The second round of stimulus checks could soon hit bank accounts after President Donald Trump signed the $ 900 billion stimulus bill. The last-minute signing was a welcome development for the 6 in 10 people who suffered a financial setback from the pandemic, but millions of people can become disappointed if they belong to the groups not eligible for the benefit.
It is very likely that the checks will are $ 600 for each adult and child, or half the amount of the $ 1,200 checks sent earlier this year. The payments of $ 600 per person are part of the stimulus bill passed by Congress earlier this month and signed by Mr Trump on Sunday night.
Still, Mr Trump and House Speaker Nancy Pelosi have called on lawmakers to increase the amount to $ 2,000 per adult – a request that Wall Street analysts say has a slim chance of moving forward given the additional hundreds of billions of dollars so ‘ n increase in the amount would cost.
In drafting the latest incentive law, lawmakers have sought to correct a few issues that limited the payment of the first incentive vouchers earlier this year. For example, the distribution of the second stimulus controls includes so-called immigrant families of “mixed status”or 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 the age of 17 receive the same amount of $ 600 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 single spouse Social Security number are also eligible for the benefits, unlike the CARES Act rebates,” the Tax said. Foundation. .
However, the income limits in the most recent stimulus package are slightly different from the Coronavirus Aid, Relief and Economic Security Act (or the CARES Act), which will cut 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 common among students.
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 are grappling with a range of problems in the pandemic, from food insecurity to lost earnings from on-campus jobs that were 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 have 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.
Of course, even if they did not receive the $ 600 themselves, single people and couples with incomes above those thresholds would still receive payments for their children as long as those children are under 17.