EIP LINE 30 Update!

[NCperson]

@VolvoGirl @Critter-3 @xmasbaby0 @Hal_Al @Mike9241 @DoninGA @macuser_22 @Opus 17 

The IRS is making progress!  They posted a new draft 1040 instruction booklet and the EIP reconciliation form is updated to reflect the 2nd stimulus payment. 

https://www.irs.gov/pub/irs-dft/i1040gi--dft.pdf

look at instruction page  59 / pdf page 60

of note, the two stimulus payments are ADDITIVE against the income thresholds!!! they don't each stand on their own! which is to the taxpayer benefit. 

for simplicity, let's say I am single and make $85,000 and let's further assume I didn't receive either stimulus.  I am due $1200 and $600.  One might think that since my income is $85,000, I'd get a reduction of $5%*10,000 or $500 off EACH stimulus.  But I don't. on the EIP form, I'd receive $1300.  Lines 8 and 9 calculate my dollar eligibility and then it's reduced ONE TIME on line 12 by the income limit. 

Note they refer the stimulus payments as EIP1 and EIP2

enjoy the new year! 

[NCperson]

I guess I went through the worksheet too quickly yesterday... Each payment is subject to the income limitation....it's not additive as I stated originally. 

Line 14 calculated the 5% of income that exceeds your filing status (e.g. $150,000 for joint)

then that figure is used on Line 15 to test EIP1 (from Line 7)  and it is used on Line 18 to test EIP2 (from Line  10). Both Line 15 and Line 18 require subtracting Line 14. 

example:  I am filing joint with two qualified children and my income in 2020 is $200,000. I did not receive either stimulus payment. 

5% of my income over $150,000 is $2500.

before the income limitation, I am eligible for $3400 form EIP1 and $2400 from EIP2

if I work through the worksheet, I  get $1100 from EIP1 ($3400 less $2500), but I do not get anything from EIP2 because $2500 exceeds $2400.  

best

[Opus 17]

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@NCperson wrote:

I guess I went through the worksheet too quickly yesterday... Each payment is subject to the income limitation....it's not additive as I stated originally. 

Yes, I was about to clarify this.  At my income level I would be entitled to more if the $1800 was considered as a single payment. Since it is considered as two payments and the income limit is applied separately twice, the payments are reduced. In your first post, a single person with $85,000 of income would be entitled to $700 + $100, and not $1300.