What’s the deal with the second stimulus check? Here’s what you need to know

Here’s the good news. Earlier this week, the House and Senate overwhelmingly passed a combination COVID-19 relief package and federal spending bill, which includes a $600 second stimulus check. The nearly 5,600-page joint package has been flown to President Donald Trump at his Mar-a-Lago club in Palm Beach, Florida, for review. The bad news is that on Tuesday he called the $600 payments a “disgrace” and asked Congress to send him a new bill with $2,000 payments. The president spent Christmas Day golfing with Sen. Lindsey Graham, AP News reported. 

With the clock ticking, uncertainties abound. If Trump does sign the current bill, how quickly could the IRS send the first wave of checks what’s this about a Jan. 15 IRS cutoff? How much money could you really get, $2,000 or $600, and can you calculate your stimulus check total now? Which rules have changed in the $900 stimulus bill that could make new people eligible to receive a second stimulus check — or disqualify them completely?

There are some facts about a second stimulus check we can sort through right now, based on the text of the current bill and the first stimulus check. We’ll even share what we know about a third stimulus check (yes, you read that right), your stimulus check rights and other important details. This story updates often with the latest information.

Will Trump sign the bill? Three things could happen

In truth, anything could happen from here. Trump has a history of unpredictability and has been known to abruptly change his mind, as he did in October when he suddenly stopped stimulus bill negotiations only to offer a deal days later. There are, however, some potential outcomes.

• Trump could sign the combined stimulus/government funding bill that would authorize a second stimulus check.
• Trump could veto the bill and, depending on the timing, Congress may have enough time to overrule it.
• Trump could do nothing, triggering a pocket veto that Congress would not have time to overrule before the new Congress is sworn in. That would in effect terminate the bill’s candidacy to become law and the new Congress would have to start over.

Trump still wants Congress to bump the direct payment amount to $2,000 per person

A day after Congress approved the bill, on Tuesday, Trump asked the House and Senate to amend the bill with its “ridiculously low” $600 check and approve instead payments up to $2,000 per individual. 

“Why would politicians not want to give people $2000, rather than only $600?” Trump tweeted Christmas day. “Give our people the money!”

It’s not that simple. The bill has already been approved by Congress, and standalone amendments would be difficult to pass through both chambers, especially with only 9 days left in the term for the current (116th) Congress. Here’s where the effort to raise the $600 second stimulus check amount to $2,000 stands.

A proposal for a $1,200 check failed to gain traction last week, when Sens. Josh Hawley, a Republican, and Bernie Sanders, an independent, couldn’t bring a standalone bill (PDF) for a $1,200 stimulus check to a vote.

The $600 stimulus check would make more people ineligible

The second stimulus check Congress approved on Monday as part of the new $900 billion bill clearly reduces the total amount you will get: half the first check. That’s up to $600 per qualifying adult and $1,200 for married couples filing jointly.

The figure is largely based on your tax status and on a sliding scale similar that gives you the full amount up to a certain income limit, and then a partial payment up to a set amount beyond that. After a certain amount, you wouldn’t be eligible for any amount. This is determined by a mathematical equation written into the bill, and follows the same formula as the first check. However, the fact that the $600 upper cut-off limit is half the first check actually lowers the income ceiling for getting a partial check, and for getting any check at all. We have a stimulus check calculator to estimate your household’s payment this second time around.

In other words, fewer people would be eligible to receive any amount from a $600-maximum stimulus check than they would a $2,000-maximum payment. For example, a single taxpayer would still get the full $600 with an AGI under $75,000, but they would not receive anything above $87,000, down from the $99,000 cap for the first check. See our guide for a breakout of the payments. A $2,000 stimulus check that uses the same formula would make more people eligible for a partial check.

There may be additional changes to your life circumstances in the past nine months that could mean you and your family may not be eligible for a second stimulus check.

Your kids would count for more money than the first check

The $900 billion set aside for economic stimulus changes the amount of money you’d get for child dependents, a flat rate of $600. This is different from the variable rate set for eligible adults. Compared to the first direct payment, this is an increase from $500 per child dependent 16 years or younger. There is no cap on the number of children 17 and under who would contribute the household’s total.

A third stimulus check in 2021 already has a major supporter

No matter what happens with this current bill, Congress is expected to take up another relief effort in 2021, after President-elect Joe Biden is sworn in. 

“This bill is just the first step, a down payment,” Biden said on Tuesday of the $900 billion stimulus bill, promising to push for more aid in 2021. Biden also committed to a third stimulus check in 2021, but whether it happens or for how much depends on the appetite of a new Congress to continue to support the economy.

The IRS could start sending the second check a week after a bill is approved

With the first check, the IRS was tasked to create an online registration and payment tracking tool, as well as a payment schedule for more than 160 million people. It took 19 days before the first wave of payments was delivered. 

Now that the tracking tool is up and running and the system is in place, the first stimulus deliveries could go a week after a bill is approved, starting with direct deposit. On Monday, Treasury Secretary Steven Mnuchin confirmed that those with banking information on file with the IRS will get their checks quicker. 

“The good news is [direct deposit] is a very, very fast way of getting money into the economy” Mnuchin said. “Let me emphasize: People are going to see this money at the beginning of next week.” This promise won’t hold true if Trump doesn’t sign the bill.

A big catch: The a Jan. 15 cutoff for the IRS to send a check

Language in the stimulus package would prevent the IRS and US Treasury from sending the second stimulus check after Jan. 15, 2021. The longer it takes the bill to become law, the less time the government will have to send an enormous volume of stimulus money.

Although Mnuchin promised delivery of stimulus checks within three weeks of sending them, assuming the $900 billion stimulus bill became law, that may not be realistic for tens of millions of people — or even possible. After all, the IRS can only process so many physical checks at once. The rate is 5 to 7 million a week, according to a GAO report from June.

No payment by then? You’d need to claim it with your 2020 taxes

Those who receive a paper check or prepaid EIP card in the mail could begin to get their payments starting a week or more after a bill becomes law. Anyone who doesn’t get a check by that cut-off would need to claim their second stimulus check along with their 2020 tax filing. The later you file taxes, the longer it might take to get a second stimulus check.

Here’s what you can do now to help speed up the delivery of your personal check.

The IRS likely to schedule checks by payment group

Eligible Americans got the first stimulus money at different times, based on five de facto priority groups. Once the bill containing a second check is signed into law, the IRS will use a similar approach. For example, people who have set up direct deposit with the IRS — an electronic transfer of funds into their bank account — will get their payment first, followed by the rest. Some people may experience a bigger holdup. Here’s a more detailed explanation of the payment groups.

If you’re missing money from your first check, you can claim it

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

You don’t have to file taxes to meet stimulus payment requirements

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) to get your check. We’ve asked the IRS for details.

Your 2020 stimulus check is not subject to taxation

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.

There are many important rules and exceptions to know

Now that 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 because there are many fringe cases.

For example:

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

Your second stimulus money can’t be taken for rent or debt

In most cases, your check is yours to spend or save how you want and it isn’t taxable. But there were a few situations where the state or federal government or a debt collector can take all or part of your first check to cover a debt, such as if you owe child support. However, with the second check, the money can’t be used to pay past-due federal or state debts, and the payments are protected from bank garnishment and from private creditors or debt collectors.

This formula is key to deciding the size of your first payment

Predicting what your payment could end up being isn’t straightforward. The IRS used a formula to determine how much stimulus money you got for the first check and is doing something similar for the second checks. Try our second stimulus check calculator to get an idea of the size of your payment. 

The calculation starts with your household’s total adjusted gross income, adds on the money allotted to qualifying child dependents and then deducts from the total based on your income bracket.