The Covid-19 pandemic put millions out of work in just a matter of week, an economic upheaval that the country has not seen since the Great Depression of 1929. As an answer to the economic hardship that many Americans faced, the president and Congress approved a bill that would distribute funds to individuals, families and businesses. The stimulus checks, meant to keep the economy going in the wake of mass unemployment, were delivered to most taxpayers in mid-April. With talks of a second stimulus check on the horizon, many are reporting that they never received the first one and are seeking answers.
The CARES ACT, passed by Congress, provided a one-time payment of $1,200 per individual taxpayer, and an additional $500 per child to most Americans. Married couples who earned less than $100,000 a year also received a payment of $2,000 per couple. The funds, meant to stimulate the economy, were mailed and sent by direct deposit to anyone who filed taxes in 2019.Read More »
Here is what is being discussed so far:
-Only taxpayers with a maximum earnings of $40,000 would qualify
-A $2,000 a month payment until the end of the pandemic
-Additional support for senior citizens who typically don’t file income taxes but receive Social Security benefits
-A $4,000 travel credit, and up to $8,000 per family to be used for airlines, hotels, resorts and dining out
-A payroll tax cut which would allow workers to see more take home pay
-Tax breaks for businesses to encourage them to hire more workers
-The second stimulus check would be more than the previous amount of $1,200, but no specific amount has been announced as of this writing
-The payments would likely go out in late-August to early September, depending on how quickly lawmakers and the president act to get the money out
-Senate Majority Leader Mitch McConnell said that the second round of stimulus payments would be focused on those with no employment and those in the hospitality sector, which has been especially hard hit
-Direct payments to individuals monthly to stimulate consumer spending
-The next round of stimulus checks would include college students, parents of taxpayers and non-citizens who file returns and pay taxes but do not have a social security number
-Some have suggested that the second stimulus package will include credits for travel and dining out
Who may be excluded from a second stimulus check:
-Young people between the ages of 18-24
-People who are incarcerated
-Married couples with an Adjusted Gross Income (AGI) of more than $198,000
-Individual filers who earn more than $99,000 annually
When will a decision be made on the next round of stimulus checks? Nobody is quite sure, but Treasury Secretary Steve Mnuchin has told several news outlets that the Senate Republicans and Democrats will come together after the Senate’s summer break to decide on what exactly to include in the second package. The Senate returns from their break on Monday, July 20 and starts another break at the beginning of August which runs until September. The plan is that they will complete their talks and have mechanisms in the works by the end of July, 2020. Mnuchin has said that they will not work through the break.
What About Those Who Never Received the First Stimulus Check?
While a second stimulus check would provide relief to many, there are still a number of taxpayers who never received the first one, sent back in April. There are several reasons why this may be the case.
-As of June 3, the IRS has sent out 159 million checks, but there are still some waiting to be sent out. There is a backlog of checks that need to clear, and yours could be one of the ones that has not yet been sent. The IRS is sending out those to people with the lowest incomes first, and it estimates that it could be several more weeks before everyone sees their money.
-The IRS may have started creating a check for you prior to your submitting your direct deposit information. If this is the case, continue to check your mailbox for a paper check. These payments take a little longer—between 14 and 21 days to arrive.
-Your banking information is outdated. If you have changed banks since your 2019 tax filing, the IRS may have the wrong information on file for you. In other cases, your tax preparer may have set up a prepaid debit card account for you to receive your tax refund. If this applies to you, the payment will be rejected by your bank and sent back. You will then receive a paper check in the mail. This can take up to a few weeks, causing you to be delayed in getting your funds.
-Your dependent child is not eligible to be included in your payment eligibility. If you did not claim a dependent child on your taxes in 2019, you will not be given the additional $500 child credit. If your dependent child was eligible on last year’s filing date, but is not eligible this year (as in the case of college students), this could cause a delay in processing.
-You owe child support. If you are behind in your child support payments, your stimulus check could be reduced by the amount you owe. If you owe more than $1,200, the entire amount will be withheld and paid to the other parent.
-You are a non-filer. If you earn a low income and were not required to file taxes in 2019, the IRS likely does not have your information on file. If this is the case, head over to the IRS website and fill out the non-filer’s form. Include your banking information for faster processing.
If the IRS does not have your information, simply visit their website for more information on how you can provide your banking details, updated address and information about your household. If you have recently paid off your back child support, it may take a little longer to receive your stimulus check, so be patient.
If you were not eligible to receive the stimulus payment the first time, you may be included in the next round of payments.
The novel Coronavirus sent the economy into a tailspin, shuttering businesses and leaving millions of people out of work overnight. A situation like this is unprecedented in recent history, and lawmakers and the president are scrambling to find a way to keep Americans alive with their finances intact during this crisis. Stimulus payments are billed as a way to keep people in their homes, protect them from eviction and keep the economy from completely collapsing. The stimulus is also designed to help struggling businesses keep their doors open. Here’s hoping we get what we need to stay afloat during this unforseen worldwide crisis.
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