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

Do I need to file my taxes to be eligible to receive a Stimulus check?

by Mounica Kota | Apr 16, 2020 | CARES, COVID - 19, federal government, Form RRB 1099, IRS, Stimulus payment

Do I need to file my taxes to be

eligible to receive a Stimulus check?

In the US, the Federal Government had passed the CARES (Coronavirus Aid Relief and Economic Security) Act to bring some relief to the Americans who are struggling due to the outbreak of COVID-19. Under the CARES Act, the IRS announced that a Stimulus check would be issued to the individuals in the US for financial relief up to some extent.

According to the IRS, most of the Americans would be receiving their Stimulus checks automatically based upon the 2019 tax returns. The information of the 2018 tax returns would be considered if the 2019 tax returns have not been filed by an individual. The Stimulus payments would be done by the Direct Deposit method as it would help in sending the money faster.

Who is eligible to obtain the Stimulus payment?

The majority of the American population would qualify to receive the Stimulus payment. The size of the Stimulus payment would depend on the Adjusted Gross Income (AGI) of the individuals.

For an individual who is filing his tax returns as a single filer and is having AGI below $75,000, the Stimulus payment received would be $1200. He would also receive an additional payment of $500 if he would claim a dependent below the age of 17 years. If the AGI of the single filer is above $75,000, then the Stimulus payment would reduce by $5 for every $100 increase in AGI above $75,000. Also, if the AGI of the individual is above $99,000 and no dependents are being claimed then the individual would not receive any Stimulus payment.

For married couples filing their tax returns jointly and are having an AGI below $150,000, the Stimulus payment received would be $2400. They would also be eligible to receive an additional payment of $500 by claiming a dependent below the age of 17 years. If the AGI of the couple is above $150,000, then the Stimulus payment would reduce by $5 for every $100 increase in AGI above $150,000. Also, if the AGI of the individual is above $198,000 and no dependents are being claimed then there would be no Stimulus payment received.

Need to file tax returns to obtain Stimulus payment

Let us talk about those instances where the filing of tax return is necessary to obtain the Stimulus payment.

Self-employed individuals who have a net income of $400 or more must file their tax return as they would have to pay self-employment taxes on the income of $400 or more.
Those taxpayers whose income is more than the income filing threshold as determined by the IRS need to file their tax returns for obtaining the Stimulus payment. This income filing threshold determined by IRS is $12,200 for single filers, $24,400 for married couples who are filing their tax returns jointly and $18,350 for filers filing returns as ‘Head of Household’.
Those dependents who have an unearned income of more than $1,100 and earned income more than $12,200 must file their tax returns for receiving the Stimulus payment.
If an individual owes taxes on an IRA or Health Savings Account he will have to file his tax returns for obtaining the Stimulus checks.
If an advance payment of the health coverage tax credit has been received by an individual, then he must file his tax returns.

Situations which rule out the need to file tax returns for receiving Stimulus payment

a.Social security recipients and the Railroad retirees who have not filed their tax returns for the year 2019 or 2018 do not need to perform any additional paperwork like filing a tax return for obtaining the Stimulus payment. The IRS would use the information from Form SSA-1099 and Form RRB-1099 respectively to obtain the information needed to send the Stimulus payment.

b.Those Americans who belong to the lower-income group or who have income below the tax filing threshold of IRS and have not filed tax returns for 2019 or 2018 must use the new web tool of the IRS. By using this tool, individuals can enter their basic information like Name, Address, SSN, Dependents, etc. This information would help in calculating and sending the Stimulus payment.

c.Recipients of Supplemental Security Income (SSI) will obtain their Stimulus payments automatically without the need for filing the tax returns. However, if they have qualifying dependents below the age of 17 years must use the web tool of IRS to claim the additional $500 payment. This is also applicable for the Railroad Retirees and Social Security beneficiaries.

Hence, taxpayers don’t need to file tax returns for obtaining the Stimulus checks. It mainly depends upon the circumstances which determine the need to file the returns.