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As Congress works to reach an agreement on a new coronavirus relief bill, it could mean new stimulus checks for millions of Americans.
New direct payments of $ 1,400 are among the help that must be included in the package. The proposal also includes other measures to help Americans overcome the ongoing pandemic, such as higher federal unemployment benefits and raising the federal minimum wage to $ 15 an hour.
Currently, the terms require direct payments of $ 1,400 per individual, or $ 2,800 per couple, plus $ 1,400 for dependent children and adults.
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Payments would be based on the same revenue limits as the first two checks. Individuals with up to $ 75,000 of adjusted gross income, heads of households with up to $ 112,500 and couples who enter up to $ 150,000 will receive full payment.
But checks would be eliminated for those with income above those levels. This time, they would be limited to individuals earning $ 100,000, heads of households at $ 150,000 and couples at $ 200,000.
The coronavirus stimulus package is making its way into the House and Senate under budget reconciliation. This process will avoid major changes to the plan, although the final numbers may change.
Some lawmakers have been pushing to reduce gradual outflows of revenue to $ 50,000 or $ 60,000 to better target those who need the money.
“These details are not yet final and could be further adjusted,” wrote Ed Mills, Washington policy analyst at Raymond James, last week, “but so far they have received little resistance from moderate Democrats seeking a greater degree of direction for the higher income recipients of payment. “
$ 1,400 prospective payment schedule
The legislation is expected to be finalized in early mid-March.
At that point, the IRS will be in the midst of a tax filing season, which may make it more difficult for the tax agency to process payments and returns received, said Howard Gleckman, senior researcher at Urban-Brookings Tax Policy Center.
Last year, the first $ 1,200 stimulus checks were also authorized during the tax season. Ultimately, the deadline for filing taxes has been extended to July 15 from April 15.
Still, the IRS was able to release most of those $ 1,200 payments in a few months.
“They did an incredible job, much better than we ever imagined they would, getting mostly the first round of economic impact payments,” said Gleckman.
This time, Democrats proposed that the checks be based on returns from 2019 or 2020.
This could create an incentive to place an order earlier, especially if your revenue drops in 2020, which could increase the size of your check, Gleckman said.
If the IRS uses your 2019 information instead and you qualify for more money based on your 2020 income, you may have to wait a full year until the next tax return season to receive the rest of what is due, he said.
Alternatively, if your income was lower in 2019 than in 2020, you could receive a larger check if the IRS uses last year’s deposit.
As with the first two stimulus checks, most payments are likely to be sent via direct deposit to those who already have their bank information on file with the IRS. Based on previous checks, that money could start to arrive a few days after the legislation is finalized.
The rest of the direct payments will be sent by post, either by debit cards or checks. These payments can take several weeks to arrive.
“The good news is that there is a little bit more infrastructure and a more formalized process for doing this than last year, because they’ve been through it twice already,” said Garrett Watson, senior policy analyst at the Tax Foundation.
A wildcard that can affect the IRS workload is a proposal to expand the child tax credit. If this passes with the current relief bill, the IRS can send families that qualify monthly payments of up to $ 300 per child.
On Tuesday, the IRS said it sent all the first and second “legally permitted” stimulus checks and is now focusing on the tax reporting season.
The tax agency sent more than 160 million $ 1,200 stimulus checks totaling more than $ 270 billion. It also sent over 147 million direct payments of $ 600, totaling more than $ 142 billion.