(CBS Detroit) – It seems that a third stimulus control is getting safer every day. As the economic weight of the ongoing COVID pandemic continues to rise, President Joe Biden and politicians on both sides of the aisle support putting more money in the pockets of Americans as soon as possible. Although it seems likely that relief will be paid, as long as it remains in question.
A $ 1,400 stimulus check is part of the $ 1.9 trillion relief package proposed by the Biden administration. The American Rescue Plan, in its current form, would also include more unemployment benefits, an improvement in the tax credit for minors, and additional aid for millions of Americans in financial hardship due to the ongoing COVID-19 pandemic. Democrats control both houses of Congress and have expressed a willingness to pass stimulus legislation in a direct party vote if they need to. They have also paved the way for budget conciliation, which would allow them to shun the filibuster in the Senate and pass stimuli with a simple majority.
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The $ 1,400 figure that has received so much attention seems set to become a reality. But the actual amount that reaches people’s bank accounts could change depending on the income threshold, the number of dependents, and other factors.
Last week, a group of 10 Republicans in the Senate submitted a $ 618 billion counter-offer to the U.S. bailout plan. Its package would reduce direct payment to $ 1,000 and cover recipients ’annual income to $ 40,000, after which the amount of the stimulus check would be progressively reduced to $ 0. Late last week, the president rejected the idea of reducing the amount. “I don’t reduce the size of checks,” Biden stressed Friday. “It will be $ 1,400, period. That is what was promised to the American people. “
However, the idea of reducing the annual income requirement has gained momentum.
The previous two stimulus controls gradually disappeared for people with adjusted gross income (AGI) in excess of $ 75,000 per year and married couples with an AGI in excess of $ 150,000. (AGI is the total of your salaries, interest, dividends, alimony, retirement distributions, and other sources of income minus certain deductions, such as student loan interest, alimony payments, and retirement contributions.) For every dollar you earn. ‘income above the threshold, the previous two stimulus payments fell by five percent. Therefore, the $ 1,200 CARES Act payment is reduced to $ 0 for income in excess of $ 99,000 ($ 198,000) and the $ 600 of the second stimulus was reduced to $ 0 for income in excess of $ 87,000 (174,000). dollars).
The Biden administration is considering lowering the revenue threshold to $ 50,000 ($ 100,000). Assuming the same five percent formula, a payment of $ 1,400 ($ 2,800) would actually be $ 700 ($ 1,400) with an annual income of $ 64,000 ($ 128,000) and $ 0 with an annual income of $ 78,000 ($ 156,000). ).
The thinking behind such changes is to ensure that more money is spent on a wider economy than saved. According to a survey by the Federal Reserve Bank of New York, the average percentage of the first stimulus payment a household spent on commodities decreased as incomes increased. The average percentage of the first stimulus payment a household saved increased as income increased. While lowering the income threshold would better target the economy, it would also reduce the number of people receiving a third stimulus control and the amount other people receive.
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A recent Democratic proposal kept the revenue threshold at $ 75,000 ($ 150,000) and set the upper limit at $ 100,000 ($ 200,000). In this setting, the $ 1,400 ($ 28,000) as revenue increased to $ 100,000 ($ 200,000). The issue remains very undecided.
Dependent children can also affect the size of your next stimulus. The second stimulus check included $ 600 per dependent child. A dependent child is considered to be anyone under the age of 17 who lives in their home. There was no limit on the number of children. And for the purposes of phasing out, $ 600 was added to the total for adults. As an example, an adult, who had two children, would have received $ 1,800 in January if his AGI was less than $ 75,000. That amount would have decreased to $ 1,200 at an AGI of $ 87,000; $ 600 on a $ 99,000 AGI and $ 0 on a $ 111,000 AGI.
The American Rescue Plan seeks to expand the set of eligible dependents to include those over 16 years of age. In this group there would be college students and older adults with certain types of disabilities. This change could lead to an estimated 13.5 million more people being able to receive stimulus checks.
The amount of a third stimulus control could also be affected by the recipient’s taxes. To expedite distribution, the Internal Revenue Service has used the most recent tax returns to determine AGI and therefore eligibility. The AGI changes from year to year as people get promoted, change jobs or become unemployed. The first relief payment was approved in March 2020. At that time, some people had filed 2019 taxes and others had not. Therefore, the amount of the check could have been based on the 2018 or 2019 taxes. The second relief payment became law in December 2020, after most everyone had filed the 2019 taxes. Therefore, this amount was determined according to the 2019 tax filing.
The third relief payment could be signed in early mid-March 2021. By then, some people will have filed taxes by 2020. Others will not. This means that a third payment could be based on 2019 or 2020 taxes. Last year there was significant unemployment, which often harms the finances of individual households. If one AGI changes significantly from one tax return to the next, it could also change the amount of your next incentive.
When can this third stimulus control arrive? The administration’s goal is to sign the U.S. rescue plan before March 14th. It’s also when the current $ 300 unemployment benefit bonus expires. Assuming President Biden is able to sign the relief package on March 14, direct deposits are likely to begin the week of March 22 and checks to begin arriving in the week of March 29.
However, House Speaker Nancy Pelosi seems to have an even more aggressive timeline. According to comments made last Friday, his intention is to approve the US rescue plan in two weeks. The Senate will then be able to approve it by direct online vote. In this scenario, the stimulus package could go through Congress on February 26 and become law on March 1. Direct deposits would begin arriving in bank accounts on March 8 and checks would begin mailing on March 15. , due to the ongoing dismissal trial in the Senate or for some other reason.
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Originally posted at 2:46 PM ET on Thursday, February 11, 2021.