The Senate on Saturday approved President Biden’s $ 1.9 trillion coronavirus aid package, sending a third round of stimulus checks to most Americans. That raises questions about when the checks might end up in bank accounts, especially for those dealing with job or income loss.
The bill will be returned to the House for final approval early next week, as the Senate and House versions of the bill have some differences, then go to Mr. Biden for his signature. After the bill is legally signed, the IRS can begin delivering the checks within a few days to a week, based on the time frame for the previous round of checks – possibly as early as the weekend of March 13.
“Next weekend, a couple earning less than $ 160,000 could end up with $ 2,800 in their checking account,” said Chris Krueger of Cowen & Co. in an analyst note before the Senate passed the bill, which he had expected to happen this weekend.
The passing of the spending bill was announced by poverty and unemployment experts, who said the $ 1,400 checks and other amenities – such as an extension of the additional $ 300 per week unemployment aid and an extension of the children’s tax credit – will help families pay their bills and lift children out of poverty. Almost half of Americans are still experiencing financial pain a year after the pandemic shut down the economy and triggered massive layoffs, according to new research from the Pew Research Center.
“Working families will get $ 1,400 per person from a third incentive check, plus they will benefit from a muscular child discount of $ 3,000 per child,” said Andrew Stettner, an unemployment expert at the Century Foundation, in a statement by email. mail on Saturday. . “That is real aid that can help reverse the unprecedented economic inequalities exposed and exacerbated by the pandemic.”
He added, “The federal response to COVID-19 has already averted poverty for millions of Americans, and this package is poised to continue that pivotal work.”
Applause and cheers
The bill’s passage through the senate was met with cheers and applause from Democrats on Saturday, all of whom voted for it. Because GOP Senator Dan Sullivan left Friday due to a family emergency, Vice President Kamala Harris did not have to visit the Capitol to cut ties.
However, it is possible that fewer Americans will receive checks in the third round of stimulus payments due to a change in the Senate version of the bill. Mr. Biden and moderate Democratic senators struck a deal limiting the number of households eligible for the $ 1,400 checks. The revised limits would make millions of Americans ineligible for the payment.
The Senate bill regulates direct payments of $ 1,400 to individuals earning up to $ 75,000, but scraps eligibility for singles earning more than $ 80,000. For couples filing a joint federal income tax return, the phase-out starts with those making $ 150,000 and ends at $ 160,000.
“I wanted to keep the income threshold at the previous levels” – $ 75,000 for singles and $ 150,000 for couples – Oregon Senator Ron Wyden said in a pre-vote phone call to reporters on Wednesday. “And it worked.”
He added, “I would have preferred what we had before, but I don’t want to distract people from the fundamental performance” to keep the $ 75,000 and $ 150,000 income thresholds.
Transition before March 14?
Democrats want the bill to be signed into law by March 14, when the current additional $ 300 in weekly unemployment support ends. The Senate bill extends the $ 300 increase through September, unlike the House bill that would increase the increase to $ 400 per week through August.
In addition to the $ 1,400 checks, the bill would provide funding for small businesses, schools, and cities and states; offer families with children a tax advantage; and increase government spending on COVID-19 testing and contact tracing.
IRS timeline
If the bill is legally signed before March 12, the Friday before additional unemployed aid expires, incentive checks could hit bank accounts anywhere from a few days to a week after, based on the IRS’s time frame for dividing the second round of incentive checks in December .
Earlier this month, the IRS said it is looking at the redemption law to prepare for the next round of payments to be split. “We’re keeping our eyes on the hill,” said Ken Corbin, the chief taxpayer experience officer at the IRS, though he had not predicted when the IRS might distribute the checks.
The IRS relies on a taxpayer’s most recent tax return to determine how much they should receive and when they might receive it. That is why some tax experts urge the taxpayer submit their declarations as soon as possibleespecially if they have had a major change in their lives, such as the birth of a child or the loss of a job or income last year.
Because the IRS has officially started accepting tax returns on Feb. 12, and the filing window will close on the usual April 15 date, the law can be signed during the middle of the tax filing season.
If a taxpayer doesn’t file their 2020 tax return before the law is signed, the agency will likely rely on their 2019 tax return to calculate the incentive check payment – and that 2019 return may not reflect income losses during last year’s economic crisis. year. or a new child for example. In that case, a taxpayer may not receive as much incentive money as he is entitled to.
Income limits
A person’s income is the main determinant of whether or not a check is received, as is the amount of payment.
The payments would be $ 1,400 for a single or $ 2,800 for a married couple filing jointly. Only individuals making up to $ 75,000 would get the full payout, as would married couples with incomes up to $ 150,000. Payments would fall for incomes above those thresholds.
The Senate bill cuts single people with incomes over $ 80,000 and married couples making more than $ 160,000. At the first stimulus check, the cut-offs were higher at $ 100,000 for individuals and $ 200,000 for married couples.
Some lawmakers have argued that controls should target lower-income families, citing research showing higher-income families are recovering from the economic impact of the pandemic. But other research points to widespread financial pain across the country, with the ranking of adults experiencing financial difficulties last month having changed little since December, according to Morning Consult economist John Leer.
A third round of $ 1,400 checks would allow nearly 23 million adults to pay for their expenses for more than four months without incurring more debt or eating their savings, his analysis found.
“That third stimulus check is absolutely essential,” Colleen McCreary, Credit Karma’s Chief People Officer, told CBS MoneyWatch. “I don’t see a world where people will have their financial base without some extra stimulus money.”