filers). AGI, for this purpose is 2020 AGI, or 2019 AGI for taxpayers who have not already filed their 2020 return. (Act Sec. 9601)

President Biden has agreed to reduce the abovementioned $100,000, $150,000 and $200,000 full phaseout amounts to $80,000, $120,000, and $160,000, respectively.

Under the new agreement, the same households who would have received the full payment of $1,400 per person under the House bill will continue to receive the full payment. For example, individuals earning less than $75,000 and couples earning less than $150,000 will receive the full payment—just as in the House bill.