The Senate passed a budget resolution on Friday morning that will allow President Joe Biden’s $ 1.9 trillion stimulus bill to pass without Republican support. But lawmakers agreed to prevent the biggest winners from receiving the third stimulus check for up to $ 1,400 and indicated that eligibility rules may be stricter than previous direct payments.
The Internal Revenue Service (IRS) is likely to determine eligibility for checks and amounts to be distributed based on people’s latest tax return records. Taxpayers are required to submit their personal declaration from 2020 by April 15, but those who saw their income drop last year due to the ongoing coronavirus pandemic may want to order earlier for a bigger check. On the other hand, those who saw their income increase in 2020 could receive a higher payment if they waited and filed after the checks were distributed.
According to the Senate Finance Committee, Congress must order administrators to use the last individual income recorded – whether 2019 or 2020 – when the checks are ready to be distributed. The IRS will begin collecting tax returns on February 12, and individuals who place an order before checks are issued will receive an amount based on the 2020 income tax return. Those who file after payments are distributed will receive an amount based on in the 2019 income statement.
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According to the American Biden Rescue Plan, individuals who earn more than $ 75,000 will receive a reduced payment and those who earn more can be eliminated completely. The Senate recently overwhelmingly approved a bipartisan amendment proposal, spearheaded by Senators Joe Manchin of West Virginia and Susan Collins of Maine to prevent “high-income taxpayers” from receiving payments.
Americans will likely have to file their 2020 income tax return in the coming weeks to take advantage of the opportunity to use their most recent income for the third stimulus check. On Friday, the Senate supported Biden’s $ 1.9 trillion stimulus package, with Vice President Kamala Harris casting the tiebreaker over budgetary reconciliation. This will allow Democrats to quickly approve the measure without Republican support.
Congress will now have to approve the amendments to deliver the package, and Pelosi said the legislation will be “absolutely” passed before March 14 – an unofficial deadline set by Democratic lawmakers to approve more aid.
Pelosi explained on Friday that the party will “start working on the specifics of the law” on Monday. “Hopefully in two weeks we will send something to the Senate and that will be done well before the end of the initiatives,” said the Mayor, adding that Congress “will finish our work before the end of February”.
The IRS will begin processing payments soon after Biden signs the package. It is currently unclear whether Congress will direct the IRS to pay the difference for those who receive payments based on their 2019 income, but are eligible to receive more money based on their 2020 income.
David Kautter, who served as a senior tax official at the Treasury Department during last year’s stimulus check payments, said The Wall Street Journal that the IRS could complete payments after receiving 2020 returns. But Kautter noted that the process could be postponed until after the tax reporting season.
Newsweek contacted the Treasury Department for comment.