Can Americans Expect Stimulus Checks In 2022 Experts Weigh In
The year opened with a debate over the American Rescue Plan, which would go on to boost household income by $1,400 $5,600 for a family of four through a third round of direct Economic Impact Payments. Now that the year is over, the big question is whether 2022 will see a fourth round of payments, even if the checks arent as big.
GOBankingRates asked the experts, and the answer is that it depends who you are, where you live, what you do and the political headwinds that are standing in the way.
Child Tax Credit: July 15 Deposits
Some families received another form of stimulus aid on July 15 when the IRS deposited the first of six monthly cash payments into bank accounts of parents who qualify for the Child Tax Credit . Families on average received $423 in their first CTC payment, according to an analysis of Census data from the left-leaning advocacy group Economic Security Project.
Eligible families will receive up to $1,800 in cash through December, with the money parceled out in equal installments over the six months from July through December. The aid is due to the expanded CTC, which is part of President Joe Biden’s American Rescue Plan.
Families who qualify will receive $300 per month for each child under 6 and $250 for children between 6 to 17 years old. Several families that spoke to CBS MoneyWatch said the extra money would go toward child care, back-to-school supplies and other essentials.
Families may enjoy more of a tax break in coming years, if Mr. Biden’s American Families Plan moves forward. Under that plan, the Child Tax Credit’s expansion would last through 2025, giving families an additional four years of bigger tax breaks for children.
Fourth Stimulus Check: Are More Payments Coming
A fourth stimulus check from the government could take one of two forms: monthly checks in fairly small amounts, or one-time payments of up to $2,000.
Both options have been put forward by legislators in Congress as follow-ups to the third round of pandemic relief payments, which were made possible by the American Rescue Plan Act of March 2021.
The U.S. economy is still recovering, with slow but steady job growth even as unemployment numbers hold steady and the Delta variant of COVID-19 causes hospitalization rates to soar.
The federal moratorium on evictions ended Aug. 26 with a Supreme Court ruling, and millions now face losing their homes. Inflation, however, appears to be on the rise, contributing to fears among economists and lawmakers that further stimulus payments could only fuel more price hikes.
As a result, there’s no legislation in Congress that’s likely to pass that would create a fourth round of stimulus payments, even though some Democratic lawmakers have called on President Joe Biden to consider recurring payments.
The White House has passed back the buck, stating that the president would consider whatever Congress comes up with.
At the end of July, Rep. Ilhan Omar , introduced a bill that would send $1,200 to each American making less than $75,000 per year, forever. But it has not moved forward in the House of Representatives and has little chance of passing.
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Parents Can Expect More Checks On These Dates
Although parents have long been entitled to a Child Tax Credit, it was previously worth $2,000 per child at most — and only $1,400 of it was refundable. That meant the only people who got the full credit were those who had a tax liability of at least $2,000 since the tax credit couldn’t reduce your tax balance below $0. The credit was also claimed when filing your taxes, so it didn’t provide much help throughout the year.
Now, the expanded Child Tax Credit is delivered on a monthly basis. And it’s for a lot more money — up to $3,600 per child under age 6 and $3,000 for kids ages 6-17. The full amount is refundable, so even parents with limited tax burdens can get the money. The payments for the expanded credit started getting deposited into people’s bank accounts on July 15 and eligible families received the money already for July, August, September, and October.
The expanded Child Tax Credit payments will continue through the end of 2021. And, together, all of these monthly deposits will deliver half the credit this year, with the rest claimable when you file your 2021 tax return in 2022. The expanded Child Tax Credit is currently scheduled to continue only for this year, but lawmakers are trying to extend it so there’s a chance that monthly payments will continue next year if this happens.
Still Living Paycheck To Paycheck
Some top economists have called for more direct aid to Americans. More than 150 economists, including former Obama administration economist Jason Furman, signed a letter last year that argued for “recurring direct stimulus payments, lasting until the economy recovers.”
Although the economy is improving, millions of people continue to suffer from reduced income and have not been able to tap government aid programs, Nasif said. Only 4 in 10 jobless workers actually received unemployment aid, according to a from economist Eliza Forsythe.
Many people never applied for unemployment benefits because they didn’t think they were eligible, while others may have given up due to long waits and other issues.
“You’ll see reports about how the economy is starting to grow, but there are a lot of Americans living paycheck to paycheck, and for a lot of them the government relief programs haven’t been able to help,” said Greg Nasif, political director of Humanity Forward.
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Do Americans Really Need The Money
Signs point to millions of households facing rising financial hardship as the pandemic worsens, which is causing some businesses to lay off staff and cut back hours.
In December, hiring around the U.S. fell for the first time in seven months, as the virus weighed especially hard on restaurants, bars and other service-related businesses. The financial need is greatest among lower-income households, with new research finding that families earning less than $78,000 spent the latest $600 stimulus checks quickly. But households earning more than $78,000 have largely socked away the $600 payments, according to a study from the Opportunity Insights Economic Tracker, a nonprofit research group led by Harvard economics professor Raj Chetty.
Yet almost half of households with incomes above $150,000 said they needed the stimulus checks for financial stability, according to a recent survey from Credit Karma. Almost 6 in 10 of all U.S. households are facing financial hardship, TransUnion found in a November survey.
The additional stimulus funds “will be essential to the financial stability of many Americans, including those who appear to be higher earners,” Colleen McCreary, chief people officer at Credit Karma, told CBS MoneyWatch. “As the pandemic drags on, Americans are continuing to feel the financial crunch.”
With reporting from the Associated Press.
Calculating Your Third Stimulus Check Amount
Under the American Rescue Plan, every eligible person will receive a $1,400 third stimulus check “base amount.” For married couples that file a joint tax return, the base amount is $2,800. Then, for each dependent in your family, an additional $1,400 will be tacked on.
But not all people will receive the full amount. As with the first two stimulus payments, third-round stimulus checks will be reduced potentially to zero for people reporting an adjusted gross income above a certain amount on their latest tax return. If you filed your most recent tax return as a single filer, your third stimulus check will be phased-out if your AGI is $75,000 or more. That threshold jumps to $112,500 for head-of-household filers, and to $150,000 for married couples filing a joint return. Third-round stimulus checks will be completely phased out for single filers with an AGI above $80,000, head-of-household filers with an AGI over $120,000, and joint filers with an AGI exceeding $160,000.
You can use our handy Third Stimulus Check Calculator to get a customized estimated payment amount. All you have to do is answer three easy questions.
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Qualifying For Recovery Rebate Credit
Should you qualify for the Recovery Rebate Credit, you are able to claim the child on your 2021 tax return, which will be completed in 2022.
Those who qualify for an additional payment via the American Rescue Plan will be able to have the credit arrive as part of their 2021 refund.
In order to qualify, dependents must be under 19 at the end of the year unless they are a student, or any age but are permanently disabled. In addition, the dependent must be a child, brother, sister, foster child, stepbrother, stepsister, half-brother or half-sister, or a descendent of any of them.
There are some income requirements that must be met to receive the Recovery Rebate Credit payment, though, as taxpayers can receive the full amount if they have an adjusted gross income under $75,000, or an income of $150,000 and are married and filing jointly.
How Much Will I Get
The third coronavirus stimulus package calls for individual payments of $1,400 to each qualified adult and $1,400 to each dependent.
Single taxpayers will receive the full $1,400 payment with a 2020 adjusted gross income of $75,000 or less. For couples, its $2,800 with an AGI of $150,000 or less. If you havent filed your 2020 taxes by the time checks go out, then your stimulus will be based on your 2019 AGI. The amount you receive will phase out and disappear at $80,000 for an individual and $160,000 in the case of a joint return.
After passage by both houses of Congress, President Biden signed the legislation into law on March 11, 2021. Direct payments of $1,400 to individuals are expected to begin within days of the legislation becoming law.
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How To Qualify For 2022 Stimulus Payment
Americans will qualify for payments up to $1,400 from the third round of stimulus checks people received in March 2021.
- The income requirements are still $150,000 for married people or $75,000 for individuals.
- Eligible new parents must inform the IRS that they had a baby when they file their 2021 taxes in 2022 to receive the stimulus checks for those babies, according to Moneywise.
- These parents may also qualify for the expanded child tax credit program, too, which allows families to receive paychecks every month.
1 major reason there could be a fourth stimulus check
Check The Status Of Your Third Economic Impact Payment
All Third Economic Impact Payments must be issued by Dec. 31, 2021 in accordance with the American Rescue Plan Act of 2021, signed into law on March 11, 2021.
The IRS mailed Notice 1444-C to people who received a third Economic Impact Payment. You should keep this letter with your tax year 2021 records.
Check when and how your payment was sent with the Get My Payment tool.
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What Impact Will Tax Season Have On My Stimulus Payment
Taxes for 2020 are due on May 17, 2021 . The IRS began accepting tax returns on Feb. 12, 2021. This means your third-round stimulus payment could arrive in the middle of tax season. This alone creates questions such as Do I need to file my 2020 taxes right away? Will the IRS accept my 2019 income? and, of course, Does this mean stimulus payments will be delayed?
Due to the winter storms that hit Texas, Oklahoma, and Louisiana in February 2021, the IRS has delayed the 2020 federal individual and business tax filing deadline for those states until June 15, 2021.
In answer to the first two questions, you dont need to file your 2020 taxes right away, but depending on your income in 2019 and 2020, you may want to. The IRS will use the latest year they have on file when your stimulus is processed. This means if all they have is your 2019 return, then thats what they will use if you earned less in 2020, then it could be better for you if that number is used.
While its possible that your stimulus check or even tax refund check could be delayed this year, according to the IRS, the additional programming and testing that resulted in the late Feb. 12, 2021, start date for tax season makes that unlikely.
Didn’t Get The Full Third Payment Claim The 2021 Recovery Rebate Credit
You may be eligible to claim a Recovery Rebate Credit on your 2021 federal tax return if you didn’t get a third Economic Impact Payment or got less than the full amount.
In early 2022, we’ll send Letter 6475 to the address we have on file for you confirming the total amount of your third Economic Impact Payment and any plus-up payments you received for tax year 2021. You will need this information to accurately calculate your 2021 Recovery Rebate Credit when you file your 2021 federal tax return in 2022.
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Who Is Eligible For The Next Stimulus Check
While there was talk of lowering income thresholds for the next stimulus check, they stayed the same in the most recent draft of the bill. However, college students and disabled adults may be eligible to receive the payment, unlike the previous checks. You will remain eligible for the full $1,400 payment if your income is below the following thresholds:
- $75,000 if filing single
- $150,000 if filing jointly
- $112,000 if filing as head of household
The previous two checks phased out individuals decreasing the payment by $5 for every $100 his or her income went above the thresholds. This system allowed those individuals to remain eligible for a partial payment, but that may change with the next stimulus check as those who make more than the following may not be eligible:
- $100,000 if filing single
- $150,000 if filing as head of household
When To Expect Your Next Stimulus Check
The best predictor of how quickly you might see your next check is how quickly the first two arrived in your bank account or mailbox. It took the IRS a mere 19 days after the first stimulus bill’s passage to send out millions of checks. When tasked with sending another round in December, the IRS was again able to pull it off in less than three weeks.
Congress is under a deadline, with existing pandemic benefits set to lapse in mid-March. In short, if they don’t have another stimulus package passed by then, millions of their constituents are going to lose benefits that are helping them put food on the table and a roof over their heads. That’s going to be a tough sell back home.
If Congress votes a package through by the end of February, that means that checks should be in millions of accounts by the third week of March. If passage comes in the 11th hour , that pushes the expected date back to the first week of April.
These estimates are based on the supposition that the IRS can manage a quick turnaround in the heart of tax season. At this point, there is nothing to indicate that they can’t pull it off.
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When Are You Likely To Get Another Stimulus Check
After the House, the action shifts to the Senate, where Democrats hold power by the slimmest possible margin and will need every vote from their side. But West Virginia Democratic Sen. Joe Manchin is a big question mark.
Manchin has voiced support for dropping the income limit for stimulus checks. Individuals earning up to $75,000 were eligible for a full payment in the last two rounds, but Manchin has said he wants proof that someone making $75,000 is needy enough to receive the entire $1,400 this time.
If Democratic Senate leaders can keep Manchin in the fold, they may try to send the legislation directly to the Senate floor with no committee votes, according to the Washington newsletter Punchbowl News.
Speaker Pelosi says the goal is to have a bill on the president’s desk in time to avoid a lapse in bonus unemployment money for millions of Americans. The existing federal booster benefits expire on Sunday March 14 .
Provided there are no unexpected roadblocks and Biden is able to sign the bill during the first part of March the IRS could start churning out stimulus check payments within days. That means you might receive your next infusion of cash as soon as mid-March.
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Families get monthly payments worth up to $300 per child for those under the age of six and $250 for dependents between the ages of six-17.
But, the amount depends on how old your kids are and how late you started claiming the advance tax credits.
Read our stimulus checks live blog for the latest updates on Covid-19 relief…
Families that have recently signed up for advance child tax credits could receive monthly payments of $600.
Parents will receive up to $1,800 this year before claiming the remaining amount when tax returns are filed in 2022.
Child tax credit payments are based on Americans’ previous tax returns but the program is open to low-income earners.
Single Americans do not have to file a tax return if they earn less than $12,200 a year.
There is the option to opt-out of advance child tax credit payments and its advised parents unsubscribe if they are worried about owing money to the IRS.
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