A second round of stimulus checks will soon hit the bank accounts of millions of Americans, thanks to the $ 900 billion economic aid package presented by Congress. passed Monday night. But there are some significant differences in this round, including the amount: $ 600 per person, half of the $ 1,200 that goes to most adults in the first round of stimulation checks.
A few days ago it was unclear whether the stimulus package would even include another round of direct payments. But last-minute negotiations paved the way for a second stimulus check, which consumer advocates say is desperately needed as millions of Americans continue to grapple with lost wages and jobs amid the deterioration. corona pandemic. The bill now goes to the White House to have the president’s signature become law.
Still, the $ 600 checks may not be enough to help families who have suffered income or job losses since the March pandemic shut down the economy and pushed up unemployment. Nearly 6 in 10 consumers say they suffered a financial blow from the pandemic in late November, according to a recent study from TransUnion, which also found that 40% of those households had counted on the prospect of another stimulus check to encourage them. help pay their bills.
“While the deal is months late and probably won’t meet what it takes to avoid a harsh winter, it’s better than nothing,” Gregory Daco, US chief economist at Oxford Economics, wrote in a 21-year-old research note. December. “It will help buffer the current economic slowdown and give the economy more momentum during the initial vaccine rollout phase.”
The stimulus checks could reach people’s bank accounts as early as next week, Treasury Secretary Steven Mnuchin said on CNBC Dec. 21.
However, one group of people will receive more money in the second round of incentive checks than the first: dependent children, who will receive the same $ 600 checks as adults, higher than the $ 500 checks children received through the Coronavirus. Security Act (or CARES Act) in the spring.
The $ 900 billion package “will support the economy through March,” analysts Raymond James said in a Dec. 20 research note.
Senate leader Chuck Schumer, a Democrat from New York, described the bill as “just a first step”.
“This is an emergency, we need a second bill to address the emergency and to boost our economy so that we get back to where we were and that will be job number one in Biden’s new government,” he said at 20 December.
This is what is known so far, based on the legislative text for the bill released by the House on December 21.
$ 600 for each adult
Singles who earn up to $ 75,000 will receive $ 600, while married couples who earn up to $ 150,000 will receive $ 1,200 – exactly half the amount paid out through the CARES Act earlier this year.
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. This is comparable to the CARES law, but compared to the previous bill, less higher-earning taxpayers are eligible for the checks under this formula.
The second incentive checks will be completely phased out for singles earning more than $ 87,000 or married couples earning more than $ 174,000 – compared to the phasing out of the CARES Act for singles earning more than $ 99,000 and couples earning more than $ 198,000 to earn.
To see how much you could receive, go to Omni Calculator’s second stimulus calculator for an estimate.
$ 600 for each dependent child
Aside from the smaller adult incentive checks, the other big change is the amount allotted for dependent children: $ 600 for each child, compared to $ 500 in the CARES Act.
However, the bill says the $ 600 will be spent on any dependent child under the age of 17, meaning adults who are nonetheless claimed as dependents – such as college students and older high school students – will not be eligible for the checks.
It also turns out that adult dependents, such as seniors who are classified as dependents according to their adult children’s tax returns, are not eligible for the checks. The exclusion of students and other adult dependents was a matter of debate during the first round of checks, with some families arguing that older dependents should also be eligible for the payments.
A family of two parents with two dependent children could receive up to $ 2,400, according to lawmakers.
Households with a “mixed status”
Couples with a immigrant without a green card would also qualify for the controls, a provision that goes back to the CARES law, the summary said.
This is important to many families because the first round of incentive checks only went to US citizens or immigrants with foreigner resident status, also known as a green card. Legal immigrants without a green card, as well as undocumented immigrants, were banned – and US citizens married to immigrants without a green card were banned, as were their children.
Refusing checks to US citizens because of their marital or parental relationship with an immigrant cause for litigation earlier this year about what plaintiffs claimed was an unconstitutional action.
But the latest stimulus package “has successfully pushed for a provision, backed by the CARES law, to extend these direct payments to mixed-status households, which is important to give immigrant families across the country access to these financials. support, “the summary said. .
How soon could you get a stimulus check?
Checks could end up in bank accounts starting early next week, Mnuchin told CNBC on Dec. 21.
“The good news is that this is a very, very quick way to get money into the economy. I want to emphasize, people will see this money early next week,” Mnuchin said.
That would mean a much faster rollout than the first round of checks, which started rolling into bank accounts in mid-April, or a few weeks after the CARES bill was signed into law. Many people did not receive their checks until May, June and even later in the year.
What about Social Security recipients?
A glitch in the first stimulus payments was one slower rollout for Social Security recipients, as well as supplemental security income recipients, Rail Retirement Board beneficiaries, and Veterans Administration beneficiaries. Because some of those recipients don’t file tax returns – which the IRS relied on to split the incentive payments – millions of them waited weeks or months to receive their checks.
But the new bill will ensure that those recipients automatically receive the $ 600 checks, said New Hampshire Senator Maggie Hassan, who was working on a bipartisan incentive bill that became the framework for the latest negotiations.
“I am delighted that the final text of the aid package includes my bipartisan bill to ensure recipients of Social Security, Supplemental Security Income, and certain VA benefits will automatically receive these payments,” Hassan said in an email to CBS MoneyWatch .
That means millions of Social Security, SSI, VA and railroad retirement benefits are not at risk of missing out on the payments, she added.
Additional Stimulus Benefits:
$ 300 per week in additional unemployment benefits
Aside from the $ 600 incentive checks, the incentive bill also includes an additional $ 300 per week in unemployment support. That means that unemployed workers will receive their regular unemployment benefits, plus $ 300 on top, through March 14, 2021.
The Pandemic Unemployment Assistance (PUA) program, which covers handymen and the self-employed, will also be renewed, as will the Pandemic Emergency Unemployment Compensation (PEUC) program, which provides additional weeks of unemployed assistance to those who are out of work. their regular unemployment benefits.
PPP Small Business Loans
The Paycheck Protection Program will be expanded with an additional $ 284 billion in forgiven loans. Some of the funding will be earmarked for very small businesses through lenders such as Minority Depository Institutions, after criticism that the first round of PPP lending overlooked many minority and women’s businesses.
The PPP program will also increase suitability for nonprofits and local newspapers, TV and radio broadcasters, the summary said.
Another $ 20 billion in loans for economic disaster damage will be earmarked for businesses in low-income communities, while $ 15 billion will be spent on live venues, independent movie theaters and cultural institutions forced to cut back or shut down their operations. close because of the pandemic.