Home Personal Finance How to prepare for the second coronavirus stimulus check?

How to prepare for the second coronavirus stimulus check?

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A few weeks back, many assumed that coronavirus stimulus checks were a one-time package. However, now, the second coronavirus relief bill is very likely, but how much and when is still uncertain. Irrespective of when the second coronavirus stimulus arrives, it is important that you prepare yourself now to get the money.

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How to prepare for second coronavirus stimulus check?

Preparing yourself means ensuring that you get the money as and when it should arrive. The most important thing that will help you prepare for the second coronavirus stimulus is filing your federal tax returns, if not already done.

The tax filing deadline, which was April 15 this year, has been extended to July 15 by the IRS. It could take weeks before the next relief bill gets approval. Thus, people have enough time to file their tax returns. Doing this, as per the tax experts, would help people with their eligibility for the stimulus payments.

The first stimulus payment was based on past tax returns. And, the next round will also use the tax returns to determine who should get it and how much. If you have already filed your 2019 return, then the government will use it as a base. If not, then your 2018 return would determine how much stimulus amount you get.

In case your income dropped in 2019 and you have filed your tax return, you could get a bigger stimulus check. Also, if you had a child (or another child) last year, then also you would be eligible for more money.

Not all people have to file tax returns, especially those with little to no income. Such people can use the IRS’ non-filer tool to ensure that the IRS has information on them. A point to note is that the IRS not having your information does not disqualify you. You will still get the payment, but it may be delayed.

Even if there is no second round of stimulus checks, experts say filing a return may at least get you a refund. Thus, the more time you take to file your taxes, the more time it would take to get your refund, which a taxpayer could put to use instead of leaving it with the government.

Second stimulus bill: what to expect?

The second round of stimulus is definitely needed to support the faltering U.S. economy. Over 40 million Americans have already filed for unemployment benefits over the past two months. In some states, unemployment has hit 20%, raising pressure on the authorities to come up with a relief package quickly.

Several proposals have come up for the second stimulus package. The most popular so far is the HEROES (Health and Economic Recovery Omnibus Emergency Solutions) Act, which was already approved by the House of Representatives on May 15. This proposal promises a direct payment of up to $1,200 per family member.

Each dependent, including college students, children over 17, disabled relatives and a taxpayer's parent, also qualify for a $1,200 payment. For households (maximum of five members), the HEROES act promises a maximum payment of $6,000.

The HEROES Act also makes non-citizens eligible for the stimulus payment. Under the CARES Act, the U.S. residents are required to have a Social Security number. However, with the HEROES Act, those without a Social Security number can use the individual taxpayer identification number to qualify for the payment.

Further, the HEROES Act also extends the unemployment benefit of $600 per week to January 2021. It also expands the employee retention tax credit to protect jobs. To the states and local governments, the bill promises $1 trillion to pay salaries of the first responders, health care workers, and other essential workers. The bill also proposes $75 billion for expanded testing and contact tracing.

Next relief bill: when to expect it

Democrats have already sent a bill to the Senate, but so far, there hasn’t been any debate on the bill. There is little chance that the HEROES Act will pass in its current form. While President Donald Trump has indicated that the White House is considering a second stimulus check, other Republicans are not too excited about it.

Many Republican politicians believe that instead of approving another round of checks, the focus should be on reopening the economy. In contrast, 84% of Americans say they favor another stimulus check, as per a Bankrate.com survey of nearly 1,500 adults.

Many are optimistic that the second coronavirus relief bill would be announced next month. The Senate is in session until July 3, after which it would go on a two-week break surrounding the Fourth of July holiday. This means there is more than a month to come up with new proposals, debate on the HEROES Act and eventually approve the second coronavirus stimulus package.

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Aman Jain
Personal Finance Writer

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