Stimulus check 2 eligibility: Is the $40,000 income limit real? Here’s what we know so far

Just because you got a stimulus check the first time doesn’t mean you’ll qualify for a second payment, if there is one.

Sarah Tew/CNET

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There is now a clearer answer as to whether Washington lawmakers might approve a second stimulus payment for this year. It’s an urgent concern for the 32 million American workers who continue to receive federal and state unemployment benefits and still don’t know if Congress will extend enhanced jobless benefits after the expiration date at the end of July.

In as close to a commitment as Mitch McConnell has made since talk of a second stimulus check began back in May, the Senate Majority Leader confirmed Tuesday that another direct payment is under consideration.

“Only a heartless person would deny that the tens of millions out of work, the millions of small businesses shut down, and the hospitals, schools and nursing homes facing enormous challenges need help,” Joshua Gotbaum, a guest scholar in economic studies at the public policy organization Brookings Institution, told CNET this week. “They clearly do — and in many cases only the nation’s federal government is in a position to provide help.”

But who is eligible for help and who isn’t is still unknown. Even if you got the first stimulus check for $1,200, there is no guarantee that you’ll qualify for the second payment. Here’s everything we’ve heard so far about who may or may not meet the qualifications. Note that this story updates often as the situation develops.

Is the $40,000 cutoff real and where did it come from?

The $40,000 figure that’s been repeated in news stories stems from McConnell, who said on July 6, “I think the people who have been hit the hardest are people who make about $40,000 a year or less. Many of them work in the hospitality industry. So that could well be a part of it.” That was in response to a reporter’s question about the second stimulus check.

White House economic advisor Larry Kudlow has said the second stimulus payment will focus on people who are jobless or have lower incomes, Fox Business reported last week, but it isn’t clear how that would be calculated.


Not everyone will qualify for a payment under the current proposal.

Sarah Tew/CNET

Nancy Pelosi, the House Speaker and a California Democrat, questioned the salary cap. “I don’t know where the $40,000 came from,” she said during a July 9 press conference. “I think families making over $40,000 probably need assistance, depending on their situation.”

It’s been speculated that the $40,000 figure McConnell cited came from an open letter published June 16 from over 150 economists, led by Ben Bernanke, the former chair of the Federal Reserve, which stated that “among people who were working in February, almost 40% (PDF) of those in households making less than $40,000 a year had lost a job in March.”

That figure doesn’t scale across all US markets. In San Francisco, for example, the US office of Housing and Urban Development defined “very low income limits” at $60,900 for a single earner and $87,000 for a family of four, based on 50% of the metro area’s median income in 2020. That would be well above any $40,000 cutoff.

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Who could potentially qualify for a broad second stimulus payment?

The Heroes Act (PDF) passed by the House of Representatives in May proposes broad financial benefits summarized below. But it has been strenuously opposed by the Senate and President Donald Trump, who called it DOA. Still, it can help frame the conversation about the upper limits of who might be able to receive a second stimulus check.

  • Individuals who made less than $99,000 according to the adjusted gross income from their 2018 or 2019 taxes (whichever was most recently filed).
  • College students, dependents over 17, disabled relatives and a taxpayer’s parent.
  • Families of up to five people.
  • SSDI recipients
  • People who aren’t US citizens and file tax returns, pay taxes and otherwise comply with federal tax law using an individual taxpayer identification number (ITIN) instead of a Social Security number.

These people might not qualify for a second payment

McConnell has said that if the Senate, which his Republican party controls, passes another relief bill that includes more stimulus checks, the focus will be narrow. Based on speculation, there are some different ways exclusion from a potential second stimulus check could play out.

Nobody qualifies: A stimulus package could be signed into law that gives tax credits and other incentives to businesses. It’s possible some people could get a travel or dining credit, but not a check.

People who make “too much” money: If another round of stimulus payments does pass, but allocations are smaller for IRS payments, it’s probable there could be a lower maximum yearly income (AGI on the tax form) to qualify. In other words, people who make more than a certain amount (that’s lower than the current cutoff of $99,000 for individuals) could potentially be left out of a second round. One example is the $40,000 cap mentioned above.

Carryover exclusions from the current CARES Act: Young people between 18 and 24, people who aren’t US citizens but pay taxes, people who are incarcerated.

President Donald Trump

President Donald Trump has expressed interest in a second round of checks in 2020.

James Martin/CNET

Who isn’t eligible for the first stimulus check

Let’s review who was excluded in the first round:

  • Single taxpayers with an adjusted gross income above $99,000
  • Heads of households with an AGI over $136,500
  • Married couples with an AGI over $198,000
  • Children over 16 and college students under age 24
  • Nonresident aliens, as defined by the US government

When will we know more about stimulus check qualifications?

We won’t know anything for sure until a stimulus bill comes into clearer focus, but we have a good idea when that might happen and when a check could be sent

The conversation is expected to start in earnest on Monday, July 20, when the Senate is back in session.

“As soon as the Senate gets back [from its current recess], we are going to sit down on a bipartisan basis with the Republicans and the Democrats,” Treasury Secretary Steven Mnuchin told CNBC on July 9. He added that it will be a priority for the next legislation to be passed between July 20 and the end of the month.

For more, here’s what we know about the major proposals for a second stimulus package. We also have information on unemployment insurance, what you can do if you’ve lost your job and what to know about evictions.

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