2nd Stimulus Amount

[Snaggletooth]

There are reems and reems of discussion about the 2nd stimulus amount, but nowhere to be found is the amount taxpayers were supposed to receive. The IRS will tell you whether a check was mailed but won't give you the amount.

For mainstream taxpayers (not exotic or strange circumstances) would the amount be $600 per adult and $500 for every child under 17?

[Uncle Sam]

No - 2nd round is $ 600 per person claimed on the prior year tax return.
So a family MFJ with AGI under $ 150,000 and 3 dependent children under age 17 would or should have received $ 3,000

[Burke]

For same scenario above, where one child was born in 2020, a client received $2,400 on the second stimulus. (Two adults, two children on 2019 return.) So when they file 2020, they will get $500 for first stimulus not received, and $600 for 2nd stimulus not received, correct? For a total of $1,100 additional money.

[kathyc2]

Burke- correct 1,100.

[BPT]

My client received $1,200 (payment #1) on 4/15/20. The payment #2 status says Not Available. Essentially he is not able to get the recovery rebate credit on his 2020 return. He should get the second payment in 2021. Essentially the recovery rebate credit is to be used for taxpayers that didn't get their stimulus payment in 2020?

[Lion]

If your client did not get his EIP2, he might qualify for RRC2 on his 2020 tax return. (EIP2 was just an advance of RRC2.)

[BOB W]

Over and over again client swears the didn't get the second stimulus payment but when forced to review their bank statement, there it was. Unless something happened to their bank account, it has always been both payments received.

Now, how much?, can be a good question. Looking at their 2019 return will be a clue. Does anyone have a "simple" formula (%) to be applied to the 2019 to figure out what stimulus payment should of been for over 75,000/150,000 return?

[TAXNJ]

Over and over again client swears the didn't get the second stimulus payment but when forced to review their bank statement, there it was. Unless something happened to their bank account, it has always been both payments received.

Now, how much?, can be a good question. Looking at their 2019 return will be a clue. Does anyone have a "simple" formula (%) to be applied to the 2019 to figure out what stimulus payment should of been for over 75,000/150,000 return?

See if 2-25-21 post applies:

https://forum.thetaxbook.com/forum/discussion-forums/main-forum-tax-discussion/304679-stimulus-payments

[BOB W]

Simpler please. IRS does it simpler. (AGI -$150,000 = excess) divided by ? or multiplied by ? or a combination of both? come on... some one with good math?

[Rapid Robert]

This was succinctly explained in this post: https://forum.thetaxbook.com/forum/d...825#post301825

You can make a spreadsheet based on the following, combine as many steps into one as you are comfortable doing in a spreadsheet.

(Let's use the $150K threshold figure for MFJ, simply replace with $75K if appropriate), "AGI" below is the taxpayer's actual AGI.

Step 1. Figure your unreduced EIP amount, call it FullEIP (depends only on number of qualified individuals reported on the return)

Step 2. Multiply FullEIP times 20 (because 1 ÷ 0.05 = 20)

Step 3: Figure upper limit of phase-out: $150K + (20 × FullEIP), call it UpperLim

Step 4: Figure difference: (UpperLim - AGI) , call it NotPhasedOutAmount

Step 5: If NotPhasedOutAMount is zero or negative, STOP. No EIP available, fully phased out.

Step 6: Figure NotPhasedOutPercent = ( NotPhasedOutAmount ÷ (20 × FullEIP) )

Step 7: Figure EIP = ( NotPhasedOutPercent × FullEIP )

For example, suppose unreduced EIP is $3,000 (just to use an arbitrary number) and taxpayer AGI is $190K

UpperLim = $150K + (20 × $3,000) = $210,000

NotPhasedOutPercent = ( ($210K - $190K) ÷ (20 × $3,000) ) = 33.3%

EIP = 33.3% of $3,000, or $1,000

[BOB W]

How's this: excess over starting stimulus threshold times 5% = reduction against full stimulus amount.

Total AGI: 175,000
minus 150,000
Equals 25,000
times 5% = 1,250 A

Full stimulus 2,400
minus A 1,250 = 1,150 net stimulus

The only flaw I see is when dependents are added.

[Rapid Robert]

BOB W: you are doing the same calculation as mine, just in a different order, and you don't bother to calculate the percent. If you add one step to your process: 1,150 ÷ 2,400 to get the percent, then you are doing the same calcs as what I showed, just in a different order.

Does anyone have a "simple" formula (%) to be applied to the 2019 to figure out what stimulus payment should of been for over 75,000/150,000 return?

Some people like to know the percent reduction, so they can compare different scenarios. The reason I included percent is because that is specifically what you asked for. In your version, the percent is only known after the fact, in my version the percent is calculated first, then applied to the EIP.

[BOB W]

OK. each child is worth $10,000 added to starting AGI phaseout. ( 1@$500 dependent divided by 5% = $10,000)

$175,000
- 160,000
difference is $15,000

$15,000 times 5% = $750

Full Stimulus $2,900 minus $750 = $2,150.

Remember I like it simple... Because Simple is what Simple does.

[BOB W]

Rapid Robert, your example was great, Thanks. It allowed me to think through a simpler 2 or 3 step " kind of in my head" calculation.

[BPT]

Apologies, earlier in the thread I said my client received $1,200. He and his wife received a total of $2,400 in April 2020 for the first stimulus payment. He is saying he didn't receive anything for the second payment but that might be because he changed his bank info which he did. I confirmed on the "get my payment" that a second payment has not been made to him. Sounds like he should have received $1,200 for the second payment. Given that he has not received the second payment I should pickup $1,200 as a recover rebate credit. Thus entering $0 on line 13 on the rebate worksheet?