The economic landscape of 2020 and early 2021 was defined by unprecedented challenges, prompting the U.S. government to deploy a series of direct payments aimed at providing financial relief to millions of Americans. Among these, the third Economic Impact Payment, authorized by the American Rescue Plan Act of 2021, stood out for its significant sum and broadened scope of eligibility. Delivered starting in March 2021, this $1,400 per person payment, including dependents, represented a crucial lifeline for households grappling with the ongoing impact of the COVID-19 pandemic.
Understanding who was eligible for this third stimulus check requires navigating a specific set of criteria related to income, tax filing status, residency, and dependent status. Unlike its predecessors, the third payment featured more stringent income phase-outs but also expanded eligibility to include a wider range of dependents, making its rules both more restrictive in some ways and more inclusive in others.
The Bedrock of Eligibility: Adjusted Gross Income (AGI)
At the heart of eligibility for the third stimulus check was an individual’s Adjusted Gross Income (AGI) – the figure on your tax return that represents your gross income minus certain deductions. The thresholds for receiving the full $1,400 payment, or a reduced amount, were precise and varied based on your tax filing status.
For the third stimulus check, the Internal Revenue Service (IRS) primarily used information from either your 2019 or 2020 tax return. If your 2020 tax return had already been processed when the payment was sent, the IRS used that. Otherwise, they defaulted to your 2019 return. This "look-back" rule was crucial, as an individual’s income might have changed significantly between those two years due to pandemic-related job losses or gains.
The AGI thresholds were as follows:
Single Filers:
- Received the full $1,400 if their AGI was $75,000 or less.
- Payments began to phase out for AGIs above $75,000.
- Payments completely phased out (meaning no payment was received) for AGIs above $80,000. This was a much steeper phase-out than previous checks, creating a "cliff" effect where a relatively small increase in income could eliminate the payment entirely.
Married Couples Filing Jointly:
- Received the full $2,800 ($1,400 per person) if their AGI was $150,000 or less.
- Payments began to phase out for AGIs above $150,000.
- Payments completely phased out for AGIs above $160,000. Again, this was a very sharp cutoff.
Heads of Household:
- Received the full $1,400 if their AGI was $112,500 or less.
- Payments began to phase out for AGIs above $112,500.
- Payments completely phased out for AGIs above $120,000.
It’s important to emphasize the speed of these phase-outs. For instance, a single filer with an AGI of $75,000 received the full $1,400, but someone with an AGI of $80,001 received nothing. This stark difference was a defining characteristic of the third payment.
Dependent Eligibility: A Significant Expansion
One of the most significant changes for the third stimulus check was the expansion of dependent eligibility. Unlike the first two rounds, which generally limited additional payments to qualifying children under 17, the third payment allowed an additional $1,400 for all eligible dependents, regardless of age.
This meant that families could receive an extra $1,400 for:
- Children under 17: As in previous rounds.
- Adult dependents: This was a new inclusion. It covered college students aged 17 and older, elderly parents, and adult children with disabilities who were claimed as dependents on a tax return.
To qualify as a dependent for stimulus payment purposes, an individual generally had to meet the IRS criteria for a qualifying child or qualifying relative, including tests for relationship, age, residency, support, and joint return. This broadened scope meant that many families who missed out on payments for their older children or dependent relatives in previous rounds were now eligible for additional funds.
Residency and Social Security Number (SSN) Requirements
To be eligible for the third stimulus check, individuals generally needed to be:
- A U.S. citizen or U.S. resident alien: This was a fundamental requirement.
- Have a valid Social Security Number (SSN): The primary taxpayer, and their spouse if filing jointly, generally needed to have a valid SSN. There was, however, an exception for military families: if one spouse had an SSN and the other had an Individual Taxpayer Identification Number (ITIN), they could still qualify, provided at least one member of the couple was a member of the U.S. Armed Forces at any time during the tax year. This was a specific carve-out to ensure military families were not unfairly penalized.
Individuals who were non-resident aliens, dual-status aliens, or those who could be claimed as a dependent on someone else’s tax return (unless they were the primary taxpayer themselves) were generally not eligible.
Non-Filers and Federal Beneficiaries: Reaching the Unbanked
A key challenge with all stimulus payments was ensuring that funds reached individuals who do not typically file tax returns, such as low-income individuals, retirees, and those receiving federal benefits. The IRS and Treasury Department took steps to address this for the third stimulus:
- Federal Benefit Recipients: Individuals who received Social Security retirement, survivor, or disability benefits (SSDI), Supplemental Security Income (SSI), Railroad Retirement Board (RRB) benefits, or Veterans Affairs (VA) benefits generally did not need to take any action. The IRS used information from these agencies to automatically send payments to eligible recipients, often using the same method (direct deposit or debit card) that they received their regular benefits.
- Non-Filers Tool (Limited Use): While a dedicated "Non-Filers" tool was extensively used for the first stimulus check, its role diminished for the third. By the time the third payment was rolled out, most eligible non-filers had either already provided their information to the IRS (for the first or second check) or had their information sent to the IRS by federal agencies. However, individuals who had not received prior payments and did not receive federal benefits could still use the 2021 tax filing season to claim the payment via the Recovery Rebate Credit.
Special Circumstances and Exclusions
Beyond the core criteria, several special circumstances affected eligibility:
- Deceased Individuals: Generally, a payment could not be issued to someone who died before January 1, 2021. If someone died in 2021 before receiving their payment, the payment could still be issued to their estate or surviving spouse if they filed a joint return.
- Prisoners: In most cases, incarcerated individuals were not eligible for the third stimulus check.
- Children in Foster Care: Payments for children in foster care were generally sent to their foster parents or guardians who claimed them as dependents.
- Identity Theft Victims: Those affected by identity theft might have experienced delays or needed to take additional steps with the IRS to resolve their eligibility.
The Recovery Rebate Credit: A Second Chance
For individuals who were eligible but did not receive the full amount of the third stimulus check (or any amount at all), the Recovery Rebate Credit on their 2021 federal income tax return served as the mechanism to claim the missing funds. This was particularly important for:
- Individuals whose income dropped significantly in 2021 compared to 2019 or 2020, making them eligible for a higher payment based on their 2021 AGI.
- Families who welcomed a new baby or adopted a child in 2021.
- Individuals who gained a new dependent (e.g., an elderly parent moved in).
- Non-filers who did not receive an automatic payment and needed to provide their information to the IRS.
- Anyone whose initial payment was based on outdated information.
By filing a 2021 tax return and correctly calculating the Recovery Rebate Credit, eligible individuals could receive the funds they were due, either as a refund or a reduction in their tax liability.
Impact and Legacy
The third stimulus check, with its specific eligibility criteria, represented a targeted effort to inject funds directly into the economy and provide immediate financial relief during a critical phase of the pandemic. While its strict income phase-outs created sharp cutoffs for some, its expansion to include all dependents broadened its reach to many families previously excluded.
Understanding the nuances of its eligibility rules remains important for historical context and for individuals who may have needed to claim the Recovery Rebate Credit. The third stimulus check ultimately played a significant role in mitigating poverty, stimulating consumer spending, and providing a measure of stability during an uncertain economic period, leaving a lasting mark on the landscape of pandemic-era financial aid.