The second round of federal stimulus checks now hits bank accounts after President Donald Trump signed the $ 900 billion stimulus bill last week. Last minute passage of the emergency response legislation will provide a modest lift to the 60% of Americans who have suffered financial hardship as a result of the coronavirus pandemic, but millions may be disappointed to find out they are among the groups ineligible for the payment.
The checks will is $ 600 for each eligible adult and child – half of the $ 1,200 checks sent earlier this year. The $ 600 per person payments are part of the stimulus bill passed by Congress in December and signed by Mr. Trump on the evening of December 27.
Trump and Democratic leaders’ efforts to increase so-called economic impact payments to $ 2,000 per adult have stalled after Senate Leader Mitch McConnell in December blocked an attempt to vote on the matter. Wall Street analysts say the push has little chance of moving forward, given the additional hundreds of billions of dollars the larger payment would cost.
In drafting the latest incentive bill, lawmakers have sought to resolve several issues that limited the payment of the first round of checks earlier this year. For example, checks are distributed to immigrant families with “mixed status” – families where U.S. citizens are married to immigrants without a green card – a group that couldn’t receive the checks earlier this year. Children under 17 also receive the same $ 600 amount as adults, compared to $ 500 in the first round.
“Children are eligible for the same benefits as eligible adults, and families with members of mixed immigration status with a valid Social Security number for one spouse are also eligible for the payments, unlike the CARES Act rebates,” the Tax said. Foundation.
However, the income limits in the most recent stimulus package are slightly different from the income limits enshrined in the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which will cut off more middle-class families from receiving aid. And there are a few groups that were overlooked in the first round of checks that are also missing out on a second check.
Chief among them: dependent children who are 17 years old and adults who are claimed as dependents on another person’s tax return, as is customary with students.
The IRS said on Dec. 29 that the “Get My Payment” website would be up and running in a few days, allowing consumers to check the status of their payments and update their bank account information. But as of the morning of January 4, the site was still empty.
Below are the groups of people who will not receive a check for $ 600 in the second round.
Dependent child of 17 years
The $ 900 billion stimulus package donates $ 600 to every child in a family – as long as they are considered “eligible children” under the IRS tax code for the Child Tax Credit. Unfortunately for parents of older teens, the tax code defines “eligible children” as those who have not yet reached their 17th birthday.
In other words, the $ 600 will be spent on kids 16 or younger.
The IRS will use the 2019 tax returns to determine their incentive payments, meaning that teens who reached their 17th birthday in the second half of 2020 – after the tax return was due to the IRS – could still qualify.
Adult dependents, from students to seniors
According to the Tax Foundation, no adult dependents are eligible for the $ 600 checks.
This means that most students, who are typically considered dependents by their parents, are not eligible for the checks. That bothered some students, who expressed their frustration on social media. Many grapple with a range of problems in the pandemic, from food insecurity to lost earnings from on-campus jobs cut due to COVID-19 restrictions.
Older adults, from seniors to disabled individuals, who are alleged to be dependents, are also being banned, a problem some have called “a slap in the face” on social media.
Disabled adults and seniors who are claimed as dependents often face higher costs due to things like higher medical costs.
Singles earn more than $ 87,000
The second round of checks will have the same kind of income phasing as in the CARES Act, with incentive checks reduced for earnings in excess of $ 75,000 per single or $ 150,000 per married couple.
The amount of payments individuals receive is reduced by $ 5 for every $ 100 in income earned above those thresholds, according to the House Appropriations Committee.
But that formula, coupled with the smaller $ 600 in checks, means the income threshold for receiving money will be lower: Single people who earn more than $ 87,000 are not eligible – compared to the $ 99,000 phase-out threshold for single files in the CARES Act.
Married couples earn more than $ 174,000
For a similar reason, married couples will face a lower income threshold for receiving the $ 600 checks. Couples who earn more than $ 174,000 will receive no benefits, less than $ 198,000 in the CARES Act.
In total, almost everyone in the bottom 80% of the income distribution in the US will receive a check, according to the Tax Foundation’s estimate. The proportion of applicants who will receive a check is declining for people whose income places them in the top 20% of earners, with very few taxpayers in the top 5% eligible, the Tax Foundation estimates.