Second stimulus check update

Second stimulus check update

July 22, 2020

What is the new stimulus timeline? What’s the status for Americans who’ve filed their taxes? Who is eligible and who is not? when’s the soonest the IRS could send a second stimulus check? How much will it be? We try to answer all your questions.

The issue of a second stimulus check is now far less murky than before. After Senate Majority Leader Mitch McConnell confirmed early Monday that the next economic rescue package will include more money earmarked for individuals and families — “we want another round of direct payments,” he said — the real work can begin.

The Senate and House have a long way to go before the IRS can start sending out to those who would be eligible for a second payment another round of stimulus checks. First, McConnell has set a deadline to pass the next economic rescue bill. To meet it, White House leaders will need to work with members of Congress to agree on the size and scope of the next rescue bill.

The consequences of not passing a second bill would be far-reaching and, while Congress is working on the outlines of the package, McConnell said it was very unlikely a deal would be reached by the end of next week, the Washington Post reported.

“We can’t go home without [new legislation],” House Speaker Nancy Pelosi, a California Democrat, cautioned on July 16. “More people have died. More people have gone on unemployment. And more people have been infected.”

What exactly happens if another stimulus check doesn’t get approved before the next recess? And if new legislation is passed, when’s the soonest you might expect to see a second IRS payment?

Here’s what you need to know.

Second Stimulus Checks

McConnell says that Senate Republicans, after a closed meeting Tuesday, support second stimulus checks. This is the first time that McConnell has confirmed that Senate Republicans officially will support second stimulus checks. Previously, there has been debate within the party whether second stimulus checks were necessary given other economic priorities. With Republican support in Congress, this now means that President Donald Trump and Democrats in Congress all support second stimulus checks. While not guaranteed to be included in the new stimulus package, it’s a good bet that second stimulus checks, or Economic Impact Payments, likely will be included to help the American people.

“We want another round of direct payments, direct payments to help American families keep driving our national comeback,” McConnell said.

Second stimulus checks amount still unclear

While there may now be support for second stimulus checks, the details remain unclear. McConnell has not announced the amount of the proposed second stimulus check, nor has he announced the criteria to receive a second stimulus check. Previously, McConnell suggested that second stimulus checks may only be available to Americans who earn up to $40,000 a year. Why? Congress has already authorized trillions in economic stimulus, and some Republicans, like McConnell, are cautious about further spending. If Republicans limit the criteria to receive a second stimulus check, it could cause widespread objections from millions of Americans, particularly in an election year. There has also been discussion of making the second stimulus check less than $1,200.

In contrast, the first stimulus check under the Cares Act was up to $1,200 for each individual, $2,400 for married/joint filers and up to $500 for dependents. If you earned less than $75,000 (individuals) or $150,000 (married/joint filers), you could receive $1,200 for the first stimulus check. The first stimulus check phased out above those income limits until $99,000 of adjusted gross income for individuals and $198,000 for married/joint filers. It’s not yet clear whether Senate Republicans will propose the same $1,200 and income cut-offs for second stimulus checks. In contrast, House Democrats passed the Heroes Act, the $3 trillion stimulus package, which includes $1,200 second stimulus checks, plus $1,200 for each dependent. Trump has said he wants a second stimulus check that is larger than the second stimulus proposed by Congress.

New Stimulus: key timeline

McConnell plans to share details of the new stimulus package this week. In addition to second stimulus checks, the new stimulus package could include unemployment benefits or a return to work bonus, a payroll tax cut (a top priority for Trump), an extension of the payment protection program, liability protection for businesses, funding for states and schools and other economic priorities.

What is the timeline for the new stimulus?

Week ending July 24: Republicans will finalize the new stimulus proposal and begin discussions with Democrats in Congress.

July 31, 2020: The House of Representatives breaks for summer recess after July 31.

August 7, 2020: Senate breaks for summer recess after August 7, so Congress is under time pressure to finalize a deal before then.

September 8: Congress returns from summer recess. While it’s more likely a final deal is reached before August 7, a potential stalemate between Democrats and Republicans could push a new stimulus package to September. The election is November 3, so members of Congress have an incentive to get a deal done to bring the positive news of a new stimulus back to their district.

How soon can I get a second stimulus check?

When will you get a second stimulus check? It depends when a deal is reached. You can look at the Cares Act — the $2.2 trillion financial stimulus that included the first stimulus check — as precedent. Congress approved the Cares Act on March 27, 2020. The Treasury Department started sending the first stimulus check on April 15. That’s 17 days from approval to the first stimulus check being sent. If Congress approved the new stimulus package before August 7, and the U.S. Treasury sends second stimulus checks 17 days later, it’s possible that second stimulus checks are sent in late August. Importantly, the U.S. Treasury may send second stimulus checks, if approved, faster or slower than the 17-day period for the first stimulus check.

(Sources: Forbes, The Washington Post and C|net)