Second stimulus check has a future. 12 things to know before the end of 2020

As coronavirus cases grow in the US and a handful of federal benefits helping individuals and families weather the pandemic is set to expire, a bipartisan group of senators on Tuesday presented a $900 billion COVID-19 relief bill designed to get aid to the country before the end of the year. The new proposal, which would not include another stimulus payment, has already gotten the kibosh by Senate Majority Leader Mitch McConnell, who then reportedly advanced his more recent take on a much smaller bill, also without a second stimulus check.

That doesn’t mean, however, that the next direct payment is dead. President-elect Joe Biden said Tuesday he’d work with the next Congress after taking office on additional economic assistance. “A package passed in a lame-duck session is likely to be at best just a start,” Biden said. “My transition team is already working on what I’ll put forward in the next Congress to address the multiple crises we are facing, especially for economic and COVID crises.”

As we wait for the new coronavirus relief packages — and a possible second stimulus check for eligible Americans — you may be wondering, how much money could your household get with a second stimulus check, and will it be more or less than last time? And how quickly would you get your next check? If negotiations completely fail before Biden takes office on Jan. 20, what kind of stimulus could he bring without Congress?

In the meantime, here are 12 things we do know right now about a second payment, based on the terms of the first stimulus check and the various proposals that’ve come across the table, including Biden’s own ideas. We update this story often.

You may not get a second stimulus check in 2020

With Congress back in session, the Senate and House have little time to reach a compromise on more COVID-19 relief aid. If Congress does agree to the new bipartisan proposal that lacks a second check, it’s possible that a bill with a check could pass in 2021 instead. Or it may be that no bill will pass at all before the new year. If more COVID-19 relief aid goes through without a second check, here’s how you may still benefit. We’ll know a lot more when talks start up again in earnest.

You may get a smaller — or larger — payment this time

If the eligibility requirements change with the second check, you and your family could find yourself with more money in your payment, or less. For example, a new rule could potentially get you a bigger sum. But there may have also been changes to your life circumstances — such as a birth or death in the family, starting a new job or becoming unemployed — that might also make your second stimulus check smaller. Here’s how you can estimate how much you’d probably get, and here’s how the IRS determines how much money you get.

How fast could you get a second check, based on your IRS group?

Eligible Americans got the first stimulus money at different times, often because of the way they got paid, and a second payment would be similar. For example, people who have set up direct deposit — an electronic transfer of funds into their bank account — 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. 

The next payment could arrive faster than the first

With the first check, the IRS learned how to mobilize and deliver stimulus money, and said it worked out many of the difficulties in the process. If a second check is approved, it’s likely 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 probable that the majority of people who qualified for a first check would 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 Jan. 20 inauguration.

How to prepare now to get your second check more quickly

If a second stimulus check is approved, it’s expected that the IRS will move quickly to send them out. There are steps you can take now to get your payment faster. We’ve identified ways to help make sure you’re in one of the first waves to get your stimulus money, not the last.

Some people won’t qualify for a check this time around

With the first round of checks, Congress set income limits based on your adjusted gross income that were one line separating who did and didn’t qualify for a stimulus check. But that’s just the beginning. Your status as a dependent or adult, your citizenship and more also helped decide if you got all or some of the first check — and those things will likely also affect the second. Read more about stimulus payment qualifications here.

The IRS still owes millions of people catch-up stimulus money

Guess what? The IRS might still owe you money from the first stimulus check. It may be that some money was left out for child dependents, or that an interpretation of a rule changed (this really happened), that you fell through the cracks with your personal situation, that you didn’t think you qualified but you actually do and need to take an extra step, or that some other error kept you from getting the total amount you were entitled to. The Nov. 21 deadline to file your claim has passed; now, you’ll need to wait until tax season in 2021 to register for a payment from the IRS.

There’s a formula that determines how much stimulus money you get

Predicting what your payment could end up being is not straightforward. The IRS used a formula to determine how much stimulus money you got for the first check, and something similar for a second payment would determine whether you receive the full amount, a partial payment or far more than $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 calculation starts with your household’s total adjusted gross income, adds on the money allotted to qualifying dependents and then deducts from the total based on your income bracket (as defined by the CARES Act). 

You don’t have to file taxes to get your stimulus money

While taxes and stimulus checks are tied together, you don’t need to have filed a tax return to qualify for a check. If you’re over age 65, for example, and receive Supplemental Security Income or Social Security Disability Insurance, you could still qualify for a stimulus check under the CARES Act. You might need to take an extra step to request your payment (you had until Nov. 21 for the first batch) in order to get your check.

You won’t be taxed on stimulus payments in 2021

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.

Rules and exceptions are key to your final check total

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

For example:

Certain issues could delay your check, such as if you recently moved.

Here’s who can take your stimulus money away

In most cases, your check is yours to spend or save how you want; it isn’t taxable. But there are a few situations where the federal government or a debt collector can take all or part of your check to cover a debt, such as if you owe child support.

For more information about stimulus payments, here’s what’s happening with stimulus negotiations right now, what Biden plans for a stimulus bill and which federal benefits expire at the end of the year.