How this calculator works
In July 2020, as Congress debated a second round of stimulus payments, one idea was to target the money at lower incomes with a hard cut-off rather than a gradual phase-out. This calculator models that idea: it uses the HEROES Act amounts, $1,200 per adult and $1,200 for each of up to three dependents, and stops all payment above $40,000 of income for a single filer or $80,000 for a joint filer. The proposal was never introduced as a bill in this exact form, and nothing in it became law. The $40,000 figure came from public comments by Senate leaders about focusing relief on households earning about $40,000 or less. This calculator exists to show the shape of a hard cap: a household just below the line receives the full amount, and a household just above it receives nothing. That cliff is the main difference from a gradual phase-out, which reduces the payment smoothly and avoids a sudden loss of the whole benefit.
Formula
Counted dependents = min(dependents, 3). Base = adult amount + $1,200 x counted dependents, where the adult amount is $1,200 for single and head of household or $2,400 for joint filers. Payment = base if income is at or below the cap, otherwise zero. The cap is $40,000 single, $60,000 head of household and $80,000 joint.
Worked example
A single filer with one dependent and $35,000 of income receives the full base of $2,400. The same filer at $41,000 receives nothing, a loss of the whole $2,400 for $6,000 of extra income. A joint filer with two dependents and $75,000 of income receives $4,800, while $85,000 receives nothing.
Advertisement
Frequently asked questions
Was this proposal ever law?
No. No bill with this exact cap was enacted. It models an idea discussed publicly in July 2020, using the HEROES Act payment amounts. It is not a description of any payment that was made.
Why is the head of household cap $60,000?
The original comments named a $40,000 single cap and an $80,000 joint cap. Head of household was not specified, so this page uses the midpoint, $60,000, as a stated assumption rather than a figure from a bill.
What is a hard cap compared with a phase-out?
A hard cap creates a cliff: one dollar of extra income can remove the entire payment. A phase-out reduces the payment gradually as income rises. A gradual reduction avoids the trap of earning slightly more and being worse off overall.
Does this include dependents?
Yes. The base includes $1,200 for each of up to three dependents, following the HEROES Act structure that the proposal was based on.