what we know of when they might arrive
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As Congress scrambles to hammer out a deal for a new coronavirus relief bill, it could mean new stimulus checks for millions of Americans.
New direct payments of $1,400 are part of the aid that should be included in the package. The proposal also includes other measures to help Americans through the ongoing pandemic, such as more improved 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 married couple, plus $1,400 for dependent children and adults.
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Payments would be based on the same income thresholds as the first two checks. Individuals with up to $75,000 in adjusted gross income, heads of households up to $112,500, and married couples who jointly deposit up to $150,000 would receive full payouts.
But checks would be phased out for those with incomes above those levels. This time they would be capped for individuals earning $100,000, heads of households with $150,000 and married couples with $200,000.
The coronavirus stimulus package is making its way through the House and Senate as part of fiscal reconciliation. This process will prevent large changes to the plan, although the final numbers may change.
Some lawmakers have pushed to lower the income roll-offs to $50,000 or $60,000 to better target those who need the money.
“These details are not yet final and may be subject to further fine-tuning,” Ed Mills, Washington policy analyst at Raymond James wrote last week, “but so far they have only received little pushback from moderate Democrats who sought a greater degree of targeting for higher-income payment recipients.”
Schedule of potential payments of $1,400
The legislation is expected to become final around early or mid-March.
At this point, the IRS will be in the midst of tax-filing season, which could make it more difficult for the tax agency to process incoming payments and returns, said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center. .
Last year, the first stimulus checks of $1,200 were also authorized during tax season. Ultimately, the deadline for filing tax returns was extended from April 15 to July 15.
Yet the IRS was able to get the bulk of those $1,200 payments within months.
“They’ve done an incredible job, much better than we ever imagined, in securing this first round of economic impact payments in particular,” Gleckman said.
This time, Democrats have proposed that the checks be based on 2019 or 2020 returns.
That could create an incentive to deposit early, especially if your earnings have dropped in 2020, which could increase the size of your check, Gleckman said.
If instead the IRS uses your 2019 information and you are entitled to more money based on your 2020 earnings, you may have to wait a full year until the next tax filing season. income to get the rest of what’s owed to you, he said.
Alternatively, if your income was lower in 2019 than in 2020, you could get a bigger check if the IRS uses last year’s deposit.
As with the first two stimulus checks, the bulk of payments will likely be sent by direct deposit to those who already have their banking information on file with the IRS. Based on past checks, that money could start rolling in within days of the legislation being finalized.
The rest of the direct payments will be mailed as debit cards or checks. These payments can take several weeks to arrive.
“The good news is there’s a bit more infrastructure and a more formalized process to do it than this time last year because they’ve gone through it twice,” said Garrett Watson, senior policy analyst at the Tax Foundation.
A wildcard that could affect the IRS’ workload is a proposal to expand the child tax credit. If passed with the current relief bill, the IRS can send eligible families monthly payments of up to $300 per child.
On Tuesday, the IRS said it had sent all “legally permitted” first and second stimulus checks and is now focused on tax filing season.
The tax agency sent out more than 160 million $1,200 stimulus checks totaling more than $270 billion. It has also sent over 147 million direct payments of $600 totaling over $142 billion.