President Donald Trump on Friday signed a $2 trillion stimulus billthat would cut $1,200 checks to many adults, expand unemployment insurance payments and extend loans to businesses, all in an effort to combat the coronavirus outbreak’s toll on the economy. Trump signed the bill hours after the House of Representatives passed the legislation in a voice vote. Senators unanimously passed the meaure on Wednesday.
The bill will also allocate $350 billion in loans to small businesses to help keep them afloat during the weeks (or more) when many businesses are closed in an effort to stop the spread of the novel coronavirus. It will also give $100 billion to help hospitals that are either struggling to cope with the influx of patients or braced for a surge in coronavirus patients. The government will also provide a $500 billion fund, which will include $46 billion for commercial airlines, among other industries, and $454 billion for the Federal Reserve to leverage businesses, states and municipalities.
As for consumers, Treasury Secretary Steven Mnuchin on Wednesday said that direct payments to many Americans under the stimulus bill would come within three weeks. Other commentators have said it may take longer than that. You can read text of bill here. Here some specifics on the “recovery rebates” in the bill:
Taxpayers making $75,000 and below will receive a $1,200 check. Married couples making $150,000 and below will receive $2,400. Individuals and couples under this earnings cap would also receive $500 per child. “For the vast majority of Americans, no action on their part will be required in order to receive a rebate check,” according to the bill analysis from Grassley’s office.
Approximately 140 million households will receive a direct rebate, according to estimates from the Tax Foundation, a right-leaning think tank. That’s about 93% of all taxpayers, according Erica York, an economist at the think tank. The IRS received 155.7 million individual returns during the last tax year, according to the tax collector’s statistics.
The money does not count as taxable income. A Republican Finance Committee aide said also said people filing as “head of household” on their taxes – meaning they are unmarried, have children or dependents and pay more than half of their household expenses — will get the $1,200 check if making $112,500 and below.
The earnings threshold is measured by adjusted gross income. That is, gross income, minus adjustments. The IRS will either use a taxpayer’s 2018 return or their 2019 return, which are the filings due in the current tax season, to determine the size of the rebate check. (On the 2018 returns, the adjusted gross income number is on Box 7 in a person’s 1040 form. On the 1040 form for the 2019 returns, adjusted gross income is found on Box 8b.)
Those receiving Social Security benefits will be eligible, according to an analysis of the bill from Sen. Charles Grassley, a Republican from Iowa. Green card holders, in addition to citizens, qualify for the check, the Republican Finance Committee aide noted.
The checks phase out for incomes above $75,000 a year. That’s capped for individuals making above $99,000 a year. For married couples, income of $198,000 a year is the cap and, for people filing as the head of household, it’s $146,500 a year, according to the analysis from Grassley’s office.
Rebates decline $5 for every $100 above the annual $75,000/$150,000 income ceiling. The rebate decreases at the same rate for children in households above the threshold, York said.
The average rebate check will work out to $1,523, according to Tax Foundation estimates. If a taxpayer’s previous tax returns put them above the income threshold, but in the coming year they will make below that limit, York said the IRS will apply the rebate next tax season. “They’ll be made right when they file their 2020 tax return,” York said.
See also: What the $2 trillion stimulus package means for you and the economy
On the flip side, suppose a taxpayer now qualifies for the payment and gets the check. But then that person’s earnings this year end up exceeding the income cap. The IRS will not claw back that money come next tax season, York said.
The IRS will transmit the payment via a direct deposit. It will use the bank-account information from the taxpayer’s 2018 or 2019 return. Tax season for the 2019 return is open until July 15. The Treasury Department pushed back both the income tax payment and filing deadlines from April 15 to July 15 to free up cash individuals and businesses might need now.
The IRS on Thursday created a link where the agency says it will provide updates about the stimulus payment checks.
Coronavirus had infected at least 105,573 people in the U.S. as of Saturday lunchtime and killed at least 1,711 people, 450 of which were in New York City, according to Johns Hopkins University. The U.S. accounts for 17% of the global total, while New York State accounts for roughly 50% of the U.S. total. Worldwide, there were 621,636 confirmed cases of the virus and 28,658 reported deaths.
div > iframe { width: 100% !important; min-width: 300px; max-width: 800px; } ]]>
Add Comment