Keeping up with the ins and outs of stimulus checks is hard. We’re here to help.
Angela Lang/CNET
With the House of Representatives returning to work this week to consider President Joe Biden’s $1.9 trillion COVID-relief proposal and a group of 10 Senate Republicans (PDF) also ready to present their own $600 billion economic rescue framework, the next few weeks could packed with news about a third round of stimulus checks. Plus, if you’re still waiting for money you’re owed from the first or second checks, the IRS will start processing federal tax returns Feb. 12, letting you claim missing money as a tax credit.
Almost from the day Congress approved the second stimulus check at the end of 2020, many in Washington started talking about the possibility of a third stimulus check for $1,400. We’ll talk about potential changes to qualifications, how some lawmakers would seek to limit the third stimulus payment, what to know about how quickly the IRS could send another check and how to potentially get the next round of payments into your bank account faster.
Below, we’ve broken down the most important stimulus check facts and developments right now. This story was recently updated.
February will be stimulus month
With Congress promising to start work in February on the next round of COVID economic and vaccine assistance, February will be busy. And that’s on top of the Senate’s impeachment trial for former President Donald Trump.
Promising to use the last week of January to lay the groundwork for Biden’s $1.9 trillion package, House Speaker Nancy Pelosi said House Democrats will return to work this week “completely ready to go to the floor” with the administration’s COVID proposal.
The 10 moderate Senate Republicans are also looking move forward in February on their plan for COVID relief, sending Biden a letter (PDF) on Jan. 31 urging him to meet on their proposal. The GOP plan would drop some of Biden’s funding projects to make the $600 billion budget goal, including reducing the amount of stimulus checks to $1,000. “If you can’t find bipartisanship on COVID-19, I don’t know where you can find it,” said Ohio Senator Rob Portman, a member of the Republican group of 10, on CNN’s State of the Union on Sunday.
Tax season 2020 is important for stimulus checks, even if you don’t usually have to file
February will also mark the start of tax-filing season, which carries extra weight for those who qualify for the first, second or potentially third stimulus checks — and that’s whether your are normally required to files taxes or not. That’s because the IRS uses the federal tax system to decide everything from how much money you should get in your stimulus checks (based on your AGI) to how quickly it can send your next payment, or even if you should get a catch-up payment (it’ll be faster if you set up direct deposit with the IRS and do your taxes soon).
If your first or second payment haven’t arrived, or if any amount is missing, the IRS will use your 2020 taxes to reconcile the difference — but only if you file for a Recovery Rebate Credit as, you guessed it, part of a tax return. Again, that even applies to non-filers, people who aren’t typically required to file income tax. Here’s our primer on everything stimulus check and taxes.
One more thing: If you got a letter from the IRS saying the money was sent, but you never got your funds, you may need to set up a payment trace rather than use the IRS’ rebate credit.
A third stimulus check could happen pretty quickly
It took exactly nine months to get from the signing of the CARES Act (March 27, 2020) to the December stimulus bill (Dec. 27, 2020). Even before inauguration, Biden has been bullish about Congress passing another COVID-19 relief package — one that includes a third stimulus check for up to $1,400. And he — along with congressional Democrats — want to see the third injection of funds sooner rather than later.
While Pelosi has suggested a bill could be ready for a vote in the House as soon as the week of Feb. 1, if Biden decides to work with the moderate Senators on their plan for a third stimulus check for $1,000 and funding for coronavirus vaccine delivery, talks on a new stimulus payment could get pushed out at least a few weeks. Here’s the current stimulus check timeline as we know it now.
More people could qualify for the next stimulus check, but it may get complicated
Whether the third stimulus check winds up having a per-person maximum of $1,400 or some other amount, as long as it’s more than $600 and uses the same income limits (and that could change), more people could likely to qualify (handy chart here). That’s because there’s an income limit that’s part of a mathematical formula used by the IRS after which point you can’t get any money. That some-money threshold goes up when the per-person maximum goes up. So more people are eligible for some stimulus money with a $1,200 check than with $600, and so on.
The Senate Republican plan would significantly lower the income cap to qualify for payments — from $75,000 to $50,000 for an individual and from $175,000 to $100,000 for a family — to target payments at lower-income groups and “help those that need it the most,” Portman said Jan. 31.
In addition to setting up a higher overall payout with a larger check, Biden’s stimulus proposal also seeks to include two more groups of people: Dependents of any age and families with mixed-status citizenship (that means some members are not US citizens). Republicans offered no specifics on which groups would qualify under its framework.
What isn’t clear is how the payment will work for these groups. Will households all get another round of money per dependent, or just those who were excluded before? Will any amount of the payment be retroactive for mixed-status families who were barred from claiming the first and second check? Those rules aren’t yet determined.
The path between you and your stimulus check money is sometimes winding.
Sarah Tew/CNET
Your stimulus check rights improved with the second round — mostly
For the most part, stimulus dollars are yours to spend or save as you please. Almost nobody can compel you to pass over your proceeds for rent, car payments, back taxes or debt — or even unpaid child support. That’s with the second check that went out last month, which changed some of the rules.
However, the government’s Taxpayer Advocate Service, which works with the IRS, has pointed out that anyone claiming a Recovery Rebate Credit for catch-up stimulus money is not automatically protected from garnishment.
It isn’t clear how a third check would play into the mix. And there is still an exception that allows at least one entity to garnish your stimulus money. Make sure you know your stimulus check rights.
The rules and exceptions can get very confusing
When it comes to stimulus checks, small details and exceptions can be dizzying. While some situations are easy to decipher, others concerning you and your dependents might make it unclear if you’re eligible, how much money you could receive and if there’s anything extra you have to do to claim your money.
For example: