New stimulus check: All the essential facts to know about payment size, qualifications and more

Congress continues to negotiate all the details of another coronavirus relief package — and the second stimulus payment that may possible include it. Progress has been regular however gradual, and we nonetheless do not know precisely what a ultimate invoice would appear like. Which means the whole lot from who would be eligible for a second stimulus check to when it could arrive to all the opposite ins and outs are nonetheless up within the air, because the 2020 presidential election quick approaches. 

We could not know precisely if or how another stimulus bill will come together, however we will provide some big-picture details about stimulus checks, together with whether or not you may be among the many first or final to obtain a second test if one’s authorized, and how the IRS calculates the amount of stimulus money you’d get. 

This is the foremost data we all know proper now about stimulus checks, together with how your taxes affect your payment and the role your children and dependents play, too. We replace this story recurrently.

1. Stimulus negotiations have gotten extra pressing by the day

Stress is mounting for Congress to cross one other stimulus aid invoice that brings extra rapid help to eligible Individuals: The Nov. 3 election is just over two weeks away, new unemployment numbers are on the rise, there are more than 8 million known coronavirus cases in the US and millions of people are living in poverty throughout the coronavirus pandemic. Even supposing each political events assist sending a second stimulus test, negotiations have been arduous. 

On Oct. 9, the White Home ready a $1.8 trillion stimulus offer, which incorporates one other payment of up to $1,200 for individuals, together with a change in how a lot individuals might get for dependents (extra on that beneath). Since then, Home Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have spoken each day, they usually say they’re making progress on language, funding and other details within the invoice. In the meantime, President Donald Trump has urged Congress to “go larger” than the $1.8 trillion bundle. However Senate Majority Chief Mitch McConnell has pushed again. 

“He is speaking a few a lot bigger quantity than I can promote to my members,” McConnell told reporters in Kentucky last week. When the Senate returns on Monday, it will vote on a brand new stand-alone invoice to refund the Paycheck Protection Program — which does not embody cash for stimulus checks — doubtlessly establishing a division between Senate Republicans and the White Home. (This is everything you need to know about the Senate’s upcoming vote, and what it might imply for you.)

2. Stimulus fee math works like this

You could have an interest to know that the IRS has a formula for working out how much stimulus money you could get, and that is what determines whether or not you obtain the complete quantity, a partial fee or excess of the $1,200 when you’ve got youngsters.

It additionally explains the way you would possibly nonetheless have the ability to get some stimulus cash, even when your loved ones’s yearly revenue exceeds the limit set out by the CARES Act in March. The calculations begin together with your family’s whole adjusted gross income, add on the money allotted to qualifying dependents, after which begin deducting from the full, primarily based in your revenue bracket (as outlined by the CARES Act). 

You may calculate how much you could get in a stimulus check now, together with for a second test. 

3. Most individuals saved their stimulus cash or paid off debt

A brand new survey this week on how individuals within the US used their first stimulus test make clear the economic reality of the coronavirus’ results. The survey from the Federal Reserve Bank of New York polled 1,300 households between June and August. The examine discovered that of the 89% who reported receiving a stimulus test ($2,400 median whole):

• 29% spent the stimulus cash (on necessities, nonessentials and donations).
• 36.4% saved their stimulus cash.
• 34.5% used it to pay down debt.

When requested what they’d do with a second test of $1,500, 45% of respondents stated they’d save the cash, 30.9% stated they’d apply it towards debt, and 24.2% stated they’d spend it indirectly.

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Next stimulus checks: What to expect

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4. There could be 5 different payment waves

Eligible Americans get their checks at different times, often due to how they’re getting paid. For example, people who have direct deposit — an electronic transfer of funds into their bank account — set up with the IRS could get their checks weeks before those who receive a paper check or prepaid EIP card in the mail. We identified five priority groups based on the first stimulus checks. 

5. New eligibility changes mean you could get more money

It’s likely that a second stimulus check would largely follow the same rules and guidelines as the first. But the qualifications for who could get money are subject to change, in ways that could benefit your family. One proposed bill redefines who counts as a qualifying dependent, and would give your family $500 for each dependent you claim on your taxes, regardless of age. 

The current $1.8 trillion proposal from the White House offers a $1,000 payment per child dependent. We’ve explained how some families might benefit more from one bill versus the other in terms of a total payment. (Here’s how young people could qualify for their own $1,200 check.)

A new survey from Liberty Street Economics broke down how people reported using their first check: 18% of funds went to essential spending, 8% went to non-essential spending, 36% went into savings, 35% was used to pay down debt, and 3% was donated. When asked to break down how participants expected to spend a potential second stimulus check, they said an average of 45% would go to savings, 14% would go to essential spending, and 31% would pay down debt. 

6. You could get money from a second payment faster 

With the first check, the IRS learned how to mobilize and delivery stimulus money, and worked out many of the growing pains in the plan. If a second check is approved, it’s likely that the agency could speed up the process of sending out the first set of payments. The tracking tool is already up and running, the system is in place and it’s likely that the majority of people who qualified for a first check will also receive another. 

The timeline is constantly changing, but we’ve mapped out potential dates a check could be sent if approved before — or after — the election.

7. The IRS could still owe you money

If you’re still waiting for your first stimulus payment, there are several ways to hunt it down. As many as 9 million people were estimated to be eligible for a first check but didn’t receive it, because it requires registering with the IRS — an extra step most people didn’t have to take. The deadline is Nov. 21 and we show you how to do it. Some people with dependents received only a partial payment and are still owed money. The deadline to get that in 2020 passed Sept. 30, but we explain how you can claim it with next year’s taxes. 

8. There are tons of confusing exceptions and rules

If and when a second stimulus check is approved, there will be lots of small details, rules and exceptions that can get confusing. While some situations will be easy to understand, others around you and your dependents might make it unclear if you’re eligible, and for how much money. The fringe cases are many. 

For example:

9. You won’t have to pay taxes on your stimulus money

The IRS doesn’t consider stimulus money to be income. That means a payment you get this year won’t reduce your refund in 2021 or increase the amount you owe when you file your 2020 tax return. You also won’t have to repay part of your stimulus check if you qualify for a lower amount in 2021. The IRS said if you didn’t receive everything you were owed this year, you can claim it as a credit on your 2020 federal income tax return by filing in 2021. Here’s everything to know about stimulus checks and taxes.

There’s much more to know about other government payments during the pandemic, including a possible interest check from the IRS and where the $300 federal unemployment benefit is now.