Third stimulus check — here’s what we know so far – Community News
Stimulus Check

Third stimulus check — here’s what we know so far

Most important points:

  • President-elect Joe Biden considers checks for $600 a “deposit” for further aid worth up to $2,000.
  • Some lawmakers are pushing for stricter income limits to ensure the checks reach the people who need it most.
  • The coming weeks will provide a clearer picture of what’s to come, as it would take weeks after the January 20 inauguration for legislation to move forward.

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Before the most recent $600 stimulus checks went out, there was already pressure on the upcoming Congress to go through another round. Here’s what we know about a third stimulus check.

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proven need

Given the number of struggling Americans, it’s hard to imagine a scenario where another round of stimulus checks isn’t sent out. According to Earnin, a financial services app, it took Americans most in need just a week to issue the first $1,200 checks received last spring. If paying for food and medicine is an issue, $1,200 won’t last long.

political promise

When President-elect Joe Biden learned that Congress had approved checks for $600, he called it a “deposit” on the money needed. Biden later tweeted, “$600 just isn’t enough when you have to choose between paying rent or putting food on the table. We need $2,000 incentive checks.”

While campaigning for Democrats in the second round of the Senate in Georgia, Biden said the election of Raphael Warnock and Jon Ossoff would not only give Democrats the majority of the vote in the Senate, but would also enable Congress. would state to get checks for $2,000 “immediately out the door, to help people who are really in trouble.”

Potential compromise

The CARES Act, signed into law on March 27, 2020, allowed a maximum of $1,200 per eligible adult. The recent stimulus passed in late December, called the COVID-Related Tax Relief Act, reduced that amount to $600. Because the $600 checks are deposited in bank accounts or on the way, there’s a good chance Republican (and some Democratic ) members of Congress will waive the idea of ​​sending another $2,000. Instead, they may want to use the $600 as a real down payment and vote to make the third round payments of $1,400. Basically, they will argue that combining today’s $600 checks with $1,400 checks will equal the $2,000 the House of Representatives has asked for.

Families with children

Checks sent through the CARES Act allowed $500 for each dependent child age 16 or younger. The last round of payments increased the amount to $600. The next payment round may contain a different amount. In two different bills passed by the House (The CASH Act and The HEROES Act), dependents would have received much more than $600 ($2,000 and $1,200, respectively). While it’s doubtful whether the next round of checks will allow such high amounts for dependents, it won’t be surprising if Congress raises the amount a bit.

There was also a huge gap in the first two accounts related to dependents. Millions of families with dependent children aged 17 to 24 received nothing for those children. That will probably change with a third round of checks.

New income limits?

When West Virginia Senator Joe Manchin, a Democrat, recently suggested he wouldn’t support another round of stimulus checks unless they were more “targeted,” he said he was concerned about the number of Americans receiving checks that may not be needed. and put them in a savings or investment account.

While it remains to be seen whether other Democrats will threaten to vote against another stimulus bill for the same reason, it’s reasonable to assume the income limits could be re-examined.

For the first two rounds, single Americans with adjusted gross income (AGI) on their 2019 tax returns of $75,000 or less, married couples with an AGI of $150,000 or less, and those who as heads of household have an AGI of $ 112,500 or less received a full check. Benefits were reduced for those who earned more. If there’s a real concern that those who earn more won’t need the money (even if they’ve lost their jobs since tax returns in 2019), it’s possible that the limits will be reset.

Choose your assessment year yourself?

Joe Biden will become the 46th president of the United States on January 20. Even if Congress starts debating the third round of stimulus checks the next day, it will take time to get a bill through both the House and Senate. By the time it’s on the new president’s desk, it could be weeks. Realistically, we’re looking at late February or early March for another round of checks to be distributed. What that means is that millions of people will have already filed their 2020 taxes by the time the IRS starts checking qualifying incomes.

While we’re not sure what year of tax return the IRS will use, it’s safe to assume they’ll be looking for the last return filed. Taxpayers who earned less in 2019 than in 2020 may want to hold off filing until the next round of checks is sent. Those who earned less in 2020 may want to file a quick file so the IRS has their most recent AGI.

Few things in life are certain, especially when Congress is involved. The coming weeks will provide a clearer picture of what to expect from a third round of stimulus checks.

In the meantime, if COVID-19 puts you in financial trouble, resources are available to help.

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Rakesh

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