The second round of federal incentive checks is now reaching bank accounts after President Donald Trump signed the $ 900 billion stimulus bill last week. Last minute passage of the aid legislation will provide a modest increase for 60% of Americans who have suffered financial problems due to the coronavirus pandemic, but millions may be disappointed to find that they are among the groups that do not qualify for payment.
Checks will be amounts to $ 600 for each eligible adult and child – half the value of the $ 1,200 checks sent earlier this year. Payments of $ 600 per person are part of the stimulus bill passed by Congress in December and signed by Mr. Trump on the evening of December 27.
Efforts by Mr. Trump and Democratic leaders to increase so-called economic impact payments to $ 2,000 per adult have stopped after Senate Majority Leader Mitch McConnell in December blocked an attempt to vote on the issue. Wall Street analysts say the push has little chance of moving forward, noting the additional hundreds of billions of dollars it would cost to pay higher.
In drafting the latest stimulus bill, lawmakers tried to address several issues that restricted the payment of the first round of checks earlier this year. For example, checks will be distributed to families of “mixed status” immigrants – families in which American citizens are married to immigrants without green cards – a group that could not receive checks earlier this year. Children under 17 will also receive the same $ 600 payment as adults, compared to $ 500 in the first round.
“Children will be eligible for the same benefit amount as eligible adults, and families with members with mixed immigration status, with a valid social security number for a spouse, are also eligible for payments, as opposed to rebates in CARES Law ”, mentioned the Tax Foundation. .
However, the income limits in the latest stimulus package are slightly different from those stipulated in the Coronavirus Aid, Aid and Economic Security (CARES) Act, which will eliminate more middle-class families from receiving aid. And there are a few groups that were overlooked in the first round of controls, which will lose a second control.
The main one: 17-year-old dependent children and adults who are claimed to be dependent on another person’s tax return, as is usually the case with students.
The IRS said on December 29 that its “Get My Payment” website will be up and running “in a few days,” allowing consumers to check their payment status and update their bank account information. But as of the morning of January 4, the site was still closed.
Below are the groups of people who will not receive a $ 600 check in the second round.
Dependent children who are 17 years old
The $ 900 billion incentive package directs $ 600 to each 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 “qualified children” as those under the age of 17.
In other words, the $ 600 will go to children 16 years of age or younger.
The IRS will use people’s tax returns for 2019 to determine incentive payments, which means that teens who turned 17 in the second half of 2020 – after the tax returns were due to the IRS – could still be Calif.
Dependent adults, from students to seniors
No dependent adult will qualify for the $ 600 check, according to the Tax Foundation.
This means that most students, who are usually claimed as dependent parents, will not qualify for checks. This angered some students, who expressed their frustration on social networks. Many are struggling with a number of issues in the pandemic, from food insecurity to the loss of campus jobs, which have been reduced due to COVID-19 restrictions.
Older adults, from the elderly to people with disabilities, who are claimed to be addicted, are also excluded, a problem that some on social networks have called “a slap”.
Adults and the elderly with disabilities who are claimed to be dependent often face higher costs due to issues such as higher medical expenses.
Single people earning over $ 87,000
The second round of checks will have the same type of income elimination as under the CARES Act, with reduced incentive check payments for earnings over $ 75,000 per single person or $ 150,000 per married couple.
The amount of payment that individuals receive will be reduced by $ 5 for every $ 100 of income earned above these thresholds, according to the Home Loans Committee.
But this formula, when combined with the lower $ 600 check amount, means that the income threshold for receiving money will be lower: single people earning more than $ 87,000 will not qualify – compared to the phasing-out threshold. of $ 99,000 CARES Act.
Married couples earn over $ 174,000
For a similar reason, married couples will face a lower income threshold for receiving $ 600 checks. Any couple earning more than $ 174,000 will not receive a payment, down from $ 198,000 in the CARES Act.
Overall, almost everyone in 80% of US income distribution will receive a check, according to the Tax Foundation estimates. The share of applicants who will receive a check decreases for people whose income places them in the first 20% of employees, with very few taxpayers in the first 5% who qualify, the Tax Foundation estimated.