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

A Head of Household gets more generous tax rates and a higher threshold for receiving a stimulus check than a single filer or married, filing separately.

A Head of Household get more generous tax rates and a higher threshold for receiving a stimulus check than a single filer or married, filing separately.
Patrick SmithAFP

The Senate has taken up the American Rescue Plan Act, a sweeping $1.9 trillion covid-19 relief package, and could pass the bill in the coming days. One of the provisions in the bill that has garnered the most attention has been the third round of stimulus checks, or Economic Impact Payments (EIP).

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

What is a Head of Household?

A head of household is a tax filing status an individual may claim if that person pays more than half the cost of supporting and housing a qualifying person. In order to qualify the person must file a separate individual tax return, and be considered unmarried.

Heads of household get higher standard deductions and lower tax rates than taxpayers who file as single or married filing separately.

How does Head of Household status affect my stimulus check?

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

Comparatively, single filers would get the full payment if their AIG was $75,000 or less. Above that cap the amount phased out until an individual’s AIG reached $150,000 for heads of household, and $87,000 for single fliers, above which they weren’t eligible for any stimulus check money.

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

When will the stimulus checks arrive?

Republicans are doing their best to slow do the passage of the covid-19 relief bill despite overwhelming support from the American public. On Thursday the Senate began debate on the bill with Vice President Kamala Harris casting the tiebreaking vote in the evenly split Senate to start deliberations. Senator Ron Johnson forced the 628-page bill to be read aloud. It took the Senate clerks just over 11 hours to read the full text of the bill finishing around 2am.

Friday the Senate will begin 20 hours of debate leading to a vote-a-rama which will go into the night. The Republicans will attempt to exploit any divisions within the Democratic party through adding an array of amendments to the bill. The GOP wants to get Democratic Senators on the record on controversial issues in an effort to make changes to a bill that they unanimously oppose.

Once the bill passes through the Senate it will have to go back to the House. If lawmakers in the lower chamber approve of the changes that have already been made and any new ones that may occur, the legislation can go to President Biden’s desk. It is expected that President Biden will sign the bill immediately, given none of his key provisions are removed.

Democrats want to enact the bill before 14 March when unemployment benefits are set to expire. Stimulus payments could start going out within a week of the bill passing, however the IRS is in the middle of tax filing season. This may slow down when they can start sending out 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 mooted aid measures such as the expanded child tax credit, by following our dedicated live blog.


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