Stimulus Check Calculator - $40k Income Cap Proposal
In July 2020, Senate Majority Leader Mitch McConnell proposed narrowing direct stimulus payments to workers earning roughly $40,000 or less per year. This calculator estimates how much you would have received under that framework, using the same $5-per-$100 phaseout rate as the CARES Act. Enter your filing status, adjusted gross income, and number of qualifying children to see your estimated payment, the phaseout reduction, and a chart of how payments vary with income. Note: this bill was never enacted - it remained a proposal. The actual second stimulus check ($600) was authorized by the Consolidated Appropriations Act, 2021.
What was the $40k-cap stimulus proposal?
In early July 2020, Senate Majority Leader Mitch McConnell said in a television interview that direct stimulus payments should target "the people who have been hit the hardest - people who make about $40,000 a year or less." A Federal Reserve study released around that time found that 40 percent of households earning under $40,000 had lost a job in March 2020, reinforcing the case for focusing relief on lower-income workers. The proposal never advanced into legislation with specific payment rules, income thresholds, or phaseout mechanics. Calculators that modeled it - including OmniCalculator - applied the same $5-per-$100 phaseout rate used by the CARES Act, but calibrated the threshold so that payments reach zero at $40,000 for single filers (doubled to $80,000 for married couples). This tool follows the same convention. The per-dependent bonus of $500 per qualifying child under 17 mirrors the CARES Act first stimulus structure.
How the income phaseout works under this proposal
The $5-per-$100 phaseout is the same mechanism Congress used for all three rounds of actual stimulus payments. For every complete $100 of adjusted gross income (AGI) above the full-payment floor, your check shrinks by $5. The full-payment floor is the income level at which the phaseout begins; below it, you receive the maximum amount. Above the hard cap your payment is zero. For a single filer with no dependents, the full-payment floor is $16,000 (because $1,200 / 0.05 = $24,000 phaseout range; $40,000 - $24,000 = $16,000). Adding one qualifying child raises both the total payment and the cap: the $500 child bonus adds another $500 / 0.05 = $10,000 to the cap, so the single filer with one child sees payments reach zero at $50,000, not $40,000. Married filing jointly couples start at double the single amounts throughout.
How this proposal compared to the three actual stimulus rounds
All three enacted rounds used much higher income thresholds. The CARES Act (round one, March 2020) provided $1,200 per adult and $500 per child under 17, with full payments to single filers up to $75,000 and payments reaching zero at $99,000. The Consolidated Appropriations Act (round two, December 2020) paid $600 per adult and $600 per child under 17, with the same $75,000 threshold. The American Rescue Plan (round three, March 2021) paid $1,400 per adult and $1,400 per child under 17, but used a much faster phaseout: payments reached zero at $80,000 for single filers, down from $99,000. By contrast, the $40k-cap proposal would have cut off single filers at less than half the income allowed by the enacted CARES Act, leaving out most middle-income households that received payments under the actual legislation.
What counts as adjusted gross income for stimulus purposes
Adjusted gross income (AGI) is your total income - wages, self-employment, investment gains, retirement distributions, and other sources - minus above-the-line deductions such as IRA contributions, health savings account contributions, student loan interest, alimony paid under pre-2019 agreements, and contributions to self-employed retirement plans. For all enacted stimulus rounds, the IRS used the AGI from your most recent filed return (2019 for most people, 2018 if 2019 was not yet filed). AGI appears on line 11 of Form 1040 (2019 and later) or line 7 of Form 1040 (2018). Because your stimulus was based on a prior-year return, the IRS later reconciled payments with your 2020 actual AGI via the Recovery Rebate Credit on the 2020 return.
Proposed $40k-cap payment amounts by filing status
| Filing status | Full payment below (AGI) | Hard cap (AGI) | Base payment | Max (3 children) |
|---|---|---|---|---|
| Single / MFS | $16,000 | $40,000 | $1,200 | $2,700 |
| Head of Household | $16,000 | $40,000 | $1,200 | $2,700 |
| Married Filing Jointly | $32,000 | $80,000 | $2,400 | $3,900 |
Estimates under the hypothetical $40k-cap proposal using a $5/$100 phaseout rate. Base payment is $1,200 per adult, $500 per qualifying child under 17. This bill was never enacted.
Frequently asked questions
Did the $40k-cap stimulus check ever pass?
No. The $40k-cap idea was a comment by Senate Majority Leader McConnell in July 2020 about targeting relief at lower earners. It was never introduced as a formal bill with specific phaseout rules, and no vote was taken. The second stimulus check that eventually became law, under the Consolidated Appropriations Act signed December 27, 2020, paid $600 per eligible adult with income thresholds similar to the original CARES Act ($75,000 for single filers), not a $40,000 hard cap.
How much would a single filer earning $30,000 receive under this proposal?
With no dependents, a single filer with an AGI of $30,000 would receive the full $1,200 base payment, because $30,000 is above the $16,000 full-payment floor but the phaseout ($5 per $100 over $16,000) would reduce the payment by $700, leaving $500. Wait - let us recalculate: $30,000 - $16,000 = $14,000 above the floor; 140 complete $100 blocks x $5 = $700 reduction; $1,200 - $700 = $500. So this filer would receive $500. Adding one qualifying child raises the full-payment floor to $6,000 and the cap to $50,000, resulting in a full $1,700 payment at $30,000 AGI with one child.
Do dependents change the income cap under this proposal?
Yes. Each qualifying child under 17 adds $500 to the total payment and extends the hard income cap by $10,000 (because $500 / 0.05 = $10,000). A single filer with one qualifying child would see payments reach zero at $50,000 rather than $40,000. With two children the cap becomes $60,000, and with three children it becomes $70,000. This mirrors how dependents raised the phaseout ceiling in all three enacted stimulus rounds.
What income is used for the calculation?
The calculator uses adjusted gross income (AGI), the same measure used for all enacted stimulus checks. AGI is your gross income minus specific above-the-line deductions (IRA contributions, student loan interest, health savings account deposits, and similar items). You can find your AGI on line 11 of Form 1040 (2019 or 2020 return) or line 7 of Form 1040 (2018 return).
Why does the calculator show payments starting to phase out at incomes well below $40,000?
The $5-per-$100 phaseout rate means that a $1,200 payment phases out over a $24,000 income range. Working backward from the $40,000 hard cap, the full-payment floor is $40,000 - $24,000 = $16,000. Anyone earning between $16,000 and $40,000 receives a partial payment. Under the actual CARES Act, by contrast, the full-payment floor for a single filer was $75,000 and the zero point was $99,000, giving a much wider full-payment band.
How does this proposal compare to what was actually paid?
The CARES Act (March 2020, round one) paid $1,200 per adult and was available to single filers earning up to $99,000. The actual second check (December 2020) paid $600 per adult up to $87,000. The American Rescue Plan (March 2021) paid $1,400 per adult up to $80,000. The proposed $40k cap would have been far more restrictive, cutting off single filers at just $40,000 - less than half the threshold used for any of the three enacted rounds.
Are adult dependents included in this proposal?
The proposal was vague on dependency rules, but calculators that modeled it, including the OmniCalculator version, used the CARES Act dependent rules as a default: only qualifying children under 17 receive the bonus payment. Adult dependents (college students, elderly parents) were not separately specified and were not covered by the CARES Act either. The HEROES Act was the only major COVID-19 stimulus proposal to explicitly include adult dependents.