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Finally, it appears that help is on the way.
Senate Republicans and Democrats have hammered out a deal with the White House for a historic $2 trillion coronavirus aid package that would provide direct payments to lower- and middle-income Americans, as well as hundreds of billions of dollars in assistance to corporations, small businesses, and hospitals and health care providers.
Unsurprisingly, the direct payments portion of the package has garnered the most attention. The coronavirus outbreak has devastated the U.S. economy, and with many Americans losing their jobs and hurting financially, all eyes have been on Washington to see how lawmakers would help alleviate the burden.
While the final version of the bill—which still needs to pass both chambers of Congress—remains to be seen, here’s what we know so far about the coronavirus stimulus checks and how they will work.
Who qualifies to get stimulus checks?
Virtually all tax-filing Americans adults earning up to $99,000 annually will be eligible for some form of direct assistance from the government. Married couples and joint filers who earn up to $198,000 are also eligible.
How much will the stimulus checks be worth?
Individuals who make up to $75,000 per year will receive a $1,200 rebate from the federal government, while couples who earn up to $150,000 annually will receive $2,400. For those who exceed those income levels, the benefits are gradually reduced at a rate of $5 for every $100 dollars of additional income, and eventually capped at individuals who earn $99,000 and couples who earn $198,000. Additionally, parents are eligible for a $500 rebate per child.
When will the stimulus checks be sent out?
This is where it gets tricky. Treasury Secretary Steven Mnuchin has said that he’d like to see Americans start receiving direct assistance in as little as two or three weeks after the stimulus package is signed into law—but that seems exceedingly optimistic. As Erica York of the Tax Foundation think tank noted, the quickest time frame in which the federal government has previously been able to issue stimulus checks has been six weeks.
“Historical precedent, plus the unprecedented crisis we’re in, leads me to believe May is the earliest the [Internal Revenue Service] would be able to start sending any checks,” York says.
How will I get my stimulus check?
For the roughly 70 million Americans who have already provided their direct-deposit bank account information to the IRS, rebates should be pouring into their bank accounts within weeks of the bill’s passage, Senate Democratic aides told the New York Times on Wednesday. But those who haven’t provided such information may have to wait up to four months for their checks to arrive—a time frame that surely works against the bill’s intention of providing financial assistance to struggling Americans as soon as possible.
Are the stimulus checks taxable?
It appears extremely unlikely. However, for Americans who have yet to file their 2019 income taxes, the rebates may need to be based on their 2018 income levels. That means that they could be subject to adjustment once people finally file their 2019 taxes, depending on whether they received too large or too small of a rebate based on their most recent income levels.
The Tax Foundation’s Erica York notes that the most recent version of the bill indicates that taxpayers who receive too large of a rebate would not be required to return funds to the government, while those who received too small of a check would see their rebate adjusted upwards.
Will retirees and Social Security beneficiaries receive stimulus checks?
Yes. The proposed bill includes language that allows Americans receiving Social Security—many of whom are retired and don’t file taxes—to obtain direct financial assistance through the coronavirus stimulus package. In such cases, the government would access their data through the Social Security Administration to determine their rebate.
That said, not all older people who are already reliant on government assistance are immediately eligible for a rebate. According to Steve Wamhoff of the Institute on Taxation and Economic Policy (ITEP) think tank, the current bill excludes recipients of Supplemental Security Income (SSI), a federal welfare program granted to elderly and disabled people who are often living in poverty and, in many cases, aren’t required to file tax returns.
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