AGI=W2 Income + Retirement disbursement vs Stimulus

[Kathymw1]

Can someone tell me why it makes sense to add into your AGI total any retirement disbursements that prevents a person from getting a stimulus payment?  Example:  I've made less than $75,00 but took out a disbursement that put me just over $80,000, therefore I am not getting a stimulus payment this time around.  The disbursement was my money, not 2020 earned income.  Just doesn't seem logical that the AGI bases for stimulus includes money that a person takes out of their retirement!

[SundayInSalem]

When talking about getting your own money back, are you referring to pre-tax or after-tax money?

Pre-tax money was never taxed, so any retirement disbursement consisting of pre-tax contributing and earning will be 100% taxable and added to your AGI. If you received a 1099-R, Box 1 and Box 2a (taxable amount) would be the same.

If you contributed after-tax money, your after-tax contributions would not be taxable and not included in your AGI. Generally if you received a 1099-R, Box 2a (taxable amount) would be less than Box 1.

Adjusted Gross Income (AGI) is defined as gross income minus adjustments to income. Gross income includes your wages, dividends, capital gains, business income, retirement distributions as well as other income. Adjustments to Income include such items as Educator expenses, Student loan interest, Alimony payments or contributions to a retirement account. Your AGI will never be more than your Gross Total Income on you return and in some cases may be lower.

Adjusted Gross Income