What to expect in the Second Stimulus Check?

by Mounica Kota | Jun 25, 2020 | COVID - 19, HEROS act, Second Stimulus Check, Stimulus check

What to expect in the Second Stimulus Check?

The US Legislation has passed a relief package of $3 trillion known as the HEROES Act n 16th May 2020. By now, most of the Americans have received their stimulus check associated with the CARES Act and there has been a declaration of an official recession. The rate of unemployment across the country has increased exponentially making it quite necessary for another round of Stimulus payment.

The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act would help the American households in obtaining another round of Stimulus payments. The Heroes Act would be offering larger stimulus payment to the Americans than that offered by the CARES Act. This bill is currently with the Senate House and has been passed successfully by the Democrat-controlled House.

The need for the Second Stimulus Check

The need for the second Stimulus check by the Americans is quite justified as the pandemic COVID-19 has caused huge losses to the health and the economy of the Americans. Millions of Americans have lost their jobs and there are speculations for further loss of millions of jobs in the US. However, some reports have stated the information about the steady lowering in the unemployment rate in the US. The unemployment rate in the US has dropped by 1.4% from April and there have been around 2.5 million jobs added back since March. This can be considered as a major reason for the Senate to reject this bill of the Second Stimulus Check.

Eligibility to obtain the Second Stimulus Check

If a taxpayer was eligible for obtaining the first Stimulus check then he would be eligible for obtaining the Second Stimulus check. According to the most recent tax returns filed by a taxpayer, people who earn less than $75,000 would be obtaining $1200 whereas married couples can earn $2400 as Stimulus payment.

The age restriction for qualifying as a dependent was set as below 17 years by the CARES Act whereas the HEROES Act has removed this qualifying criterion. Moreover, those taxpayers who have an earning up to $100,000 in a year would receive a prorated amount as Stimulus payment.

Money to be obtained with the second stimulus check

Every member of a household would be receiving $1200 inclusive of the children as well. Those taxpayers who are filing their tax returns with the single status and have an earning less than $75,000 would receive the entire payment. This income threshold is $150,000 for those taxpayers who are married and are filing their tax returns jointly.
Under the Heroes Act, the total payment for one family would be capped at $6,000.

Provisions for Older students under the HEROES Act

Under the CARES Act, dependents whose age was below 17 years would be eligible for the receipt of the $500 payment. This excluded many high school students, seniors, and many other college students who were already claimed as dependents on their parent’s tax returns from obtaining the Stimulus Check.
However, the HEROES Act ensures that all dependents who might be college going students or teenagers would receive the Stimulus Check of $1200.

Provisions for Immigrants to obtain the second Stimulus Check

The CARES Act needed an American to have a Social Security Number as a mandate for obtaining the Stimulus payment. However, the HEROES Act needs a taxpayer to only have the Taxpayer Identification Number (TIN) to obtain the Stimulus check.

The Taxpayer Identification Number is used by the immigrants to pay their taxes and thus, it is feasible for the immigrant taxpayers to obtain the Second Stimulus check.

By when would the Second Stimulus Check be received?

It is quite uncertain as to by when the Senate would be considering the Second Stimulus Check payments. However, it has been estimated that the Stimulus Checks would reach the Americans early this time as compared to that of the CARES Act. Millions of Americans have verified their information on the “Get My Payment” site of the IRS and this would make the payments faster this time. According to experts, if the bill takes another two weeks for approval then the Americans would be seeing their payment for the Second Stimulus Package by the end of July or early of August.

Hence, with the impact of the pandemic intensifying daily this initiative by the US Government would be of real help to the Americans in overcoming the economic crisis caused by the pandemic COVID-19.

References

https://www.cnet.com/personal-finance/second-stimulus-check-how-much-you-could-get-when-could-payments-come-latest-news/ https://www.cnet.com/personal-finance/second-stimulus-check-how-much-you-could-get-when-could-payments-come-latest-news/

https://www.cbsnews.com/news/second-stimulus-check-how-much-when-heroes-act/

https://www.tomsguide.com/news/stimulus-check-2-update-senate-vote-date-eligibility-and-latest-status

https://www.forbes.com/sites/terinaallen/2020/05/11/the-2000-second-stimulus-check-what-americans-say-about-it/#4e78ee53514f

Who qualifies for the COVID-19 Stimulus Checks?

by Mounica Kota | Apr 30, 2020 | COVID - 19, single tax filing, Stimulus check, Tax returns Jointly

Who qualifies for the COVID-19 Stimulus Checks?

On 27th March 2020, the US President Donald Trump had signed the CARES (Coronavirus Aid, Relief, and Economic Security) Act into law. This CARES Act also led to the initiation of a $2 billion Stimulus package which can be said as the largest emergency relief bill passed in the history of America so far.

A part of this Stimulus package includes cash payment to the eligible Americans which has been termed as “Stimulus Check” by common people and as “Economic Impact Payment” by the IRS. Technically, Stimulus checks is an advanced tax credit meant to offset an individual’s federal income taxes for 2020.

So, now there are numerous queries related to the eligibility of obtaining Stimulus checks popping up in the minds of the Americans.

Who is eligible to obtain Stimulus checks?

The basic eligibility for obtaining Stimulus checks from the US Government can be summarized below.

You must be a US citizen or a US National or a US resident alien.
You must not have been claimed as a dependent on the tax return of someone else.
Your Adjusted Gross Income (AGI) in 2018 or 2019 should be below the threshold for your filing status.
You should have filed a tax return for the year 2018, 2019 or should have Social Security Benefit Statement, or Form SSA-1099, or Form RRB-1099 or Social Security Equivalent Benefit Statement.

The Stimulus Check payment which would be obtained as per the AGI threshold can be summarized as below.

a.A single individual or married but filing tax returns separately

If your Adjusted Gross Income (AGI) is below $75,000 then the Stimulus Check received would be an amount of $1200.
In case of your Adjusted Gross Income (AGI) being more than $75,000, the amount received as Stimulus Check would be reduced by $5 for every $100 increase in the AGI above $75,000.
You would also receive an additional $500 for each qualifying child who is below the age of 17 years.
In case your AGI is above $99,000 and no qualifying children are claimed, there would be no Stimulus Check obtained.

b.Married couples filing tax returns jointly

If you are married and filing tax jointly with an AGI which is less than $150,000 the Stimulus Check received would be $2400.
In case the AGI is more than $150,000 the Stimulus Check would be reduced by $5 for every $100 increase in the AGI above $150,000.
You can also obtain an additional $500 for each qualifying child who is below the age of 17 years.
In case the AGI is above $198,000 and no qualifying children are claimed, there would be no Stimulus Check obtained.

c.Individuals filing tax returns as the “Head of Household”

1. In this case, if the AGI is less than $112,500 the Stimulus Check received would be $1200.

2. In case the AGI lies in between $112500 and $136500 the Stimulus Check would be reduced by $5 for every $100 increase in the AGI above $112,500.

3. You would obtain an additional $500 for each qualifying child who is below the age of 17 years.

4. In case the AGI is above $136,500 and no qualifying children are claimed, there would be no Stimulus Check obtained.

Qualifying criteria for a dependent to receive the Stimulus payment

You must be claiming your dependents in case of your tax returns.
Your dependents must be below the age of 17 years.
Your dependents should be a US national or a US citizen or a US resident alien.
They must be related to you either by blood, marriage or by adoption.
Your dependents must have lived with you for at least half of the year.

Moreover, some more additional information related to the qualifying criteria of dependents can be noted below.

Your dependent must have a valid Social Security Number (SSN) to qualify for the receipt of Stimulus payment.
There is no limit on the number of dependents who can be eligible for obtaining the additional $500 in Stimulus check from a particular household.
In case you are claiming your child as a dependent and your child also files his tax then he would be qualifying for an additional $500 payment as your dependent. He would not be considered eligible for his Stimulus payment.
In case you have not filed your 2019 tax return and your dependent was 16 years while filing 2018 returns, then he is eligible to obtain the $500 Stimulus payment.

Hence, with the Stimulus Checks being an effective method to overcome the financial crisis caused by COVID-19 it is advisable to file your 2019 tax returns soon if you have not done so yet.