As COVID's financial pressures mount...
Calls for a second stimulus payment may soon be answered. The upcoming stimulus proposal from Republican lawmakers will include plans to issue a second check to millions of taxpayers. While the details won't be made official until the next bill is signed sometime within the next few weeks, indications from both sides of the aisle in Congress suggest that another stimulus payment appears all but guaranteed.
Why a second check will likely happen
It's an issue both sides agree on. While drafting May's HEROES Act, the Democrat-supported idea of a second stimulus payment was widely opposed by Republican lawmakers. This time around, it's Senate Republicans who are arriving at the bargaining table with plans for a second payment. Their initial support means the notion of another check should face minimal opposition en route to negotiations with the House of Reps and White House.
What should stay the same
- The amount. Statements from Treasury Secretary Steve Mnuchin indicate the new proposal should match the CARES Act's approach to stimulus checks, meaning it's highly likely $1,200 will again be the standard sum sent to taxpayers who qualify. The same additional $500 check per dependent under 17 years old is also likely to remain as part of the new bill.
- Earners under $75,000/year receiving the full sum. While Mitch McConnell suggested earlier in the month the notion of a $40,000 cutoff that tracked low-income limits in the U.S., those rates can vary greatly across the country. Given the upcoming proposal's adherence to the CARES Act, it's more likely we'll see the same $75,000 limit.
What could change
- Limits for higher-earning qualifiers. While those earning between $75,000 and $100,000 were entitled to at least some portion of the standard payment, these limits may shift as part of a compromise later in negotiation, especially since this group's financial need is likely lower than those earning less.
- Who gets left out. While multiple groups, including children over age 16, college students under age 24, and non-resident aliens weren't given any direct payments through the CARES Act, there is a small chance that negotiations could push one or more of these groups, many of whom pay taxes, to be included.
- The size of the stimulus. McConnell has stated Congress' target budget for the upcoming stimulus bill is roughly $1 trillion, nearly half the size of the CARES Act, which could ultimately mean less money to go around and a narrow range of areas the funding could cover. Fortunately, it seems the prospect of a second check is one of the leading, must-include items.
Could these checks arrive faster?
While the first round of checks took around 13 days to send after the bill's signing, the IRS is poised to send out the money even quicker this time. While the CARES Act required mass payments of an unprecedented scale, the experience has given the IRS procedures, online tools, and bank account information that weren't set up the first time around. A better-prepared IRS might not just mean swifter payments; they may also implement them at a lower administrative cost, making more efficient use of our own tax dollars. That said, the IRS won't be able to send out the payments until President Trump signs the bill into law, a process that, even at its quickest, could take several weeks.