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As Congress works to reach an agreement for a new coronavirus relief law, this could mean new stimulus controls for millions of Americans.
Grants expected to be included in the package include new direct payments of $ 1,400. The proposal also includes other measures to help Americans overcome the ongoing pandemic, such as a higher federal unemployment benefit and raising the federal minimum wage to $ 15 per hour.
Currently, the terms require direct payments of $ 1,400 per person or $ 2,800 per married couple, plus $ 1,400 for dependent children and adults.
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Payments would be based on the same income thresholds as the first two checks. People with adjusted gross incomes of up to $ 75,000, heads of households up to $ 112,500, and married couples who jointly file up to $ 150,000 would get the full payment.
But controls would be phased out for those with incomes above those levels. This time, they would have a limit for people earning $ 100,000, heads of households with $ 150,000, and married couples with $ 200,000.
The coronavirus stimulus package is making its way to the House and Senate under budget conciliation. This process will prevent major alterations to the plan, although the final numbers could change.
Some lawmakers have pushed for reducing the income phase withdrawal to $ 50,000 or $ 60,000 in order to better target those who need the money.
“These details are not yet final and could be adjusted,” Ed Mills, a Washington policy analyst to Raymond James, wrote last week, “but so far they have received few setbacks from moderate Democrats seeking a greater degree of guidance.” for the higher income received from the payment. “
$ 1,400 payment schedule
Legislation is expected to be final in early mid-March.
At this point, the IRS will be deep into the tax filing season, which could make it harder for the tax agency to process both payments and incoming returns, said Howard Gleckman, a senior member of the Center. of Urban-Brookings Fiscal Policy.
Last year, the first $ 1,200 stimulus checks were also authorized during the fiscal season. Ultimately, the tax filing deadline was extended to July 15 from April 15.
Still, the IRS managed to get most of that $ 1,200 in a few months.
“They did an amazing job, much better than we ever imagined they would do, particularly getting that first round of economic impact payments,” Gleckman said.
This time, Democrats have proposed that the controls be based on 2019 or 2020 returns.
This could create an incentive to show up earlier, especially if your income goes down in 2020, which could increase the size of your check, Gleckman said.
If, on the other hand, the IRS uses your 2019 information and meets the requirements to earn more money based on your 2020 income, you may have to wait a full year until the next tax filing season to get the rest of what you deserve, he said.
Alternatively, if your income was lower in 2019 than in 2020, you could get a larger check if the IRS uses last year’s filing.
As with the first two stimulus checks, most payments will likely be sent by direct deposit to those who already have bank information registered with the IRS. Based on the above controls, this money could start to arrive within days of the completion of the legislation.
All other direct payments will be made by mail, either as debit cards or checks. These payments may take a few weeks to arrive.
“The good news is that there’s a little more infrastructure and a more formalized process to do that than this time last year, because they’ve been through it twice,” said Garrett Watson, senior policy analyst at Tax Foundation.
One wildcard that could affect the IRS workload is the proposal to extend the child tax credit. If applied in conjunction with the current aid bill, the IRS can send families to collect monthly payments of up to $ 300 per child.
On Tuesday, the IRS said it had sent all “legally permitted” first and second stimulus checks, and that it is now focusing on the tax filing season.
The tax agency sent more than $ 160 million in stimulus checks worth $ 1,200 totaling more than $ 270 billion. It has also sent more than $ 147 million in direct payments of $ 600 for a total of more than $ 142 billion.