Second coronavirus stimulus check under consideration: How did first $1,200 payment affect economy?

Treasury and IRS begin delivering second round of Economic Impact Payments to millions of Americans

Second coronavirus stimulus check under consideration: How did first $1,200 payment affect economy?

IR-2020-280, December 29, 2020

WASHINGTON — Today, the Internal Revenue Service and the Treasury Department will begin delivering a second round of Economic Impact Payments as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 to millions of Americans who received the first round of payments earlier this year.

The initial direct deposit payments may begin arriving as early as tonight for some and will continue into next week. Paper checks will begin to be mailed tomorrow, Wednesday, December 30.

The IRS emphasizes that there is no action required by eligible individuals to receive this second payment.

Some Americans may see the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of January 4, 2021.

 The IRS reminds taxpayers that the payments are automatic, and they should not contact their financial institutions or the IRS with payment timing questions.

As with the first round of payments under the CARES Act, most recipients will receive these payments by direct deposit. For Social Security and other beneficiaries who received the first round of payments via Direct Express, they will receive this second payment the same way.

Anyone who received the first round of payments earlier this year but doesn’t receive a payment via direct deposit will generally receive a check or, in some instances, a debit card.

 For those in this category, the payments will conclude in January.

If additional legislation is enacted to provide for an additional amount, the Economic Impact Payments that have been issued will be topped up as quickly as possible.

Eligible individuals who did not receive an Economic Impact Payment this year – either the first or the second payment – will be able to claim it when they file their 2020 taxes in 2021.

The IRS urges taxpayers who didn’t receive a payment this year to review the eligibility criteria when they file their 2020 taxes; many people, including recent college graduates, may be eligible to claim it.

People will see the Economic Impact Payments (EIP) referred to as the Recovery Rebate Credit (RRC) on Form 1040 or Form 1040-SR since the EIPs are an advance payment of the RRC.

“Throughout this challenging year, the IRS has worked around the clock to provide Economic Impact Payments and critical taxpayer services to the American people,” said IRS Commissioner Chuck Rettig.

“We are working swiftly to distribute this second round of payments as quickly as possible. This work continues throughout the holidays and into the new year as we prepare for the upcoming filing season. We urge everyone to visit IRS.

gov in the coming days for the latest information on these payments and for important information and assistance with filing their 2021 taxes.”

Authorized by the newly enacted COVID-relief legislation, the second round of payments, or “EIP 2,” is generally $600 for singles and $1,200 for married couples filing a joint return. In addition, those with qualifying children will also receive $600 for each qualifying child. Dependents who are 17 and older are not eligible for the child payment.

Payments are automatic for eligible taxpayers

Payments are automatic for eligible taxpayers who filed a 2019 tax return, those who receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits as well as Supplemental Security Income (SSI) and Veterans Affairs beneficiaries who didn’t file a tax return. Payments are also automatic for anyone who successfully registered for the first payment online at IRS.gov using the agency’s Non-Filers tool by November 21, 2020 or who submitted a simplified tax return that has been processed by the IRS.

Who is eligible for the second Economic Impact Payment?

Generally, U.S. citizens and resident aliens who are not eligible to be claimed as a dependent on someone else’s income tax return are eligible for this second payment.

  Eligible individuals will automatically receive an Economic Impact Payment of up to $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child.

  Generally, if you have adjusted gross income for 2019 up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses, you will receive the full amount of the second payment. For filers with income above those amounts, the payment amount is reduced. 

How do I find out if the IRS is sending me a payment?

People can check the status of both their first and second payments by using the Get My Payment tool, available in English and Spanish only on IRS.gov. The tool is being updated with new information, and the IRS anticipates the tool will be available again in a few days for taxpayers.

How will the IRS know where to send my payment? What if I changed bank accounts?

The IRS will use the data already in our systems to send the new payments. Taxpayers with direct deposit information on file will receive the payment that way.

For those without current direct deposit information on file, they will receive the payment as a check or debit card in the mail. For those eligible but who don’t receive the payment for any reason, it can be claimed by filing a 2020 tax return in 2021.

Remember, the Economic Impact Payments are an advance payment of what will be called the Recovery Rebate Credit on the 2020 Form 1040 or Form 1040-SR.

Will people receive a paper check or a debit card?

For those who don’t receive a direct deposit by early January, they should watch their mail for either a paper check or a debit card.

To speed delivery of the payments to reach as many people as soon as possible, the Bureau of the Fiscal Service, part of the Treasury Department, will be sending a limited number of payments out by debit card.

Please note that the form of payment for the second mailed EIP may be different than for the first mailed EIP. Some people who received a paper check last time might receive a debit card this time, and some people who received a debit card last time may receive a paper check.

IRS and Treasury urge eligible people who don’t receive a direct deposit to watch their mail carefully during this period for a check or an Economic Impact Payment card, which is sponsored by the Treasury Department’s Bureau of the Fiscal Service and is issued by Treasury’s financial agent, MetaBank®, N.A.

The Economic Impact Payment Card will be sent in a white envelope that prominently displays the U.S. Department of the Treasury seal. It has the Visa name on the front of the Card and the issuing bank, MetaBank®, N.A. on the back of the card. Information included with the card will explain that this is your Economic Impact Payment.

More information about these cards is available at EIPcard.com.

Are more people eligible now for a payment than before?

Under the earlier CARES Act, joint returns of couples where only one member of the couple had a Social Security number were generally ineligible for a payment – unless they were a member of the military. But this month’s new law changes and expands that provision, and more people are now eligible.

 In this situation, these families will now be eligible to receive payments for the taxpayers and qualifying children of the family who have work-eligible SSNs. People in this group who don’t receive an Economic Impact Payment can claim this when they file their 2020 taxes under the Recovery Rebate Credit.

 

Is any action needed by Social Security beneficiaries, railroad retirees and those receiving veterans’ benefits who are not typically required to file a tax return?

Most Social Security retirement and disability beneficiaries, railroad retirees and those receiving veterans’ benefits do not need take any action to receive a payment.

Earlier this year, the IRS worked directly with the relevant federal agencies to obtain the information needed to send out the new payments the same way benefits for this group are normally paid.

For eligible people in this group who didn’t receive a payment for any reason, they can file a 2020 tax return.

I didn’t file a tax return and didn’t register with the IRS.gov non-filers tool. Am I eligible for a payment?

Yes, if you meet the eligibility requirement. While you won’t receive an automatic payment now, you can still claim the equivalent Recovery Rebate Credit when you file your 2020 federal income tax return.

Will I receive anything for my tax records showing I received a second Economic Impact Payment?

Yes. People will receive an IRS notice, or letter, after they receive a payment telling them the amount of their payment. They should keep this for their tax records.

Where can I get more information?

For more information about Economic Impact Payments and the 2020 Recovery Rebate, key information will be posted on IRS.gov/eip. Later this week, you may check the status of your payment at IRS.gov/getmypayment. For other COVID-19-related tax relief, visit IRS.gov/coronavirus.
 

Источник: https://www.irs.gov/newsroom/treasury-and-irs-begin-delivering-second-round-of-economic-impact-payments-to-millions-of-americans

Hopes dimming for another round of stimulus checks in 2020

Second coronavirus stimulus check under consideration: How did first $1,200 payment affect economy?

Time is running out for the U.S. government to approve a second coronavirus relief package. So where does that leave Americans anxiously awaiting a second federal stimulus check — the cash payments that were distributed earlier this year? As lawmakers are negotiating a scaled-down deal, the popular stimulus checks aren't ly to be part of another round of aid.

Lawmakers could still pass a stimulus bill before the Senate adjourns for its holiday recess on December 18, but even the most generous of the two proposals under consideration would fall far short of the $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act that was signed into law in March and which provided $1,200 checks to most Americans. 

Even with some form of economic stimulus by year-end, experts say those $1,200 checks are unly to recur — at least until after a new session of Congress begins in early January.

The two new stimulus proposals — one from a bipartisan group of lawmakers and a less-generous plan from Senate Majority Leader Mitch McConnell — don't include funding for more direct payments to Americans, though they would provide money for unemployment aid and other support.

Given ongoing negotiations, Wall Street analysts say they believe there's a higher lihood of a deal this month, with Heights Securities now pegging its chance at 75%, up from 50% before this latest round of talks. However, their analysis finds it “unly” that $1,200 checks will be included in the next package.

Instead, the next round will ly focus on extending unemployment benefits, which will otherwise expire for 12 million jobless workers on December 26, and on providing aid to businesses through the Paycheck Protection Program, Heights Securities said.

Some lawmakers are urging for the inclusion of another round of $1,200 checks, such as Senator Bernie Sanders of Vermont, an independent. Sanders said he wouldn't support the stimulus package unless it were “significantly improved.”

The bipartisan proposal should “provide, at the very least, a $1,200 direct payment to working class Americans and $500 for their kids,” Sanders said December 4. “Tens of millions of Americans living in desperation today would receive absolutely no financial help from this proposal.”

Dueling plans

The first plan comes from a bipartisan group of lawmakers who are proposing more than $900 billion in stimulus spending.

Democratic Senator Joe Manchin of West Virginia last week tweeted that the group would direct $288 billion to refresh the Paycheck Protection Program for small businesses and $180 billion in unemployment aid.

However, the bill doesn't include funding for another round of stimulus checks.

Today I'm announcing a bipartisan, bicameral framework for a COVID-19 relief package. This proposal would direct more than $900B to help small biz, healthcare providers, & unemployed Americans who need help now. It’s time to put politics aside & do what’s best for our country. pic..com/XkTGvWNdrw

— Senator Joe Manchin (@Sen_JoeManchin) December 1, 2020

Sen. Dick Durbin of Illinois, the second-ranking Democrat, indicated that excluding the checks, while assuring the inclusion of small-business aid and renters' assistance, was the only way to reach an agreement with Republicans who are putting firm limits on the bill's final price tag.

“The $1,200 check, it cost, we believe, nationally $300 billion to give you an idea,” he said. “The Democrats have always wanted a larger number, but we were told we couldn't get anything through the Republicans, except this $900 billion level.”

The second plan comes from Senate Majority Leader Mitch McConnell, who last week said there is “no reason” why another stimulus package shouldn't be passed.

Last Tuesday, McConnell unveiled a proposal for a “targeted relief package,” which is far less comprehensive than the bipartisan effort from Manchin and other lawmakers.

It would direct about $330 billion toward a one-month extension of two unemployment programs that expire on December 26, the Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation programs, as well as provide aid for the Paycheck Protection Program.

Republicans have spent months proposing more COVID relief. Yesterday I put forward yet another proposal that would invest many billions in workers, laid-off Americans, small businesses, & vaccine distribution.

I hope Democrats will finally let us get a bipartisan outcome soon.

— Leader McConnell (@senatemajldr) December 2, 2020

McConnell's proposal also would provide liability limitations for coronavirus-related lawsuits against businesses. But it also doesn't include another round of $1,200 checks. McConnell said he believes his proposal has the best chance of getting President Donald Trump's signature, adding, “We just don't have time to waste time.” 

Speaker Nancy Pelosi told reporters at her weekly press conference on December 4 that she would to attach new coronavirus relief legislation to a government funding omnibus, which must pass within the next week. She and Senate Minority Leader Chuck Schumer have voiced support for the $900 billion bipartisan proposal. 

Maintaining distance on key issues

Democrats and Republicans have remained far apart on several key issues, such as providing hundreds of billions in funding for states and cities that have been hit by declining tax revenues amid the coronavirus pandemic and are facing the hard prospect of mass layoffs of local government workers.

“A sentiment that appears to have grown over the weekend as new signs of bipartisan negotiations emerged among rank-and-file Senators,” Height Securities analysts wrote in a recent report. “We caution that there is no expectation for a vote on this bill, but it is a sign that Senators are at least trying to see what is possible.”

Even if Congress passes an aid bill that includes stimulus check funding, it could take weeks for the IRS to electronically deposit the funds into people's bank accounts, much less mail out millions of paper checks. It took between one and three months for most Americans to get their so-called Economic Impact Payment after the bill was signed into law this spring. 

Biden to push for stimulus amid COVID surge 14:15

Without a new stimulus bill by year-end, many households and businesses would be left hanging, with millions set to lose their unemployment benefits by year-end and nationwide eviction moratoriums lapsing in the new year. The number of Americans applying for jobless aid rose for the second week in a row in November, a sign that the economic recovery is losing speed.

Millions of Americans are “heading for a bleak winter as safety nets expire,” Nancy Vanden Houten, lead economist at Oxford Economics, said in a report. “We are pessimistic about the prospect of any significant near-term fiscal relief, and fear several social safety-net programs may be allowed to expire, affecting millions of households across the country.”

Rather than try to break the months-long impasse on stimulus funding, experts think Congress is more ly to focus on passing legislation to finance the federal government after December 11, averting a government shutdown.

Curious how much stimulus we really need? Read this excellent piece by @joshbivens_DC.

TL;DR: We need $2 trillion between now and the middle of '22, then continued support of $400 billion annually until the end of '24, then a slow phaseout after that. https://t.co/4ePnhaQcT3

— Heidi Shierholz (@hshierholz) November 24, 2020

Deutsche Bank economists Peter Hooper and Matthew Luzzetti think Congress could thrash out a slimmed-down stimulus package early next year. Janet Yellen, President-Elect Joe Biden's choice for Treasury secretary, would ly push for a speedy bill, the economists told investors as word of her pending nomination first circulated. 

Still, Yellen wouldn't be taking on the role until the Biden administration is ushered in on January 20, and would also require approval from a politically divided Senate.

And a spokesman for President-elect Joe Biden's transition team pushed back on a report that Mr.

Biden would support a quick relief bill even if it meant cutting back on some of the Democrat's priorities, such as aid for local governments, the congressional news source The Hill reported on November 23.

“The President-elect fully supports the Speaker and Leader in their negotiations,” transition spokesperson Andrew Bates said in a statement. 

What's holding up a bill?

House Democrats had passed an updated Health and Economic Recovery Omnibus and Emergency Solutions (HEROES) Act on October 1, but the $2.2 trillion bill ran into opposition from Republican lawmakers that has continued into December. 

Among the main disagreements: Whether the federal government should help cash-strapped cities and states weather the massive economic blow caused by the pandemic. The crisis could cause a $434 billion federal budget shortfall through 2022 under the most severe scenario, which would include a resurgence in the virus and a lack of more stimulus aid, according to Moody's Analytics.

Lawmakers resume coronavirus aid talks 09:09

The HEROES Act would have provided more than $400 billion in funding for state and local governments, but Republicans took issue with that aid, including President Donald Trump, who has objected to what he called “bailouts” for states helmed by Democrats. But the fact is many Republican-helmed states and cities are facing budget shortfalls as well, including Ohio and Texas, with the latter staring into a $4.6 billion budget hole. 

Democrats and Republicans also remain far apart on the issue of unemployment aid, with Democrats pushing for a renewal of the extra $600 in weekly pay provided under the CARES Act. Republicans have argued that enhanced jobless benefits are too generous and dissuade people from returning to work, despite a lack of economic data that supports the contention. 

Edge of a cliff

More certain is that millions of households face deepening financial problems, which are only ly to worsen once aid and protections from the CARES Act expire at the end of the year. 

About 6.7 million people could be evicted in the coming months as a federal eviction moratorium ends on December 31 according to a report from the National Low Income Housing Coalition and the University of Arizona. That would approach the number of people who lost their homes to foreclosure during the 2008 financial crisis and ensuing recession.

12 million Americans set to lose unemployment… 08:14

And almost 12 million jobless workers are slated to be cut off from unemployment aid the day after Christmas, according to an analysis by The Century Foundation, a progressive think tank. That cutoff would reduce total household income by about $19 billion per month, Oxford Economics said, potentially dragging down overall consumer spending as the economy is slowing.

More than 125 economists last month signed an open letter urging lawmakers to earmark for money for stimulus checks.

“Recurring direct payments will help families meet basic needs, boost state and local economies, and speed the recovery,” they wrote in the letter. “Cash reaches millions who are struggling economically, including those who don't qualify for unemployment benefits.”

—With reporting by The Associated Press.

Источник: https://www.cbsnews.com/news/second-stimulus-check-hopes-update-2020-12-08/

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