Second stimulus check facts: What to know about payment size, eligibility, IRS priority

Less than two weeks remain until the Nov. 3 election, and there the authorization for a new round of  stimulus checks continues to hang in the balance. As the lead negotiators continue to slowly work towards an agreement, there’s still much to be determined in the final package, including how much stimulus money you might be able to receive.

It can all be complicated to follow, but we’ve identified the key things to know about stimulus checks right now, including new facts that could affect your eligibility and get you more money. For additional reading, learn how the IRS calculates payment amounts and how federal taxes might affect your next stimulus payment. We recently updated this story.

1. There’s new hope a stimulus bill could come together

Democratic and White House negotiators have a new Friday deadline to agree on a larger package, which would still give it a chance to pass before the Nov. 3 election. House Speaker Nancy Pelosi and White House officials are optimistic about an agreement.

But there are significant challenges ahead, including potential rejection by Senate Republicans, without whose vote a stimulus bill would not pass. Senate Republicans have shown their distaste privately and publicly, and by leading two votes this week on much smaller bills. However, Tuesday’s $500 billion extension to payroll protection for businesses failed to get enough votes to advance. On Wednesday, Senate Majority Leader Mitch McConnell led another vote on last month’s failed “skinny” stimulus bill — a tightly focused package that doesn’t contain money for another round of stimulus checks, which was blocked.

Bottom line: The real action in the effort to complete a bill is between Pelosi and Treasury Secretary Mnuchin, and whatever happens this week will be crucial. A vote before the election would give stimulus checks and other aid a chance to come out by the end of 2020. Otherwise, the discussion may not be picked up again until January at the latest, depending on the election results. Here are more details.

2. The IRS may owe these people money for a first check

If you’re still waiting for your first stimulus payment, there are several ways to hunt it down. As many as 9 million people were estimated to be eligible for a first check but didn’t receive it because they needed to register with the IRS — an extra step most people didn’t have to take. The deadline is Nov. 21 and we show you how to register. 

Some people with dependents received only a partial payment and are still owed money. The deadline to get that in 2020 passed Sept. 30, but we explain how you can claim it with next year’s taxes.

And if you share custody with someone over a child, but you’re not married, you may each be able to receive $500 per child dependent. 

3. Stimulus payment calculations use this formula

You may be interested to know that the IRS has a formula for working out how much stimulus money you could get, and that’s what determines whether you receive the full amount, a partial payment or far more than the $1,200 if you have kids.

It also explains how you might still be able to get some stimulus money, even if your family’s yearly income exceeds the limit set out by the CARES Act in March. The calculations start with your household’s total adjusted gross income, add on the money allotted to qualifying dependents, and then start deducting from the total, based on your income bracket (as defined by the CARES Act). 

You can calculate how much you could get in a stimulus check now, including for a second check. 

4. People who are incarcerated might receive money after all

A judge in California ruled that imprisonment should not disqualify someone from receiving a stimulus check and ordered the IRS to release payments to people who would otherwise meet the qualifications. The ruling found that the CARES Act did not specifically or legally bar this group of people from getting checks and that the IRS’ interpretation is incorrect. If this ruling holds, up to 2 million people or their families could still receive payments for those individuals.

5. Most people paid off debt or banked their stimulus checks

A new survey this week on how people in the US used their first stimulus check shed light on the economic reality of the coronavirus’ effects. The survey from the Federal Reserve Bank of New York polled 1,300 households between June and August. The study found that of the 89% who reported receiving a stimulus check ($2,400 median total):

• 29% spent the stimulus money (on essentials, nonessentials and donations).
• 36.4% saved their stimulus money.
• 34.5% used it to pay down debt.

Here’s how respondents would spend a second check of $1,500, and how people used enhanced unemployment payments.

6. You may be in one of 5 different payment waves

Eligible Americans got the first stimulus payment at different times, often because of the way they got paid, and a second payment would be similar. For example, people who have direct deposit — an electronic transfer of funds into their bank account — set up with the IRS could get their checks weeks before those who receive a paper check or prepaid EIP card in the mail. We identified five priority groups based on the first stimulus checks. 

7. Your second payment could possibly arrive quicker than the first

With the first check, the IRS learned how to mobilize and deliver stimulus money, and worked out many of the growing pains in the plan. If a second check is approved, it’s likely that the agency could speed up the process of sending out the first set of payments. The tracking tool is already up and running, the system is in place and it’s likely that the majority of people who qualified for a first check will also receive another. 

The timeline is constantly changing, but we’ve mapped out potential dates a check could be sent if approved before — or after — the election.

8. New eligibility changes could allot more money for dependents

It’s likely that a second stimulus check would largely follow the same rules and guidelines as the first. But the qualifications for who could get money are subject to change, in ways that could benefit your family. One proposed bill redefines who counts as a qualifying dependent, and would give your family $500 for each dependent you claim on your taxes, regardless of age. 

The current $1.8 trillion proposal from the White House offers a $1,000 payment per child dependent. We’ve explained how some families might benefit more from one bill than the other in terms of a total payment. (Here’s how young people could qualify for their own $1,200 check.)

9. There are plenty of confusing exceptions and rules

If a second stimulus check is approved, there will be lots of small details, rules and exceptions that can get confusing. While some situations will be easy to understand, others concerning you and your dependents might make it unclear if you’re eligible, and for how much money. The fringe cases are many. 

For example:

10. You won’t have to pay taxes on any stimulus money

The IRS doesn’t consider stimulus money to be income. That means a payment you get this year won’t reduce your refund in 2021 or increase the amount you owe when you file your 2020 tax return. You also won’t have to repay part of your stimulus check if you qualify for a lower amount in 2021. The IRS said if you didn’t receive everything you were owed this year, you can claim it as a credit on your 2020 federal income tax return by filing in 2021. Here’s everything to know about stimulus checks and taxes.

There’s much more to know about other government payments during the pandemic, including a possible interest check from the IRS and where the $300 federal unemployment benefit is now.