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As Congress works on a deal for a new coronavirus control bill, that could mean new stimulus checks for millions of Americans.
New $ 1,400 direct payments are among the support expected to be included in the package. The proposal also includes other measures to help Americans get through the ongoing pandemic, such as more increased federal unemployment benefits and raising the federal minimum wage to $ 15 an hour.
Currently, the terms call for direct payments of $ 1,400 per person, or $ 2,800 per couple, plus $ 1,400 for both children and adults.
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Payments would be based on the same income thresholds as the first two checks. Individuals with adjusted gross income up to $ 75,000, heads of household up to $ 112,500, and married couples filing together for up to $ 150,000 would receive full payments.
But controls would be phased out for people with incomes above that level. This time, they would be capped for individuals making $ 100,000, householders with $ 150,000, and married couples with $ 200,000.
The stimulus package for the coronavirus is making its way through the House of Representatives and the Senate under budget reconciliation. That process prevents major changes to the plan, although the final figures may change.
Some lawmakers have pushed for the income phase outs to be lowered to $ 50,000 or $ 60,000 to better target those who need the money.
“These details are not yet final and could be further adjusted,” Washington policy analyst Ed Mills wrote with Raymond James last week, “but so far moderate Democrats have received little resistance from moderate Democrats who have been more focused on higher incomes. . “
Future payment term of $ 1,400
The legislation is expected to become final around early to mid-March.
At the time, the IRS is deep in tax reporting season, which could make it more challenging for the tax authorities to process both payments and incoming returns, said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center.
Last year, the first $ 1,200 incentive checks were also authorized during tax season. Ultimately, the tax filing deadline was extended to July 15 from April 15.
Still, the IRS was able to pay out most of those $ 1,200 payments within a few months.
“They’ve done a great job, much better than we could have ever imagined, especially that first round of payments for economic impact,” said Gleckman.
This time, the Democrats have suggested basing the checks on returns from 2019 or 2020.
That could provide an incentive to file early, especially if your income fell in 2020, which could make your check bigger, Gleckman said.
If instead the IRS uses your 2019 information and you qualify for more money based on your 2020 income, you may have to wait a full year until the next tax filing season to get the rest of what you owe, said he.
If your income was lower in 2019 than it was in 2020, you can get a bigger control if the IRS uses last year’s filing.
As with the first two stimulus checks, most of the payments will likely be sent via direct deposit to those who have already registered their bank details with the IRS. Based on previous checks, that money can arrive within days of the legislation being finalized.
The rest of the direct payments are sent by post, either as a debit card or a check. It can take several weeks for these payments to arrive.
“The good news is there’s a little more infrastructure and a more formalized process to do this than last year this time, because they’ve been through it twice,” said Garrett Watson, senior policy analyst at the Tax Foundation.
One wildcard that could affect the IRS’s workload is a proposal to extend the child discount. If that’s passed along with the current waiver bill, the IRS can send families eligible for monthly payments of up to $ 300 per child.
On Tuesday, the IRS said it had sent all “legally permissible” first and second incentive checks and is now targeting the tax return season.
The tax authorities sent more than $ 160 million $ 1,200 incentive checks totaling more than $ 270 billion. It also sent more than $ 147 million in direct payments totaling more than $ 142 billion.