WASHINGTON — A third round of coronavirus relief checks should be coming soon, likely within days or weeks.
Millions of Americans reeling from the economic damage of the pandemic would receive one-time outright payments of up to $1,400. The payments are part of President Joe Biden’s $1.9 trillion bailout, his first major initiative since taking office in January, which is likely to receive final approval in the House on Wednesday morning.
Not everyone gets the checks.
As with the two previous rounds of payment — $1,200 per person handed out last spring and $600 per person in December — some people will be left out.
Here’s a closer look at who gets the checks and who doesn’t:
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Congress has made a major change that this time will restrict who gets the checks.
Under the new legislation, individuals with adjusted gross income of $80,000 or less ($160,000 for joint filers) are eligible for a one-time payment of up to $1,400, plus an additional $1,400 for each dependent child. Payments will begin to phase out for individuals earning $75,000 and will be stopped completely for anyone earning more than $80,000. For couples applying jointly, the phase-out for those earning $150,000 starts and ends at $160,000. For those who sign up as a household head, the phase-out starts at $112,500 and ends at $120,000.
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The Internal Revenue Service will likely use tax returns to calculate how much money people will get. If recipients have already filed for 2020, their check will be based on their income from last year. If not, their 2019 returns will likely be used to determine how much they will get.
The new eligibility rules mean the checks will be phased out more quickly than during the two previous rounds, when the limit was $99,000 for individuals and $198,000 for joint depositors without children.
Congress changed eligibility requirements in response to concerns from Republicans and some moderate Democrats who argued that the payments should go to the people who need them most.
The faster phase-out means as many as 6.5 million Americans who received checks in the first two rounds will be left out, said Garrett Watson, senior policy analyst at the Tax Foundation, a Washington-based think tank.
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Other analysts estimate the number of people who will be excluded even higher – as many as 7 million or 8 million.
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A new revision this time is good news for many students.
In the first two rounds of pandemic relief, students aged 17 or older were not eligible for a check if their parents or guardians claimed them as a dependent. Nor did their parents receive the extra money awarded for each dependent child. This only applied to children aged 16 and under.
As a result, many high school and senior and college students didn’t get a check and their parents didn’t get the extra money.
This time around, parents with dependent children of any age will receive $1,400 per dependent, as long as they meet the income requirements.
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Elderly and Disabled
Most seniors are eligible for a check, just as they were during the first two rounds. One change means that a number of seniors who were excluded last year will be eligible this time.
During the first two rounds of payment, seniors and disabled adults were eligible for a check as long as no one else claimed them as a dependent. If so, then they were not eligible. For example, if a disabled adult lived at home with his or her parents and the parents claimed him or her from their income taxes, the disabled adult would not receive a check.
This time around, seniors and disabled adults claimed by another dependent are eligible for a check.
Elderly advocacy groups urged Congress to make dependents eligible for the payments, arguing that doing so would provide much-needed relief to families often faced with both severe emotional and financial costs of meeting the needs. of an older adult.
By expanding the definition of eligible dependents, as many as 26 million more people could qualify for a check, said Kyle Pomerleau, a tax policy expert at the American Enterprise Institute.
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As in the first two rounds, immigrants are eligible for a check if they meet the eligibility criteria and have a valid Social Security number.
Immigrants with green cards or H-1B and H-2A work visas are eligible for a check. Non-residents, agency workers and immigrants residing illegally in the country are not.
Mixed-status families — those of different nationalities and immigration classifications — are eligible for a check as long as a household member has a Social Security number. In other words, if one of the spouses is a U.S. citizen or legal permanent resident and the other spouse is not, the family is still eligible for a check as long as one of them has a Social Security number.
Such families were not eligible for a check during the first round of payments, meaning as many as 5.1 million U.S. citizens and documented immigrants were excluded, according to the Migration Policy Institute.
Congress allowed mixed-status families to receive a check in the second round late last year and made the policy retroactive so that families could claim payments missed during the first round.
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Low-income people who don’t file a tax return
Low-income people who haven’t filed taxes in the past two years are eligible for a check, but millions of them won’t get one unless they go the extra mile.
Those who receive Social Security benefits are probably all set. Social Security recipients automatically get an exemption check if the IRS follows the same procedure as the first two rounds. If so, the government will use Social Security data to determine how much they receive and where they are sent.
For others who haven’t filed taxes in the past two years, it’s a different story.
Individuals are not required to file taxes if they earn less than $12,000 per year. Tax preparation company TurboTax estimates that 10 million Americans fall into that category, and they include some low-income individuals, recipients of supplemental security income, and beneficiaries of Veterans Affairs.
Those individuals qualify for an exemption, but without their income tax returns, it’s more difficult for the IRS to verify their income, calculate their payout, and know where to send it.
Last year, the IRS set up a web portal that allows them to register for a payment. The federal government has not specified how it will identify or calculate their payments this time. Garrett said the IRS is expected to rely on the online portal for the third round as well.
How fast are the checks coming?
Hard to say. The Ministry of Finance has not indicated when it will start distributing the money.
Garrett said the timeline will likely be similar to the second round of payments approved in December. Americans who got their checks via direct deposit started receiving the payments about two weeks after the legislation was signed. Those who received a paper check had to wait longer.
Biden said last week that many Americans should receive their payments before the end of the month.
The IRS said in mid-February it had distributed all checks to everyone who qualified in the first two rounds.
More than 160 million payments totaling $270 billion were distributed during the first round last spring, the agency said. In the second round late last year, more than 147 million payments were made for a total of more than $142 billion.
Michael Collins covers the White House. Follow him on Twitter @mcollinsNEWS.
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