Whether or not Congress will be able to issue another coronavirus relief package or if there will be another round of direct payments is the biggest question nowadays. Although no one has accurate answers to these questions, there are a few truths about the next round of coronavirus stimulus checks.
Truths about coronavirus stimulus checks
The first truth is that everyone wants to send stimulus checks. “Everyone” here means Republican and Democratic lawmakers and President Donald Trump. Both Republicans and Democrats have included stimulus checks in their proposals, the HEALS Act and HEROES Act, respectively. Although Republicans came up with another proposal that does not include stimulus checks, they are likely to support another round of direct payments.
Another truth about coronavirus stimulus checks is that there is a consensus on the amount of payment that you could get. Both Republicans and Democrats are in favor of sending up to $1,200 stimulus payments. Both the HEALS and HEROES Act have a provision of $1,200 direct payments. However, the two bills differ on payments to dependents.
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The next truth is that eligibility requirements of the second round of stimulus checks will probably cover more people. Although the eligibility guidelines will likely largely be the same as last time, some changes could be made to the eligibility requirements to benefit people. These changes could be in the form of eligibility criteria for dependents.
For instance, the CARES Act included $500 payments to all dependents aged 16 and younger. This excluded those who just turned 17, college students that may still be dependents and other dependents, such as elderly parents. The next package is likely to include all such groups as dependents.
No tax and quick delivery this time
Another truth is if Congress approves another round of coronavirus stimulus checks, the IRS will process the checks much faster this time. The IRS took about 19 days to start sending the first stimulus payments. This time, the agency could take less time as it already has a plan and the needed infrastructure in place.
Treasury Secretary Steven Mnuchin also recently admitted that the agency could send the payments just a week after the bill is approved.
“I could get out 50 million payments really quickly,” Mnuchin said last month.
The next truth is that you won’t have to pay any taxes on the stimulus payment you may get. This stimulus money is not income, but rather, a credit. For tax purposes, this payment won’t reduce your tax refund or increase your tax liability when you file your 2020 tax return. You also won’t have to return any part of the payment if you are eligible for a lower amount based on your 2020 tax return. However, you could claim the extra amount next year if you got less based on your 2020 tax return.