As of the beginning of October, Congress has yet to pass another stimulus bill, which would provide direct payments to many Americans. However, with both Democrats and Republicans agreeing that we do need another rescue bill, it is possible we will witness continued negotiations leading to a final bill before the end of the year.
So, what’s the holdup? Both parties agree that another stimulus bill is necessary, but they still disagree over the final price tag for the package. At the end of September, Democrats introduced a revised bill worth $2.2 trillion. Republicans favor spending about $1 trillion less, citing concerns over high unemployment checks encouraging continued absence from the workforce.
How much stimulus is possible? Currently, Democrats are pushing for a stimulus worth $1,200 per family member, limited to three qualifying children. Republicans favor a $1,200 payment for adults, plus payments of $500 for each dependent (unlimited). The last round of stimulus payments did not include children over the age of 16 and dependent adults.
The stimulus will likely be phased out at higher annual incomes, as required under the last bills. For single taxpayers, the phase-out begins at $75,000 and goes up to $99,000, whereas married taxpayers see reduced stimulus beginning at $150,000 going up to $198,000.
When would stimulus payments arrive? Now that most of the problems within the payment system have been resolved, stimulus payments could begin arriving within a week of the President signing a new bill. As before, the process of sending out all payments could take a few weeks. As before, problems on some prior year tax returns (or absence of a return) could prevent some Americans from receiving their check in a timely fashion.
Those who are still waiting on their first stimulus check should contact the IRS to resolve any problems with prior year tax returns.
Keep in mind that with both the House and Senate deeply divided, a second stimulus payment is less likely without significant compromise on both sides. Some analysts predict that politicians might hold off on a decision until after the election concludes.
If you have any questions about financial planning at this time, give us a call. We can help you decide how to put a stimulus check to best use, or assist you with other financial planning objectives.