The tax agency added that it started mailing paper checks on December 30 to people who don't have their bank account info on file with the IRS. The secondstimuluscheck follows a rocky rollout this spring for more than 160 million stimulus payments directed by the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The IRS will use the same method to get the money to people as it did in the first round, said Mark Steer, chief tax information officer at Jackson Hewitt. That website allowed people this spring to provide or update their bank account data to the IRS.
On December 29, the IRS said the “payments are automatic” for people who filed a 2019 tax return, as well as for people who receive Social Security benefits, Railroad Retirement benefits or Supplemental Security Income and Veterans Affairs beneficiaries who didn't file a tax return. Senate Majority Leader Mitch McConnell on Tuesday blocked an attempt to vote on the $2,000 stimulus checks approved by the House, but resurrected the higher payments in a new bill that includes other items on Mr. Trump's wish list, including the repeal of Section 230, which shields social media companies from lawsuits.
“If additional legislation is enacted to provide for an increased amount, Economic Impact Payments that have been issued will be topped up as quickly as possible,” according to a Treasury statement on December 29. Under the new relief bill, the U.S. government will allow mixed-status households of American citizens with undocumented family members to receive stimulus checks that they were denied under the first round of legislation in the spring, and which sparked several lawsuits.
Last-minute passage of the relief legislation will offer a modest lift to the 60% of Americans who have suffered financial woes due to the coronavirus pandemic, yet millions may be disappointed to discover they're among the groups who don't qualify for the payment. Wall Street analysts say the push has only a slim chance of moving forward, noting the additional hundreds of billions of dollars the larger payment would cost.
In crafting the latest stimulus bill, lawmakers have sought to rectify several issues that restricted payment of the first round of checks earlier this year. Unfortunately for parents of older teens, the tax code defines “qualifying children” as those who haven't yet hit their 17th birthday.
This means that most college students, who are typically claimed as dependents by their parents, won't qualify for the checks. Many are struggling with a range of issues in the pandemic, from food insecurity to lost income from campus jobs that were curtailed because of COVID-19 restrictions.
Older adults, from seniors to disabled individuals, who are claimed as dependents are also excluded, an issue that some on social media called “a slap in the face.” The second round of checks will have the same type of income phaseouts as in the CARES Act, with the stimulus check payments reduced for earnings above $75,000 per single person or $150,000 per married couple.
For a similar reason, married couples will face a lower income threshold for receiving the $600 checks. The deal was based on a $908 billion bipartisan proposal, which initially left out so-called stimulus checks, focusing instead on providing jobless workers with an additional $300 in weekly unemployment aid.
Some people said the $600 payments would be far too low, with former Secretary of Labor Robert Reich writing on Twitter that the package comes at a time when COVID-19 infections and deaths are far higher than in the spring. Some economists echoed some of Sanders' concerns, noting that while the $900 billion package was better than nothing, it fell far short of the funding needed to get families and the economy on stronger footing.
“The reality of an alarming health situation, softening labor market and weakening demand as Biden takes office next month will prompt calls for further fiscal stimulus, ” he noted. Holding off on $160 billion in funding for state and local governments was key to finding support for another round of stimulus payments, according to analysts at Raymond James.
The $900 billion measure will help millions of jobless workers by adding 11 weeks to the unemployment programs that are now set to expire by the end of December. Congress reaches deal on COVID-19 economic relief...03:07 “This short duration, and limited aid, means that the stimulus bill won't give jobless workers a cushion until a point closer to when the vaccine can roll out and people can go back to their shuttered occupations,” said Andrew Settler, an expert on unemployment with the left-leaning Century Foundation, said in an email statement on December 21.
At the end of November, more consumers said they were feeling a financial impact from the COVID-19 crisis, reaching almost 6 in 10 people and representing the second consecutive monthly increase of hardship, according to a survey from TransUnion. “Our numbers are bigger than ever and the scale of this pandemic is almost limitless, but the aid is not,” restaurant owner Stephanie Benin told CBS Monarch before the deal was reached.
The calculator bases its estimate on information from your latest tax return, including your filing status, income and the number of kids in your household. Lawmakers in Washington, D.C., have finally reached a tentative deal to authorize the issuance of a second coronavirus-related stimulus check to qualified recipients.
The direct payments to Americans this latest bill authorizes are intended to help individuals and families cope with the economic fallout from the ongoing coronavirus pandemic. If you are a Social Security retiree, you may be wondering if you're likely to receive this soon-to-be authorized COVID-19-related payment and how much money you're in line to get.
Some plans under consideration when the bill was being negotiated -- such as payroll tax reductions -- would have left out most seniors on Social Security. Most retirees do not have child dependents that would entitle them to the additional $600 deposits beyond the ones they're personally eligible for.
That means it's most likely that Social Security beneficiaries who are single will get a total of $600 if their income is not too high while married senior couples will get $1,200 in combined stimulus money. The IRS could begin sending out payments as early as the week of Jan. 4 via direct deposit while paper checks should start getting mailed around a week later, assuming the agency follows a similar timeline as it did for CARES Act payments.
Older Americans will receive only a small Social Security cost-of-living adjustment next year, which is likely to accelerate the decline in buying power that has been ongoing for decades. Under the new COVID-19 relief package, at the full benefit amount, a family of four could potentially receive $2,400, though the income criteria for the secondstimuluscheck have not yet been released.
However, if it follows the same structure Ashe March CARES Act, those qualifying for a full stimulus payment include individuals earning up to $75,000, or $112,500 as head of household and $150,000 as a married couple filing jointly. “I was surprised last spring at how rapidly the Treasury Department was able to roll out the economic impact payments,” said Janet Holtzblatt, senior fellow at the Urban-Brookings Tax Policy Center.
Treasury Secretary Steven Mnuchin has already promised a similarly aggressive timeline, saying that he could start processing checks as soon as the legislation passes. That includes those who signed up to receive a refund by direct deposit when filing their 2018 and/or 2019 taxes, and it may also extend to the 14 million people who previously registered their details via two new online tools the IRS built this spring to collect banking and contact information.
The Treasury did not respond to CNBC's request for comment whether previously captured banking information would be reused, should there be a second round of stimulus checks. But how fast that money is received is largely dependent on whether the recipient already uses direct deposit for their monthly benefit payment.
For those who are eligible for a stimulus payment but have not shared their bank account details with the IRS, they can expect to instead receive a paper check or a prepaid debit card. IRS and Treasury could again prioritize the mailing of the second stimulus checks to the country's lowest-income earners, starting with individuals making less than $20,000 per year.
“They can get the stimulus payment they are eligible for in the form of a Recovery Rebate Credit when they file their 2020 taxes,” said Lisa Greene-Lewis, certified public accountant and TurboT ax expert. For those concerned about how this might complicate the filing process this year, Greene-Lewis tells filers not to worry because automated tax preparation software will factor this in for you.
“It will ask up front if the filer received a stimulus payment and then calculate the Recovery Rebate Credit based on actual 2020 income.” Our calculator provides an estimate of the amount you might receive in a second federal stimulus check, based on the information you enter.
This is only an estimate; the actual amount you receive, if any, will be determined by the Internal Revenue Service (IRS), the government agency in charge of disbursing the second round of stimulus checks, formerly known as economic impact payments. According to the House Appropriations Committee, eligible Social Security beneficiaries and railroad retirees who are not typically required to file a tax return will automatically receive a $600 stimulus check.
The IRS will use information contained in annual SSA-1099 and RRB-1099 tax forms to generate the stimulus checks automatically. In addition, the House Appropriations Committee says Veterans Affairs (VA) beneficiaries and recipients of Supplemental Security Income (SSI) will receive automatic $600 checks.
The IRS will start distributing checks as early as the last week of December. Most people will get their checks via electronic bank deposit, which is the fastest method.
Generally speaking, if you got your first stimulus check via electronic bank deposit, you’ll get the second one that way, too. The calculator asks about three things: your tax filing status (single, married filing jointly, married filing separately, head of household, or qualifying widow or widower); your adjusted gross income (AGI) from your 2019 tax return; and the number of children under age 17 you claimed as dependents.
The amount of the stimulus check is gradually reduced once AGI exceeds these limits. An individual (either single filer or married filing separately) with an AGI above $87,000 would not receive a stimulus check.
A couple filing jointly would not receive a stimulus check once AGI tops $174,000. Once the AGI for a filer hits the income limit for the full stimulus check, the amount of the payment is reduced by $5 for each $100 above the threshold.
You can find AGI on line 8b of your 2019 federal 1040 income tax return. Editor’s Note: This calculator has been updated for the second round of $600 stimulus checks.
McConnell on December 31 again rebuffed a push for the Senate to take up a bill increasing coronavirus relief checks to Americans from $600 to $2,000, calling the proposal “socialism for rich people.” Almost 6 in 10 consumers said they have suffered a financial setback due to the pandemic as of the end of November, according to a study from TransUnion, which also found that 40% of those households said they had been banking on the prospect of another stimulus check to help them pay their bills.
It would mark the second time lawmakers have sought to boost the checks to $2,000 per person, following a December 24 vote in the House during a pro forma session. “The President must immediately call on Congressional Republicans to end their obstruction and to join him and Democrats in support of our stand-alone legislation to increase direct payment checks to $2,000, which will be brought to the Floor tomorrow,” Pelosi tweeted on December 28.
The second round of checks would have the same type of income phaseouts as in the CARES Act, with the stimulus check payments reduced for earnings above $75,000 per single person or $150,000 per married couple. Aside from the smaller stimulus checks for adults, the other major change under the bill passed by Congress is the amount provided for dependent children: $600 for each child, up from $500 in the CARES Act.
This is important to many families because the first round of stimulus checks only went to American citizens or immigrants with resident alien status, also known as a Green Card. Denying checks to U.S. citizens due to their spousal or parental relationship to an immigrant prompted lawsuits earlier this year over what plaintiffs claimed was an unconstitutional action.