Just before the COVID-19 pandemic hit its peak in the U.S. in March, Congress passed a $2.2 trillion relief bill that included $1,200 direct payments to Americans.
The bill was called the Coronavirus Aid, Relief, and Economic Security — or CARES —Act. Then, Congress no longer CARED.
The virus has cratered the economy, closing hundreds of thousands of businesses and putting millions of people out of work. But lawmakers on both sides couldn’t agree on anything as the 2020 presidential election approached.
But finally, with Democrat Joe Biden certified the winner by the Electoral College, congressional leaders on Sunday unveiled a $900 billion stimulus that calls for another round of direct payments to help Americans.
The bad news: The checks will be just $600. The good news: Once the bill is passed, the checks will be in the mail or directly deposited into bank accounts within weeks.
When the CARES Act was passed, the Internal Revenue Service cut 153.1 million checks and direct deposits all the way through August, totaling $269.3 billion, The Associated Press reported.
The payments began rolling out in mid-April, about two weeks after the CARES Act was passed. More than 81 million payments were disbursed within weeks, totaling more than $147 billion, all through electronic transfers to recipients’ bank accounts, according to the Government Accountability Office.
In August, as lawmakers continued to debate more direct payments to Americans, Treasury Secretary Steven Mnuchin said the federal government could roll out new checks the week after Congress passed a bill. “We did it the first time — I can get out 50 million payments really quickly, a lot of it into people’s direct accounts,” Mnuchin told reporters then.
If the new bill follows the CARES Act, individuals will be eligible for payments up to $600, but that amount declines for those with an adjusted gross income higher than $75,000 a year. The $600 payment would drop by 5% of every dollar above $75,000, or $50 for every $1,000. The benefit doesn’t apply for individuals with incomes over $99,000.
Married couples with combined incomes up to $150,000 would receive $1,200, subject to the same phaseout that applies to individuals. The payments would be phased out entirely for couples making $198,000 or more. Families also got $500 per dependent child under the age of 16 in the CARES Act, but during negotiations for this bill, those payments could be $600 per dependent.
If the qualifications for the payments remain the same as the CARES Act, many who receive Social Security or Supplemental Security Income (SSI) benefits will also be eligible for full amounts.
But under the CARES Act, those who received payments could owe tax.
“TurboTax has guidance related to stimulus payments and other impacts of Covid-19,” Lisa Greene-Lewis, certified public accountant and TurboTax expert, told CNBC. “It will ask up front if the filer received a stimulus payment and then calculate the Recovery Rebate Credit based on actual 2020 income.”
Yet there is reportedly a credit for which Americans can apply. “The IRS says that eligible individuals can claim the Recovery Rebate Credit on their 2020 Form 1040 or 1040-SR. These forms can also be used by people who are not normally required to file tax returns but are eligible for the credit,” CNBC reported.
Related: Pelosi Repeatedly Refuses To Answer CNN About Why She Rejected Bigger Stimulus Bill Before Election