The second round of federal stimulus checks is now hitting bank accounts after President Donald Trump signed the $ 900 billion stimulus bill last week. Last minute ticket Relief legislation will offer a modest increase to 60% of Americans who have suffered financial problems due to the coronavirus pandemic, but millions may be disappointed to find that they are among the groups that do not qualify for payment.
Checks go adds up to $ 600 for each qualified adult and child – half the value of the $ 1,200 checks sent earlier this year. The $ 600 per person payments are part of the stimulus bill approved by Congress in December and signed by Trump on the night of December 27.
Efforts by Trump and Democratic leaders to raise so-called Economic Impact Payments to $ 2,000 per adult were halted after Senate majority leader Mitch McConnell in December blocked an attempt to vote on the matter. Wall Street analysts say the momentum has only a small chance of advancing, looking at the additional hundreds of billions of dollars that the larger payment would cost.
In drafting the latest stimulus bill, lawmakers sought to rectify several issues that restricted payment of the first round of checks earlier this year. For example, checks will be distributed to immigrant families of “mixed status” – families where American citizens are married to immigrants without Green Cards – a group that was barred from receiving checks earlier this year. Children under 17 will also receive the same $ 600 pay as adults, compared to $ 500 in the first round.
“Children will be entitled to the same benefit amount as qualified adults, and families with members of mixed immigration status with a valid Social Security number for one of the spouses are also eligible for payments, unlike discounts under the CARES Act” , noted the Tax Foundation.
However, the income limits in the most recent stimulus package are slightly different from those stipulated in the Coronavirus Aid, Aid and Economic Security Act (CARES), which will prevent more middle-class families from receiving aid. And there are some groups that were overlooked in the first round of checks that will also lose a second check.
The main ones are: Dependent children aged 17 and adults declared dependent on someone else’s income statement, as is typical of university students.
The IRS on December 29 reported that 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 information. But on the morning of January 4, the site was still down.
Below are the groups of people who will not receive a check for $ 600 in the second round.
Dependents of children aged 17
The $ 900 billion stimulus package directs $ 600 to each child in a family – provided they are considered “qualified children” under the IRS tax code for the Child Tax Credit. Unfortunately for parents of older teenagers, the tax code defines “qualified children” as those who are not yet 17 years old.
In other words, the $ 600 will go to children under 16.
The IRS will use people’s 2019 tax returns to determine their stimulus payments, meaning that teenagers who turned 17 in the second half of 2020 – after tax returns were due to the IRS – could still qualify.
Adult dependents, from university students to the elderly
No dependent adults will be entitled to checks for $ 600, according to the Tax Foundation.
This means that most college students, who are normally claimed as dependents by their parents, do not qualify for checks. This angered some college students, who expressed their frustration on social media. Many are struggling with a series of problems in the pandemic, from food insecurity to loss of income from campus jobs that have been reduced due to COVID-19 restrictions.
Also excluded are the elderly, from the elderly to people with disabilities, declared as dependents, an issue that some on social networks called “slap in the face”.
Disabled adults and elderly people who are claimed as dependents often face higher costs due to issues like higher medical expenses.
Single people earning more than $ 87,000
The second round of checks will have the same type of revenue elimination as in the CARES Act, with payments of stimulus checks reduced to earnings above $ 75,000 per single person or $ 150,000 per couple.
The amount of payment that individuals receive will be reduced by $ 5 for every $ 100 of income earned over these limits, according to the House Appropriations Committee.
But this formula, when combined with the lower $ 600 of checks, means that the income limit for receiving any money will be lower: singles earning more than $ 87,000 do not qualify – compared to the $ 99,000 elimination limit for unique users under the CARES Act.
Couples earning more than $ 174,000
For a similar reason, couples will face a minimum income limit to receive checks for $ 600. Any couple who earn more than $ 174,000 will not receive a payment, below $ 198,000 under the CARES Act.
Overall, almost everyone in the poorest 80% of the income distribution in the United States will receive a check, according to the Tax Foundation estimate. The share of filers who will receive a check decreases for people whose income puts them in the top 20% of paid jobs, with very few contributors among the top 5%, estimated the Tax Foundation.