(CBS Detroit) – A third stimulus test seems more and more certain by the day. As the economic toll of the ongoing COVID pandemic continues to rise, President Joe Biden and politicians on both sides of the aisle are supporting putting more money in the pockets of Americans as soon as possible. While a relief probably seems, how much and when there is still doubt left.
A $ 1,400 stimulus test is part of the $ 1.9 billion aid package proposed by the Biden administration. The U.S. bailout plan, in its current form, would also include more unemployment benefits, an improved child tax credit and additional assistance to millions of Americans in severe economic distress as a result of the ongoing COVID-19 pandemic. Democrats control both houses of Congress and have indicated they are willing to apply stimulus legislation to a straight party vote if they have to. They also paved the way for the reconciliation of the budget, which would enable them to circumvent the filibuster in the Senate and pass stimulus by a simple majority.
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The $ 1400 top-notch number that got so much attention seems destined to become a reality. But the actual amount that people’s bank accounts reach can change based on the income threshold, the number of dependents and other factors.
Last week, a group of ten Senate Republicans submitted a $ 618 billion counter-offer to the U.S. bailout plan. Their package reduces the direct payment to $ 1,000 and limits the annual earnings for recipients to $ 40,000, after which the stimulus check amount will incrementally drop to $ 0. Late last week, the president rejected the idea of reducing the amount. “I’m not cutting the checks,” Biden stressed Friday. ‘They will be $ 1400 a month. This is what the American people have been promised. ”
However, the idea of lowering the annual income requirement has gained some steam.
The previous two stimulus checks were phased out for individuals with an adjusted gross income (AGI) of more than $ 75,000 per year and married couples with an AGI of more than $ 150,000. (AGI is the total of your wages, interest, dividends, maintenance, retirement benefits and other sources of income minus certain deductions, such as student loan interest, maintenance and retirement contributions.) For every dollar of income that is above the threshold, the previous two incentive payments are decreased five percent. Thus, the amount of $ 1,200 of the CARES law paid up to $ 0 for income over $ 99,000 ($ 198,000), and the $ 600 of the second stimulus shrank to $ 0 for income over $ 87,000 ($ 174,000).
The Biden administration is considering lowering the revenue threshold to $ 50,000 ($ 100,000). Suppose the same five percent formula, a payment of $ 1,400 ($ 2,800) would actually be $ 700 ($ 1,400) at an annual income of $ 64,000 ($ 128,000) and $ 0 at an annual income of $ 78,000 ( $ 156,000).
The thinking behind this kind of change is to ensure that more money is spent in the broader economy rather than saving. According to a survey by the Federal Reserve Bank of New York, the average percentage of the first stimulus payment a household spent on necessities declined as incomes rose. The average percentage of the first stimulus payment a household saved increased as income increased. While reducing the income threshold will better target the economy, it will also reduce the number of people receiving a third stimulus check and the amount received by others.
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A recent Democratic proposal kept the revenue threshold at $ 75,000 ($ 150,000) and set the upper limit at $ 100,000 ($ 200,000). Under this setup, $ 1,400 ($ 28,000) as revenue rose to $ 100,000 ($ 200,000). The case remains very definite.
Dependent children can also affect the size of your next stimulus test. The second stimulus test included $ 600 per dependent child. A dependent child is defined as someone under the age of 17 living in your household. There was no limit to the number of children. And for the phasing out, that $ 600 was added to the total for the adult (s). As an example, one adult who had two children would receive $ 1,800 in January if her AGI was less than $ 75,000. The amount would have decreased at an AGI from $ 87,000 to $ 1200; $ 600 at an AGI of $ 99,000 and $ 0 at an AGI of $ 111,000.
The U.S. bailout plan seeks to expand the pool of dependent dependents to those over the age of 16. The group will include students and older adults with certain types of disabilities. Such a change could allow an estimated 13.5 million more people to receive stimulus checks.
The amount of a third stimulus test can also be affected by taxation of a recipient. To expedite the distribution, the Internal Revenue Service used the most recent tax documents to determine AGI and therefore its suitability for it. AGI changes from year to year as people receive increases, change jobs or become unemployed. The first relief payment was accepted in March 2020. At that point, some people filed their taxes for 2019 and others did not. The check amount could therefore be based on tax from 2018 or 2019. The second relief payment became law in December 2020, after everyone submitted their tax on 2019. The amount was therefore determined by the 2019 tax filing.
The third relief payment can be signed early to mid-March 2021. Some people have filed taxes for 2020 at that point. Others will not. This means a third payment can be based on taxes on 2019 or 2020. In recent years, there has been significant unemployment, which often harms the finances of individual households. If one’s AGI changes significantly from tax to tax, the amount of their next stimulus can also check.
When can that third stimulus check show up? The government’s goal is to sign the US rescue plan by March 14. This is also when the current $ 300 federal unemployment benefit bonus expires. Assuming President Biden can sign the aid package on March 14, direct deposits are likely to start the week of March 22, with checks starting the week of March 29.
However, House Speaker Nancy Pelosi appears to have an even more aggressive timeline. According to comments made last Friday, she intends to pass the US rescue plan within two weeks. The Senate could then pass it on to a straight party vote. In this scenario, the stimulus package could be through Congress by February 26 and signed on March 1. Direct deposits will start in bank accounts by March 8, and the checks will be posted on March 15. The timeline could be extended, due to the ongoing accusation hearing in the Senate or for some reason.
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Originally published at 14:46 ET on Thursday, February 11, 2021.