Stimulus Checks In Practice
The U.S. government used stimulus checks during the 2008 Global Financial Crisis2008-2009 Global Financial CrisisThe Global Financial Crisis of 2008-2009 refers to the massive financial crisis the world faced from 2008 to 2009. The financial crisis took its toll on individuals and institutions around the globe, with millions of American being deeply impacted. Financial institutions started to sink, many were absorbed by larger entities, and the US Government was forced to offer bailouts. It distributed the checks to keep the unemployment rate below 8%. The checks were sent out to individuals with at least $3,000 of qualifying income.
In 2020, with the outbreak of COVID-19 and the subsequent shutdown of many economic activities, the U.S. once again presented a stimulus check to consumer households.
What To Do If You Cant Find Your Stimulus Check
If your IRS online account shows that you should have received a stimulus payment, but you didnt get it, theres a chance it could have been lost in the mail. Or you might have thrown away the prepaid debit card you received.
If you lost your stimulus check or suspect it was stolen, you can request the IRS trace your payment. If the IRS determines your check hasnt been cashed, it will issue a credit to your account. It cant reissue your payment, but you can claim the payment on your 2021 tax return using the Recovery Rebate Tax Credit worksheet.
If a trace is initiated and the IRS determines that the check wasnt cashed, the IRS will credit your account for that payment. However, the IRS cant reissue your payment. Instead, you will need to claim the 2021 Recovery Rebate Credit on your 2021 tax return if eligible.
If you lost your EIP card, a prepaid debit card on which some individuals received their stimulus payment, contact card issuer MetaBank to request a replacement.
How Have Americans Spent Their Stimulus Checks
There have been threecount themthree wide-reaching stimulus checks from the government since the pandemic hit. And now that a good chunk of time has gone by since they dished out the first one, were starting to see how people spent that money. Our State of Personal Finance study found that of those who got a stimulus check:
- 41% used it to pay for necessities like food and bills
- 38% saved the money
- 11% spent it on things not considered necessities
- 5% invested the money
And on top of that, heres some good news: Data from the Census Bureau shows that food shortages went down by 40% and financial instability shrank by 45% after the last two stimulus checks.24 Thats a big deal. But the question here isif people are in a better spot now, will they be more likely to manage their money to make sure things stay that way?
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When Will A Second Stimulus Check Be Issued
The government began sending direct deposit payments on December 28, 2020. Paper checks were sent out starting on December 30, 2020.
Payments are automatically sent to:
- Eligible individuals who filed a 2019 tax return.
- Social Security recipients, including Social Security Disability Insurance , railroad retirees, and Supplemental Security and Veteran Affairs beneficiaries.
- Individuals who successfully registered for the first stimulus check online using the IRS Non-Filers tool or who submitted a simplified tax return that has been processed by the IRS
There is no action that you have to take to get your second stimulus check. People who provided their banking information with the IRS shouldve received their stimulus checks by direct deposit. Social Security and Veterans Affairs beneficiaries who received the first payment via Direct Express shouldve received the second payment the same way.
The IRS sent paper checks or prepaid debit cards to people who did not provide their banking information. Mailed payments may be delivered in a different format than the first stimulus check.
All second stimulus checks were issued by January 15, 2021. If you didnt get a second stimulus check by then , you can claim your second stimulus check as the Recovery Rebate Tax Credit on your 2020 tax return or use GetCTC.org if you dont have a filing requirement.
By Bethany K. Laurence, Attorney
Who Is Eligible For A Stimulus Check
The vast majority of Michigan residents are eligible to receive a stimulus check from the federal government this year. Even if you have no income, you are still eligible, but need to take action to receive your stimulus payment. This includes individuals with low or no earnings who normally don’t file taxes. Every American adult earning less than $75,000 is eligible for a stimulus check from the federal government this year. While this site is geared toward Michigan residents, the information is applicable nationwide.If you still have questions about your stimulus check after reviewing this website, call the IRS at or, United Way at .
After you sign up, make sure to add your account information on the IRS website. If you dont want to sign up for a bank account, you can also link to your prepaid debit card instead.You can also receive your funds through the Cash App, by providing the IRS with the routing and account numbers connected to your Cash App. You can download the Cash App or locate your Cash App account information here.
What if I havent filed taxes?
What if I dont qualify – where else can I get help?
If you dont qualify for the stimulus payment, we recommend reaching out to Michigan 2-1-1. They can connect you to resources in your community.
Will my payment be reduced or offset if I owe tax, have a payment agreement with the IRS, owe other Federal or State debt, or owe other debt collectors?
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What If My 2018 Income Qualifies But My 2019 Income Doesn’t
The IRS bases the amount of your payment on the AGI listed in your most recent tax return: 2018 or 2019. In some cases, when your income changed between 2018 and 2019, your 2018 income might qualify for a larger payment than your 2019 payment, or perhaps it might qualify for any payment while your 2019 does not.
In that case, because the IRS has extended the federal tax filing and payment deadline to July 15 , you couldhold off filing your 2019 income taxes until after the IRS has issued your payment, forcing the organization to use your 2018 income for your payment.
Waiting to file has a few downsides, like waiting longer to get your refund and giving identity thieves more time to try to prey on your taxes. But Riley Adams, a public accountant, previously told Business Insider if you’d qualify for a stimulus check under your 2018 income but not at all under 2019, it might be worth holding off filing for a few weeks until you get your relief payment.
Did You Miss The Deadline To Register Online For The First Stimulus Check
You may still be eligible to receive a payment in 2021 if:
- You did not register online, by mail and did not get a payment in 2020. OR
- You received a payment, but it wasnt the full amount of the Economic Impact Payment. The maximum credit is $1,200, or $2,400 if married filing jointly, plus $500 for each qualifying child.
Then:
When you file a 2020 Form 1040 or 1040SR you may be eligible for the Recovery Rebate Credit. Save your IRS letter Notice 1444 Your Economic Impact Payment with your 2020 tax records. Youll need the amount of the payment in the letter when you file in 2021.
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Who Gets A Stimulus Check
Stimulus checks are available to eligible U.S. individuals with Social Security numbers. However, eligibility rules vary depending on the checks.
For the first two payments, anyone claimed as a dependent wasn’t eligible for their own check. However, individuals who claimed dependents under 17 could receive a payment for them. The third check still prohibits dependents from claiming their own checks. However, individuals who claim dependents can now receive a payment for adult dependents as well as for dependent children over age 17.
There are also income limits. Each of the three checks is available in full to single tax filers with an income under $75,00. Heads of house with an income under $112,500 are also eligible, as are married joint filers with an income under $150,000. However, phase-out rules — the level at which high earners lose eligibility for checks — differ for each payment, as we’ll discuss in more detail below.
The IRS utilized tax return information from 2018 or 2019 to determine income and eligibility for the first two checks. It will use tax return information from 2019 or 2020 to determine income and eligibility for the third payment. The agency also obtained information from the Social Security Administration and VA to send payments to benefits recipients who don’t file tax returns. And it established an online form for non-filers to claim their payments.
What Else Is Included In Bidens Stimulus Package
Like we talked about before, the presidents American Rescue Plan is full of big changes. It includes some of the proposals Biden campaigned on. Heres a quick rundown:
- Increase the Child Tax Credit from $2,000 for dependents under the age of 17 to $3,000 for children ages 617 and $3,600 for children under age 6.
- Increase the Child and Dependent Care Tax Credit from a max of 35% of qualifying childcare expenses to a max of 50% of qualifying expenses .
- Keep weekly unemployment benefit payments under the Federal Pandemic Unemployment Compensation program at $300 and extend benefits under the Pandemic Emergency Unemployment Compensation program through September.
- Extend the payment relief for federally guaranteed mortgages as well as the suspension on evictions and foreclosures until September.
- Provide financial support for renters and landlords.14, 15
And theres more: Bidens plan also includes grants and loans for small businesses, aid to state and local governments, money for COVID-19 vaccine distribution and testing, money to reopen schools, support for colleges and childcare providers, and more paid sick time for folks who have COVID-19, are quarantining because of it, or are caring for family members who are sick.16
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How Much Will My Stimulus Check Be
The amount of your stimulus checks varies depending on your family status and income.
The first stimulus check was worth up to $1,200 per eligible adult and $500 per dependent child under 17. Single adults received as much as $1,200. Married couples with no children got up to $2,400. Married couples with two children received up to $3,400.
If your income exceeds $75,000 as a single filer, $112,500 as a head of household, or $150,000 as a married joint filer, your check amount was reduced at a rate of $5 per extra $100 earned. So if you made $76,000 as a single filer, your check would be reduced by $50.
Eligibility phased out for single filers with incomes above $99,000, heads of household with incomes above $136,500, and married joint filers with incomes above $198,000 for their own payments. However, some still received dependent payments. Married joint filers with two children and $199,000 in income would lose their own $2,400 payments but receive $950 of the $1,000 in dependent payments.
The second check provided $600 per eligible adult and child dependent. The phase-out rules worked the same way. However, because the check was for a smaller amount, eligibility disappeared entirely at a lower income threshold. Singles with incomes above $87,000 received no payment. Nor did heads of household with incomes above $124,500 — unless they received some dependent funds. And married joint filers lost eligibility for their own payments at $174,000.
Will There Be More Stimulus Checks In Future
As things currently stand, a fourth federal stimulus round appears to be unlikely.
Currently, Mr Biden’s Build Back Better Agenda does not include stimulus payments.
And in May, White House secretary Jen Psaki told reporters that the stimulus checks were not free and that another round wasnt in Bidens plans.
Along with getting Biden on board, two corporate Democrats Joe Manchin and Kyrsten Sinema would need to get convinced as well.
This is unlikely because the US is no longer in the heights of the pandemic and is dealing with inflation, as there is huge consumer demand that the supply is not meeting.
Stimulus checks serve the purpose of giving taxpayers a financial boost during an economic downturn.
And that isn’t happening at the moment.
But there has been some mounting pressure to do so 50 Democratic members of the House of Representatives wrote a letter suggesting recurring direct checks, also known as universal basic income.
It read: Another one-time round of checks would provide a temporary lifeline, but when that money runs out, families will once again struggle to pay for basic necessities.
“One more check is not enough during this public health and economic crisis.
It was backed by US Representative for New York Alexandria Ocasio-Cortez and Minnesota’s Ilhan Omar.
Democrats have backed a figure of $2,000, although there aren’t currently any official bills debating a fourth round of checks.
We explain how to track down the latest $1,400 stimulus check.
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People With Unpaid Debts
People who have unpaid private debts excluding outstanding child support payments or tax debts could be at risk for having their stimulus checks garnished.
That’s due to the fact that lawmakers used a process known as budget reconciliation to pass the coronavirus relief package which limited their ability to prevent garnishment of the payments. However, banking and consumer trade groups have called for follow-up legislation to change that.
What If I’m A Us Citizen Who Lives Abroad
American citizens who live in another country are eligible for a stimulus payment. Unfortunately, the IRS online tools do not support foreign address or non-US banks, so some expats are experiencing delays in receiving their payment by direct deposit, the fastest delivery method.
If you qualify for a payment but the IRS does not have your bank account information from a previous tax return or you use a non-US bank you’ll be sent a paper check or prepaid debit card to your last known address.
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What If I Get My Stimulus Check And It’s Too Big
You don’t need to do anything.
Technically, this payment is a tax credit. A tax credit reduces your tax bill on a dollar-for-dollar basis. It is one of the last steps in calculating your annual tax liability and can be claimed regardless of whether you itemize your deductions. Some tax credits, like the coronavirus recovery rebate, are refundable. That means you’ll still get the money even if you don’t have enough tax liability to offset it.
There aren’t any clawback provisions outlined in the law, so you wouldn’t be expected to repay any of the money if you wind up getting too much.
How Is Your Income Calculated For The Stimulus Payments
The IRS will use the AGI on your most recent processed tax return on file. While 55.7 million Americans have already filed their taxes for 2020, millions still havent filedand the IRS is also significantly behind on processing tax returns.
The IRS will use your 2020 tax return if it has been processed by the date they submit your check. If your 2020 return is not available yet, they will use the information from your 2019 tax return.
Note: On March 17, the IRS announced an extension to file your 2020 taxes. Tax returns will now be due by May 17. But if you expect that you may receive more in stimulus money based on your 2020 taxes, and you have not yet received confirmation of your stimulus payment status , you should file as soon as possible.
If you are not required to file your taxes and successfully used the IRSs non-filers tool or completed a special simplified tax return in 2020, no action is needed on your part to receive your payment.
If you do not qualify based on your 2019 income, but you will qualify based upon your 2020 income, consider filing your taxes as soon as possible. Depending on your timing, your stimulus eligibility may be determined before your 2020 tax return is processed. However, the law includes a provision to make supplemental payments in September to ensure people who qualify do not need to wait until the 2021 tax season.
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What If I Filed My Taxes For The First Time In 2020
First-time taxpayers may face additional delays in receiving their stimulus payments.
Before the IRS can issue these stimulus checks, they must receive and process your 2020 tax return. However, due to new tax codes and more complicated tax filings this year , as well as processing stimulus payments, the IRS is backlogged. There are already 6.7 million returns yet to be processed, which is significantly higher than the nearly 2 million delayed returns at this point last year.
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The IRS has said that it continues to process tax refunds while it processes stimulus payments. If you have not filed your 2020 taxes and anticipate a refund, the IRS recommends filing electronically and providing your direct deposit information. According to the IRS.gov, IRS issues more than 9 out of 10 refunds in less than 21 days.
However, the Washington Post reported that some people who filed on Feb. 12 are still waiting for their returns to be processed.