COVID-19 and Direct Payments: How Do the “Stimulus Check” Phaseouts Differ Between the House-Passed and Senate-Passed American Rescue Plan?

COVID-19 and Direct Payments: How Do the “Stimulus Check” Phaseouts Differ Between the House-Passed and Senate-Passed American Rescue Plan?

INSIGHTi
COVID-19 and Direct Payments: How Do the
“Stimulus Check” Phaseouts Differ Between
the House-Passed and Senate-Passed
American Rescue Plan?
Updated March 8, 2021
This Insight briefly summarizes how the proposed third round of payments—often referred to as
“stimulus checks”—would phase out in the American Rescue Plan Act of 2021 (ARPA; H.R. 1319) as
passed by the House on February 27, 2021 (hereinafter “House-passed version”) and as passed by the
Senate on March 6, 2021 (hereinafter “Senate-passed version”).
A more detailed description of the third round of payments in H.R. 1319, as passed by the House on
February 27, 2021, can be found here.
Overview of Maximum Payment Amount
In both the House-passed version of H.R. 1319 and the Senate amendment, households would general y
be issued a single payment based on their income and size. Specifical y, a household’s maximum payment
would equal $1,400 per eligible individual ($2,800 for most married couples) plus an additional $1,400
for each dependent as defined for tax purposes. The definition of dependent would include older children
and adult dependents. In most cases, for the purposes of these payments, a household would be al the
individuals listed on an income tax return.
The payments would be automatical y issued to eligible households, general y based on information from
2020 or 2019 income tax returns (i.e., income, number of eligible individuals and dependents, and
taxpayer identification numbers). If a payment issued in 2021 based on 2019 tax data would have been
larger based on 2020 tax data, the IRS would be directed to issue a supplementary top-up payment within
90 days of the 2020 tax filing deadline or September 1, 2021, whichever is earlier.
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How would the payments phase out in the House-passed vs. Senate
version of the American Rescue Plan Act?
In the House-passed version of H.R. 1319, the maximum payment amount would phase out over a range
of income:
 $75,000 to $100,000 if single;
 $112,500 to $150,000 if single with dependents (i.e., head of household);
 $150,000 to $200,000 for most married couples (i.e., married filing jointly).
The payments would be phased down proportional y (or “ratably”) in relation to income in the phaseout
range. For example, if a married couple with two children had $175,000 of income, which is the midpoint
of the phaseout range (50%), the payment would be reduced by 50%, and thus equal $2,800. If the same
family instead had income of $187,500 (75% of the phaseout range), the payment would be reduced by
75%, and thus equal $1,400. The larger the payment, al else being equal, the faster the payment would
phase down by income.
In the Senate amendment, the maximum payment amount would phase out over a narrower range of
income:
 $75,000 to $80,000 if single;
 $112,500 to $120,000 if single with dependents (i.e., head of household);
 $150,000 to $160,000 for most married couples (i.e., married filing jointly).
The Senate amendment would also use a “ratable phaseout,” but payments would be phased out more
rapidly than under the House-passed version of the American Rescue Plan Act. Given the narrower
phaseout range, certain households eligible for the payments under the House-passed version of H.R.
1319 would receive no payment under the Senate amendment. Other households with income in the
phaseout range would receive a smal er payment. This is il ustrated below for a single individual with no
dependents, a single individual with one dependent, and a married couple with two dependents. (Income
for the purposes of phasing out these payments is adjusted gross income or AGI.)

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Under the Senate amendment, single individuals with $75,000 of income or less would receive the same
amount as under the House bil . (For example, in the figure above a single individual with no dependents
and income under $75,000 would receive $1,400.) Single individuals with income above $75,000 and less
than $80,000 would stil receive a payment, but it would be less than the payment under the House bil
(i.e., the orange line is below the black line). Single individuals with income between $80,000 and
$100,000 would receive no benefit under the Senate amendment, and a reduced benefit under the House
bil .

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Under the Senate amendment, single individuals with dependent(s) (i.e., head of household filers) with
$112,500 of income or less would receive the same amount as under the House bil . (For example, in the
figure above a single individual with one dependent and income under $112,500 would receive $2,800.)
Households with income above $112,500 and less than $120,000 would stil receive a payment under the
Senate amendment, but it would be less than the payment under the House bil (i.e., the orange line is
below the black line). Single individuals with dependent(s) with income between $120,000 and $150,000
would receive no benefit under the Senate amendment, and a reduced benefit under the House bil .

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Under the Senate amendment, married couples (i.e., joint filers) with $150,000 of income or less would
receive the same amount as under the House bil . (For example, in the figure above a married couple with
two dependents and income under $150,000 would receive $5,600.) Married couples with income above
$150,000 and less than $160,000 would stil receive a payment under the Senate amendment, but it would
be less than the payment under the House bil (i.e., the orange line is below the black line). Married
couples with income between $160,000 and $200,000 would receive no benefit under the Senate
amendment, and a reduced benefit under the House bil .
Households Affected
CRS estimates that under the House-passed version of H.R. 1319, approximately 152.9 mil ion
households (out of a total of 166.1 mil ion households in the United States) would be eligible to receive a
total of $394 bil ion in direct payments. CRS estimates that under the Senate amendment, approximately
145.5 mil ion households (out of a total of 166.1 mil ion households) would be eligible to receive a total
of $380 bil ion in direct payments, an estimated 7.5 mil ion fewer households and a reduction of about
$14 bil ion in the total aggregate dollars of payments compared to the House-passed version of H.R.
1319. Details of these estimates (including methodology) and a state-by-state breakdown can be found
here.

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Author Information

Margot L. Crandall-Hollick

Acting Section Research Manager

Disclaimer
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information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
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IN11624 · VERSION 4 · UPDATED