Understanding Your 2021 Stimulus Payment: Why It May Have Been Less Than Expected

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Why did you get less money than the typical American?

According to the Institute on Taxation and Economic Policy, the typical American family will get an average of $3,450 in stimulus money in 2021. This amount is based on the stimulus payments distributed to the bottom 60% of earners in the United States.

If you haven't received that much money this year, you may be wondering why you got less than the average household did. While the specific answer depends on your unique situation, there are a few reasons why your payments may have fallen short of what most of your peers received. Here's what they are.

1. You had a higher income

Earning a high income is one of the most likely reasons why you may have received less than the average $3,450 in stimulus money. See, the money comes from $1,400 stimulus checks authorized by the American Rescue Plan Act, as well as from an expanded Child Tax Credit and an expanded Earned Income Tax Credit. But there are income limits on all of these programs, with benefits phasing out, eventually making high earners entirely ineligible for the payments.

For example, to receive the full amount of the $1,400 stimulus check or expanded Child Tax Credit, you'd have needed an income below $75,000 as a single filer or $150,000 as a married joint filer.

The impact of income on stimulus money is profound. In fact, while Americans with an income of $21,300 or below received an average of $3,590 -- more than the $3,450 across most households -- those with an income of $113,300 to $247,400 received an average of $2,830. And the amount of stimulus money provided dropped dramatically at even higher income levels, with those who earned $247,400 to $601,700 receiving an average of just $280, while households with incomes over $601,700 received an average of just $50 in stimulus funds.

2. Your family size is smaller

Family size is another determining factor in the amount of stimulus money available to you in 2021. The American Rescue Plan Act provided $1,400 per adult and per dependent. If there are multiple people in your family, you'd get multiple $1,400 checks -- but if there's just you, then you'd receive only one.

Both the Child Tax Credit and the Earned Income Tax Credit are also affected by family size. If you have no children, for example, you'd miss out entirely on the Child Tax Credit, which is worth $3,600 for children under the age of six and $3,000 for children six and up.

3. The IRS didn't have your updated details

If your income was low and you have children, then you may still have found that your payment was below average. This could happen if the IRS isn't aware of your updated details.

Stimulus payments and eligibility for the tax credit are based on 2020 tax returns. If your income fell in 2021, or if you only recently had a baby, the IRS wouldn't have known about your new circumstances and would have sent you less money than you are entitled to as a result.

If this is the reason you got less than the average, take heart. You can file your 2021 tax returns in early 2022 to claim the remainder of the funds you are owed. That way, you still have a chance to have more stimulus funds deposited into your bank account.

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