Many Americans will be saying goodbye to 2020 with an additional $ 600 in their pockets after Congress approved an aid package Monday night.
The $ 900 billion relief bill includes $ 600 stimulus checks for most adults who are not considered dependent, as well as $ 600 for children 16 and under. The bill also provides a $ 300 increase in unemployment benefits for 11 weeks, an additional $ 284 billion in Paycheck Protection Program (PPP) funds, and $ 25 billion in emergency rental assistance. President Trump was due to sign it from Tuesday morning.
12 FAQs on the second stimulus check
So far we know the following about the second stimulus check. We’ll update this post as we learn more.
1. How much do I get for the second stimulus check?
Individuals earning up to $ 75,000 per year will receive $ 600, and couples earning up to $ 150,000 will receive $ 1,200. Individuals earning up to $ 112,500 who sign up to be a head of household will also receive the full $ 600. That’s half the amount on the first round of checks. You will also receive the full $ 600 for each child 16 and under in the household. That means that a couple with two children who received $ 3,400 in the first round will now receive $ 2,400.
For every dollar you earn over the limit, the payments are reduced by 5 cents until they disappear completely. Since the checks are smaller this time, they will expire at lower levels. For example:
- A person with no dependent children will not receive payment if their income was over $ 87,000 (previously $ 99,000).
- A couple with no dependent children will not receive payment if their income was over $ 174,000 (previously $ 198,000).
- A couple with a child under the age of 16 will not receive payment if their income was over $ 186,000 (was $ 208,000).
2. On which tax return for the year are the payments based?
They are based on 2019 tax returns, although technically they represent an advance on a 2020 credit. (No, that doesn’t mean you owe more for your 2020 return as we will discuss in question 8.) If your income fell in 2020 and you were eligible for a payment or you had a child in 2020, are You will receive your payment as a discount in 2021 when you file your tax return for 2020.
3. Will college students who are dependent on their parents receive a check?
The rules are the same as in the first round: if they are 17 years or older, they will not qualify. They may be eligible for the first and second payments (totaling $ 1,800) if they file their own 2020 tax returns and are not claimed as dependent.
4. What about disabled adults who are dependent on a family member?
If they are 17 years or older, they are not eligible. You are also likely to be eligible for both payments if you file your own returns and no one is claiming them as dependent for 2020.
5. I’m in social security. Do I get a stimulus check?
Yes, as long as your income is below the thresholds listed above and nobody claims you to be dependent. The same applies to people who receive Railroad Retirement, SSI, SSDI and VA benefits. The IRS gets your information from Social Security or any other agency that provides your benefits so you don’t need to take any action.
6. I don’t have a social security number. Do I get a stimulus check?
You won’t get a stimulus check, but if you’re married to someone who has a Social Security number, they’ll still get a $ 600 check. This is a change from the first round of reviews. Under the CARES Act, both spouses were not eligible if one spouse had a social security number and the other did not.
7. When will I get my check?
Treasury Secretary Steven Mnuchin told CNBC on Monday that initial payments could run out early next week. Those who have updated direct deposit information on file with the IRS or who receive government benefits such as social security through direct deposit will get their checks quickest.
8. Are the payments taxable?
No, you do not owe any tax on stimulus payments as the checks are a special 2020 tax credit that you receive early – although they were sometimes incorrectly described as an advance on your 2020 refund. A tax credit reduces your tax liability one dollar at a time. So if you normally don’t owe anything and receive a special $ 600 balance, you will get a $ 600 refund. All you get is the $ 600 credit that you normally wouldn’t get a few months earlier.
9. I did not get the first round because I earned too much in 2019 but lost my job in 2020. Will I qualify for this round?
Yes, as long as your 2020 income is within the limits set out in question 1, you will have to wait until you file a 2020 tax return. You can get both the $ 1,200 and $ 600 payments when you are eligible for the maximum benefit.
10. What if I had a child in 2020?
You will not get the $ 600 credit towards your new addition if you receive your stimulus payment at the same time. However, when you file your 2020 tax return, you will receive a discount of $ 600 on your child’s behalf.
11. Do I get a check if I owe tax back?
Yes. Your check will not be garnished or cut if you owe federal or state taxes, or if you are behind on federal student loans.
12. What about child benefit?
The rules for unpaid alimony and stimulus checks for children are the same as for the first payments. If your tax refund is seized by the Treasury Offset program, this will likely be your stimulus review as well. If someone owes you child support and you usually get the tax refund, you will likely get the stimulus check too. However, it will first go to the government agency that pays child support payments. So don’t expect the check to be made out immediately.
Robin Hartill is a certified financial planner and senior editor at The Penny Hoarder. She writes the Dear Penny personal finance advisory column. Send your tricky money questions to [email protected].