Quick Facts About the New Stimulus Package

In late December, Congress passed a $900 billion stimulus package, which included $600 checks to qualifying citizens. After initially refusing to sign the bill unless the checks were increased to $2,000, President Trump signed it. Although the House voted to increase the checks, the Senate didn’t pick up the vote, leaving the original package unchanged. Some highlights from the bill include:

The IRS and the Treasury have already started direct deposits. Recipients who don’t have direct deposit set up with the IRS will receive physical checks or Economic Impact Payment cards – provided the IRS gets to them by January 15. Those the IRS doesn’t get to by that cutoff date will need to claim a recovery rebate credit when they file their taxes.

Qualifications for this bill’s checks differ from the CARES Act in a few ways. Eligibility is determined based on 2019 tax returns (compared to 2018 or 2019 with CARES). To receive a full payment, an individual can’t have a 2019 adjusted gross income (AGI) above $75,000; married couples can’t have an AGI above $150,000, and a head of household’s AGI can’t be over $112,500. Eligible parents will receive checks for children under the age of 17.

People with higher incomes will receive a partial payment, which declines by $5 for every $100 of income over the full-payment limits. So, individuals with income of $87,000 and above and married couples filing jointly with $174,000 will not receive payments.

The IRS answers questions about the second stimulus checks and provides a tracking option at https://www.irs.gov/coronavirus/economic-impact-payments.

Other provisions from the 5,600-page bill include:

• Individuals drawing unemployment benefits will receive an extra $300 a week through March 14.
• Some hard-hit small businesses may be able to apply for a second Paycheck Protection Program loan.
• Employers deferring payroll taxes under the President’s executive action have until the end of 2021 to increase employees’ withholding to pay back taxes owed.
• The $300 above-the-line deduction for cash contributions to qualified charities is extended through 2021.

If you have questions on how the bill may affect you or other financial concerns, don’t hesitate to call.   We do not provide tax advice; coordinate with your tax advisor regarding your specific situation.