$1,400 Stimulus and $3,000 incr Child Tax Credit -- Should I work less?

[Monsterdaddy]

Hi Folks,

I need some help here. In the pandemic relief bill it appears the $1,400 stimulus check and the $3,600/$3,000 increased Child Tax Credit are tied to the same income limits for a single person -- full payment at $75,000 and nothing at $80,000.

I have a non-working spouse, we file separately in a community property state, a child under 17, and another child age 17 in 2021. I don't qualify for the stimulus or increased Child Tax Credit based on 2019 or 2020 tax returns. My last shot at the payments is my 2021 income. So please help review my math because I am at the borderline of $150K-$160K (when split $75K-$80K):

If I earned an additional $10,000 from $150,000 to $160,000 AGI I would lose the following:

• $250 in lost Child Tax Credits
• $5,600 in stimulus payments ($1,400 x4)

Yet I would still need to pay:

• $2,200 in Federal taxes
• $416 in state taxes
• $145 in Medicare taxes
• $90 in additional Medicare taxes
• $500 in higher student loan payments (PAYE plan)

So if my math is right, then earning an extra $10K from $150K-$160K would actually give me a take home pay of $799?! Did I miss anything? If I'm right and my hospital starts asking again for people to stop working then I guess I'll be volunteering

---

Members don't see this ad.

 

[iamapharmacist]

Hi Folks,

I need some help here. In the pandemic relief bill it appears the $1,400 stimulus check and the $3,600/$3,000 increased Child Tax Credit are tied to the same income limits for a single person -- full payment at $75,000 and nothing at $80,000.

I have a non-working spouse, we file separately in a community property state, a child under 17, and another child age 17 in 2021. I don't qualify for the stimulus or increased Child Tax Credit based on 2019 or 2020 tax returns. My last shot at the payments is my 2021 income. So please help review my math because I am at the borderline of $150K-$160K (when split $75K-$80K):

If I earned an additional $10,000 from $150,000 to $160,000 AGI I would lose the following:

• $1,000 in increased Child Tax Credit for my under 17 child (I keep the old $2,000 Child Tax Credit)
• $3,000 in increased Child Tax Credit for my age 17 child (because he is 17 I lose it all)
• $5,600 in stimulus payments ($1,400 x4)

Yet I would still need to pay:

• $2,200 in Federal taxes
• $416 in state taxes
• $145 in Medicare taxes
• $90 in additional Medicare taxes
• $500 in higher student loan payments (PAYE plan)

So if my math is right, then earning an extra $10K from $150K-$160K would actually give me a take home pay of NEGATIVE $2,952?! Did I miss anything? If I'm right and my hospital starts asking again for people to stop working then I guess I'll be volunteering

How are you only paying $500 on PAYE making $150k?

 

[Monsterdaddy]

How are you only paying $500 on PAYE making $150k?

It's the incremental $5,000 x 10% on my half of the $10,000 from $150K to $160K.

 

[iamapharmacist]

It's the incremental $5,000 x 10% on my half of the $10,000 from $150K to $160K.

The what? Haha im lost.

 

[Monsterdaddy]

The what? Haha im lost.

If I earn an extra $10,000 after I have earned $150K for the year, I would add $5,000 to my tax return (filing separately). PAYE is 10% of discretionary income so the additional $5,000 of income x10% is therefore an additional $500 I would pay on my student loans next year. This whole math exercise is about the incremental income and it's effects on my taxes and take home pay (which in this case would be negative).

 

[WVUPharm2007]

Max out your 401k. Problem solved. Unless you already do, then congrats on that, but I guess that advice won't help.

 

[Monsterdaddy]

Max out your 401k. Problem solved. Unless you already do, then congrats on that, but I guess that advice won't help.

Unfortunately, everything I can do to reduce AGI is already maxed, 401k and HSA.

 

[lord999]

Time to take some rest and work on some home construction projects. I don't get how you get stimulus payments to your household if you're filing separately (your wife possibly could, but not you unless together).

 

[awval999]

The filing separately is going to get you. Why do you do that anyway? With a SAHM you get double the space in the 12% bracket.

 

[Sine Cura]

Welcome to the world of working people on Medicaid/EBT

(actually quite a diff world)

 

[iamapharmacist]

The filing separately is going to get you. Why do you do that anyway? With a SAHM you get double the space in the 12% bracket.

If youre on PAYE for your loan, its better to file separately. They will calculate monthly payment based on how you file your taxes. If filed jointly, theyll base it on combined salary. By filing separately, PAYE is solely based your income.

 

[Dred Pirate]

where are you getting $1400 x 4?
And does it actually make sense to file married filing separately? I am not a tax expert, but I know that is only beneficial in very rare cases

 

[zelman]

where are you getting $1400 x 4?
And does it actually make sense to file married filing separately? I am not a tax expert, but I know that is only beneficial in very rare cases

Children and adults will get the same credit this go-round

 

[Monsterdaddy]

Thanks for the responses. FYI, filing separately vs jointly doesn't affect tax brackets when living in a community property state; each spouse will have the same income (it splits 50/50) and since the MFS tax brackets are exactly half the MFJ brackets you both wind up paying the same taxes regardless of filing status. Things that do affect you are certain above the line deductions and credits (i.e. student loan interest, education credits) and you also will be subject to Additional Medicare Tax of 0.9% for wages above $125K (vs. $250K joint). So pretty much any marriage penalty was removed several tax reforms bills ago.

As it was pointed out, MFS is fantastic for reducing PAYE/IBR loan payments. In community property states, having a non-working spouse with no income basically cuts my income in half (but I keep the same family size including the spouse) so my payment was reduced by about two-thirds!

@Dred Pirate , I have 4 eligible for $1400 stimulus payment: me, wife and two kids. Doesn't matter which kid is on which MFS return, total is still 4.

Back to the OP, it's depressing to think about earning an extra $10K which is about a month's worth of work hours, and only earning 12 cents on the dollar. Anyone see it different or have another perspective? @lord999 suggestion is one I am seriously considering along with some vacation.

 

[awval999]

To answer your question.... yes.... The $150,000 to $160,000 phase out for the Stimulus 3.0 result in extraordinary marginal tax rates between $150,000 and $160,000 for 2021 income. For a family of 4 its a 56% federal margin rate.

You need to review the legislative text when it comes out. MFS sometimes has $10,000 income phase outs for deductions and credits so you need to make sure that the stimulus payments don't have these exclusions.

 

[Dred Pirate]

Children and adults will get the same credit this go-round

Gotcha. Since I don’t qualify I didn’t read to much into this go round.

 

[JustFillIt]

I will be getting a freaking boatload of money with this new stimulus round (I have lots of kids). This is how I feel about it:

Although the windfall is super fun, exciting, and all of that jazz - I worry deeply about how the effect of all this money injection will continue to deflate the value of my paycheck.

Prices are going up independently of inflation, pharmacist wages are plummeting, and now add inflation to the mix..... This freaking sucks and a lump sum of money really does not make me feel a whole lot better about it.

 

[Chrish]

This money printing encourages people to stay home rather than go to work and get the economy back on the feet.

I know many business owners who literally can’t find any employees to run their business because people are chilling at home. Some of these owners are working 16-18 hours a day 7 days a week because of this.

 

[Gombrich12]

Student loan forgiveness looks to be tax free through 2026. Either this pandemic has been the most financially rewarding recession ever or the value of a dollar is going to be falling hard in the coming years.

 

[WVUPharm2007]

Unless there is a sustained increase in consumer demand, there won't be inflation. We've been borderline deflationary since 2007.

 

[JustFillIt]

Unless there is a sustained increase in consumer demand, there won't be inflation. We've been borderline deflationary since 2007.

Not sure I agree with this.

 

[WVUPharm2007]

Not sure I agree with this.

What evidence from the last decade makes you think otherwise? They've been debt spending for 2 decades.

 

[confettiflyer]

Yeah by every measure we have been missing inflation for the better part of two decades. The treasury bill auctions reflect this...I’m really looking forward to some inflation.

 

[JustFillIt]

Well - I dunno.. I’m just going to take 8k of it and buy some GME with it tomorrow and spend the rest on upgrading my bathroom floors with heating coils... 😉. Joking!

But, no really.....

 

[Sparda29]

This money printing encourages people to stay home rather than go to work and get the economy back on the feet.

I know many business owners who literally can’t find any employees to run their business because people are chilling at home. Some of these owners are working 16-18 hours a day 7 days a week because of this.

They are probably offering **** wages then.

 

[Chrish]

They are probably offering **** wages then.

Nope. Its same with chain jobs. We have opened up requisitions for techs and there are no qualifying candidates. Same at other stores.

 

[DagS132]

Nope. Its same with chain jobs. We have opened up requisitions for techs and there are no qualifying candidates. Same at other stores.

I have only been seeing this for pharmacies. Is that what you are talking about?

 

[Chrish]

I have only been seeing this for pharmacies. Is that what you are talking about?

No other businesses as well. I know hotel owners and they are having terrible time recruiting desk-clerk/ housekeepers etc.

Owners are pulling 24 hour shifts at desk.

 

[Sparda29]

No other businesses as well. I know hotel owners and they are having terrible time recruiting desk-clerk/ housekeepers etc.

Owners are pulling 24 hour shifts at desk.

Are we supposed to feel bad for them?

Pay them competitively. Offer $20-25/hr with 100% employer paid health insurance and 4 weeks vacation.

 

[lane one]

I will be getting a freaking boatload of money with this new stimulus round (I have lots of kids). This is how I feel about it:

Although the windfall is super fun, exciting, and all of that jazz - I worry deeply about how the effect of all this money injection will continue to deflate the value of my paycheck.

Prices are going up independently of inflation, pharmacist wages are plummeting, and now add inflation to the mix..... This freaking sucks and a lump sum of money really does not make me feel a whole lot better about it.

I'll take it off your hands if it makes you feel less icky.

 

[Sine Cura]

It definitely has been difficult to hire techs compared to the past. Retail being everyone's last choice doesn't help.

Part of it is there are fewer people graduating from these tech programs.

In some states you need to have completed a training program to apply or have PTCB, but PTCB now requires that (or you lie and certify that you completed one).

Is your typical "manager" at a chain willing to put a rando off the street into the corporate-approved training program?

With the additional $3/hr for Walmart techs in some areas, the pay rate can approach $25 dollars/hr ($24.70/hr) for someone with previous pharmacy experience (in some parts of California anyway), yet no takers.

One of the reasons the base pay increased a few years ago was due to "turnover" but other jobs like desk PBM jobs are so much more relaxed that why would anyone good willingly subject themselves to retail garbage

 

[aqb]

My wife and I are at 162k, we have 1 kid. I haven’t maxed out 2020 hsa, but it still won’t bring me under... regardless is there a way to put 2020 income into that to bring down agi? Any other ideas?

If there’s not then we don’t qualify for anything?

 

[awval999]

My wife and I are at 162k, we have 1 kid. I haven’t maxed out 2020 hsa, but it still won’t bring me under... regardless is there a way to put 2020 income into that to bring down agi? Any other ideas?

If there’s not then we don’t qualify for anything?

ITS 2021 INCOME!
Yes, you won't get the prepayment in March 2021, but you should be able to reconcile in Spring 2022.

Can't you max 401ks?

 

[PharFromNormal]

Listen to all you with inflation fears... jpow has tools in his toolbox and they are prepared to use all of them if and when it’s appropriate.

Just wait when he unleashes Provider status to save us all.

 

[Chrish]

Are we supposed to feel bad for them?

Pay them competitively. Offer $20-25/hr with 100% employer paid health insurance and 4 weeks vacation.

That’s not the point. Government is offering unemployment and stimulus checks left and right which encourages people not to go back to work. This is counterproductive for the country’s economy.

 

[owlegrad]

That’s not the point. Government is offering unemployment and stimulus checks left and right which encourages people not to go back to work. This is counterproductive for the country’s economy.

If it is so much better on unemployment then those business owners should sell their businesses and collect unemployment. I bet they would sing a different tone if they actually tried living on unemployment. Why put yourself through the stress if you don’t need to?

 

[Chrish]

If it is so much better on unemployment then those business owners should sell their businesses and collect unemployment. I bet they would sing a different tone if they actually tried living on unemployment. Why put yourself through the stress if you don’t need to?

Because they wouldn’t make the same money as running a successful business??

On other hand, people are underestimating the no. of people who would rather make less but be on unemployment than go to work and make more.

Hell I know people who can make $600 by working 2 days a week collecting that much weekly in unemployment. They started new job as soon as that money ran out though. Never underestimate the willingness of people to not go to work.

 

[Sparda29]

That’s not the point. Government is offering unemployment and stimulus checks left and right which encourages people not to go back to work. This is counterproductive for the country’s economy.

$300/week unemployment is essentially $7.50/hr.

Maybe the employers should pay them more than that.

 

[Chrish]

$300/week unemployment is essentially $7.50/hr.

Maybe the employers should pay them more than that.

And what if they still can’t find people after offering to pay more (which is what’s happening)?

 

[owlegrad]

That is some classic anti-labor rhetoric right there. *chef’s kiss*

 

[JustFillIt]

I recognize the clear fact that our workers are being paid too little and it has everything to do with greed and nothing to do with the fact that these businesses will, “go out of business due to labor costs”. I understand that some (maybe a lot but certainly not most) small business will struggle with this but overall they would be fine if greed is not the model of their budget.

We are simply coming to a point in history where our rich are being paid too much while our poor are being paid too little - this needs to be corrected and it’s blatantly disgusting.

 

[DagS132]

And what if they still can’t find people after offering to pay more (which is what’s happening)?

I don't know where you live but its definitely not happening here where I live. I don't see any openings other than at pharmacies right now.

 

[Chrish]

I recognize the clear fact that our workers are being paid too little and it has everything to do with greed and nothing to do with the fact that these businesses will, “go out of business due to labor costs”. I understand that some (maybe a lot but certainly not most) small business will struggle with this but overall they would be fine if greed is not the model of their budget.

We are simply coming to a point in history where our rich are being paid too much while our poor are being paid too little - this needs to be corrected and it’s blatantly disgusting.

I agree. Minimum wage of $8 an hour is ridiculous and I don't know how you can make ends meet with that salary. But also, offering a desk-clerk $20 - $25 an hour with all the benefits like the above user suggested is not practical. Let's be honest here. If businesses started doing that, they won't be business anymore, They will be non-profit organizations since there won't be any money to be made.

Yes there is much greed in this country from rich people. But there also lies victim mentality from certain group. This group feels entitled. See some of the above responses for example.. "Are we supposed to feel bad for them?" or "Why don't they quit business and file for unemployment themselves?"

It's like blaming rich people for being rich. I don't really understand this.

 

[Chrish]

I have always felt that good pharm techs get paid too little,. They should make close to $20 an hour. But the problem is good techs make up 20% or less of overall tech percentage and others are so bad they barely deserve $10 an hour (if that). So, how the hell do you differentiate between these categories? The answer is you can't and that's why average tech salary is as low as it is at $13 -14.

 

[johnpharm01]

Hi Folks,

I need some help here. In the pandemic relief bill it appears the $1,400 stimulus check and the $3,600/$3,000 increased Child Tax Credit are tied to the same income limits for a single person -- full payment at $75,000 and nothing at $80,000.

I have a non-working spouse, we file separately in a community property state, a child under 17, and another child age 17 in 2021. I don't qualify for the stimulus or increased Child Tax Credit based on 2019 or 2020 tax returns. My last shot at the payments is my 2021 income. So please help review my math because I am at the borderline of $150K-$160K (when split $75K-$80K):

If I earned an additional $10,000 from $150,000 to $160,000 AGI I would lose the following:

• $250 in lost Child Tax Credits
• $5,600 in stimulus payments ($1,400 x4)

Yet I would still need to pay:

• $2,200 in Federal taxes
• $416 in state taxes
• $145 in Medicare taxes
• $90 in additional Medicare taxes
• $500 in higher student loan payments (PAYE plan)

So if my math is right, then earning an extra $10K from $150K-$160K would actually give me a take home pay of $799?! Did I miss anything? If I'm right and my hospital starts asking again for people to stop working then I guess I'll be volunteering

Yes work less and take government handouts even though you could provide for yourself. Or have pride and support yourself.

 

[PharmDminus]

$300/week unemployment is essentially $7.50/hr.

Maybe the employers should pay them more than that.

the $300 federal is in addition to the main payment from each individual state

 

[WorthlessOxygen]

I have always felt that good pharm techs get paid too little,. They should make close to $20 an hour. But the problem is good techs make up 20% or less of overall tech percentage and others are so bad they barely deserve $10 an hour (if that). So, how the hell do you differentiate between these categories? The answer is you can't and that's why average tech salary is as low as it is at $13 -14.

How are you going to attract good techs if they know you're not going to be paying higher $13? Start paying them what they're worth and decent workers will be more willing to apply/stay long term.

 

[owlegrad]

But also, offering a desk-clerk $20 - $25 an hour with all the benefits like the above user suggested is not practical. Let's be honest here. If businesses started doing that, they won't be business anymore, They will be non-profit organizations since there won't be any money to be

The billionaires of America got richer during the pandemic. Can you even imagine what a billion dollars is? I cannot. I would be more sympathetic to the argument that businesses “can’t afford to pay more” if the billionaire owners weren’t getting more profit every day. Clearly they can afford to pay more since they are already paying more, just not to the working class.

 

[Chrish]

How are you going to attract good techs if they know you're not going to be paying higher $13? Start paying them what they're worth and decent workers will be more willing to apply/stay long term.

I can do it if I owned the operation which I don't since I work for the chain. I can give them high ratings in eval which will increase their salary by certain percentage but it will still take them years before they reach the level where they get paid what they truly deserve.

 

[Chrish]

The billionaires of America got richer during the pandemic. Can you even imagine what a billion dollars is? I cannot. I would be more sympathetic to the argument that businesses “can’t afford to pay more” if the billionaire owners weren’t getting more profit every day. Clearly they can afford to pay more since they are already paying more, just not to the working class.

Except my original post was about small business owners; not Elon Musk or Jeff Bezos. And I still received those weird responses.