Couples who earned $160,000 or more a year will not receive any stimulus money.

Many people might think their income doesn’t make them eligible for a stimulus payment, but that might not be true with this IRS change.

The IRS published a guide this week that could make more people eligible for a third stimulus check.

The recent $1.9 billion stimulus package includes a tax-exempt provision – up to $10,200 of unemployment income per person – for couples who have had incomes of up to $150,000 per year.

The IRS clarified this week that income calculations to determine eligibility for tax exemption should exclude unemployment compensation (Unemployment compensation is the money the government gives to unemployed workers until they can find employment, according to Investopedia)

The change announced by the IRS will make more people qualify for this tax cut of up to $10,200 for unemployment benefits, and also to receive a third stimulus check, as reported on Metro.

Remember: for the third stimulus check, married couples with a joint annual income of $150,000 or less will receive $2,800. But if a couple had incomes of more than $160,000 a year, they will receive nothing.

So, by way of example, suppose a couple had income of $140,000 a year between their two salaries, and they also received unemployment compensation of $10,200 in benefits for each spouse, or $20,400 for both.

Adding up their wages and unemployment compensation, they then had $160,400 in income in a year, which would seem to indicate that they are not eligible for tax exemption of up to $10,200 or the third stimulus check (because they are over $160,000).

However, if unemployment compensation is not added – as the IRS has just pointed out – then their income is only $140,000, which does make them eligible for tax exemption and check.

Were it not for exclusion, these taxpayers would have exceeded the income threshold and would definitely not have been eligible for any stimulus payment.

Original note: Drafting March 

 

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