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The second round of federal stimulus checks are now hitting bank accounts after President Donald Trump signed the $ 900 billion stimulus bill last week. Last minute pass relief legislation will offer a slight boost to the 60% of Americans who have suffered financial hardship as a result of the coronavirus pandemic, but millions may be disappointed to find out that they are among the groups that are not eligible for payment.
Checks will be amount to $ 600 for each eligible adult and child – half the amount of checks for $ 1,200 sent out earlier this year. The 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 raise so-called economic impact payments to $ 2,000 per adult stalled after Senate Majority Leader Mitch McConnell in December. blocked an attempt to vote on the matter. Wall Street analysts say the push has only a slim chance of going forward, noting the additional hundreds of billions of dollars that a larger payment would cost.
In drafting the latest stimulus bill, lawmakers sought to correct several issues that limited the payment of the first set of checks earlier this year. For example, checks will be distributed to “mixed” immigrant families – families where US citizens are married to immigrants without a green card – a group that was blocked from receiving the checks earlier this year. Children under 17 will also receive the same payment of $ 600 as adults, up from $ 500 in the first round.
“Children will be entitled to the same amount of benefit as eligible adults, and families with members of mixed immigration status with a valid Social Security number for a spouse are also eligible for payments, unlike reimbursements under the CARES Act. “noted the Tax Foundation.
However, the income limits in the latest stimulus package are slightly different from those set out in the CARES (Aid, Relief and Economic Security against Coronavirus) law, which will prevent more middle-class families from receiving aid. And there are a few groups that were overlooked in the first round of checks and will miss a second check as well.
Main among them: dependent children aged 17 and adults who are declared dependents on another person’s income tax return, as is generally the case for students.
On December 29, the IRS said its “Get My Payment” website would be up and running “in a few days”, allowing consumers to check the status of their payments and update their bank account information. But on the morning of January 4, the site was still down.
Here are the groups of people who will not receive a check for $ 600 in the second round.
Dependent children aged 17
The $ 900 billion stimulus package directs $ 600 to every 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 “eligible children” as those who have not yet reached their 17th birthday.
In other words, the $ 600 will be for children 16 and under.
The IRS will use people’s 2019 tax returns to determine their stimulus payments, meaning teens who turned 17th birthday in the second half of 2020 – after tax returns were due to the IRS – could still be eligible.
Adult dependents, from students to seniors
No dependent adult will be eligible for checks for $ 600, according to the Tax Foundation.
This means that most students, who are generally considered dependents by their parents, will not be eligible for checks. This shocked some students, who expressed their frustration on social media. Many are grappling with a range of issues in the pandemic, from food insecurity to loss of income from campus jobs that have been cut due to COVID-19 restrictions.
Elderly people, from the elderly to people with disabilities, who are considered dependents are also excluded, an issue some on social media have called “slap in the face.”
Adults with disabilities and older people who are declared dependents often face higher costs due to issues such as higher medical bills.
Singles earning over $ 87,000
The second set of checks will feature the same type of income phase-out as in the CARES Act, with stimulus check payments reduced for earnings over $ 75,000 per single person or $ 150,000 per married couple.
The payment amount individuals will receive will be reduced by $ 5 for every $ 100 of income earned above these thresholds, according to the House appropriations committee.
But this formula, when combined with the smaller check amount of $ 600, means the income threshold for receiving the money will be lower: Singles earning over $ 87,000 will not qualify – compared to the phase-out threshold of $ 99,000 for single filers under the CARES Act.
Married couples earning over $ 174,000
For a similar reason, married couples will face a lower income threshold to receive checks for $ 600. Couples earning over $ 174,000 will not receive a payment, compared to $ 198,000 in the CARES Act.
Overall, almost everyone in the bottom 80% of the income distribution in the United States will receive a check, according to the Tax Foundation’s estimate. The share of tax filers who will receive a check decreases for people whose income puts them in the richest 20%, with very few taxpayers in the top 5%, the Tax Foundation estimated.
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