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irs stimulus checks

Covid-19 has taken the world by storm. In the United States alone, millions are being put out of work and are struggling to keep their heads above water. To remedy this, the government issued a single round of $1,200 stimulus payments. But did this really fix anything?

It may seem strange to complain about a $1,200 check, but with so many people out of work and with families to support, the fact of the matter is this money won’t go very far. To make matters worse, many people have been left still waiting for their checks to arrive, or simply didn’t qualify for one.

This, in combination with other countries seemingly offering much more to their citizens, leaves us all wondering whether or not we’ll be seeing a second round of stimulus payments issued in the near future. After all, Canada is providing their citizens who have been laid off $2,000 per month for four months!

In the United States, there have been three stimulus packages enacted. The stimulus checks qualifying adults received recently were simply one phase of the CARES Act, an unprecedented $2 trillion stimulus package. It is possible that we see a fourth phase of the stimulus agenda that includes a second round of payments, but this is not certain.

Democratic members of the House of Representatives have shown support of this, as well as providing qualifying adults with a system of recurring payments, similar to that of Canada. Their goal is to pass another stimulus package which would include additional aid for local governments, free health care coverage for patients infected with Covid-19, and direct payments to qualifying individuals. Is this even possible given our current political climate though? 

Well, Donald Trump has not ruled out the possibility of a second round of direct payments. In a Coronavirus task force briefing on April 6th, he noted that a “second round of direct (payments)… is under serious consideration.” However, more recently Trump has communicated his preference for payroll tax cuts over direct payments.

So what could the second stimulus plan look like and how close are we to actually receiving another direct payment?

The most likely situation is having the Emergency Money for the People Act, or EMPA, passed. This bill was proposed by Reps. Ro Khanna (D-Calif.) and Tim Ryan (D-Ohio) in mid-April and would provide an ongoing payment of $2,000 per month for a six-month period to those who qualify. Here, the term ‘qualifying’ means U.S citizens and residents over 16 years old who earn less than $130,000 per year. Consistent with the last stimulus plan, this has many contingencies. 

The amount you are given each month is not guaranteed to be exactly $2,000 and rather, depends on adjusted gross income from 2018 or 2019 tax returns and tax filing status. For every $1,000 your taxes indicate your income level is above the threshold, 5% of the payment amount is phased out. In terms of dependents, adults would receive an additional $500 for each child up to a maximum of $1,500. 

The goal of the EMPA is to be more inclusive, especially to demographics that were left out of the first set of payments, and to increase accessibility. If you have not filed taxes in 2018 or 2019, this act would include an application process through the Treasury that would enable you to confirm your eligibility. This, in combination with the plan to distribute funds across a variety of channels, including check, direct deposit, and mobile payment platforms, would make taking advantage of these payments much easier.  

Moreover, students and others who are claimed as dependents would be eligible to receive the payments under EMPA. This was a demographic that the original CARES Act grossly ignored.

There are many other stimulus packages being proposed and spoken about such as the Paycheck Guarantee Act proposed by Rep. Pramila Jayapal (D-Wash.), and the “Heroes Fund” proposed by the Senate Democrats. Unfortunately, all of these are going to require overwhelming support and this may not be in the agenda for the near future. 

As time progresses, it is going to become more and more evident that a second direct stimulus package is necessary. But for now, all we can do is wait and support those who are putting these agendas forward.

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