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Update May 15: The House just passed this bill, but most likely will NOT pass in the Senate, and Trump has promised a veto if it hits his desk. But this is the first real proposal for a second stimulus package, and hints at what Democrats are fighting for.
There’s a new Stimulus Package on the table, and it’s a $3 trillion monster of a bill!
On May 12th, House Speaker Nancy Pelosi proposed the new Health and Economic Recovery Omnibus Emergency Solutions Act, known as the “HEROES Act“.
This bill is over 1,800 pages long, and for the purposes of this post, I’m going to focus on the details of second round of stimulus checks and details on who gets them, who doesn’t and if its likely to pass.
Best Savings Account For Your Stimulus Check?
$1,200 Stimulus Checks Per Person
This bill is following a similar pattern to the original CARES Act that sent out the first round of stimulus checks.
The current proposal gives specific amounts per qualifying taxpayer. Here’s a quick summary:
- $1,200 check sent to individual taxpayers who meet the income qualifications
- $2,400 check sent to married-filing-joint couples who meet the income qualifications
- $1,200 additional for each qualifying dependent, up to 3 total (this differs from the original stimulus checks)
The largest payment would be to a family of 5, married filing joint with 3 dependents. This would be a $6,000 stimulus check.
The phaseouts are the same as last time. And are also based on your 2018 or 2019 tax return info, same as last time.
- $75,000 for Single
- $112,500 for Head of Household
- $150,000 for Married Filing Joint
- $99,000 for Single
- $136,500 for Head of Household
- $198,000 for Married Filing Joint
If you earn over the income phaseout amount, you will receive $5 less per $100 AGI over. This includes the money for each dependent, meaning after you lose your $1,200 check, earning $100 more will also reduce your $1,200 per child check by $5.
Example; If your adjusted gross income for 2019 was $80,000, you are $5,000 over the income phaseout. That means your check would be reduced by $250. You would receive a $950 stimulus check.
Example 2; If Married Filing Joint with 2 kids and your adjusted gross income for 2019 was $218,000, you are $20,000 over the income phaseout. That means you would NOT receive the $2,400 (phased out at $198k), and you would also lose the $1,000 of the $2,400 for your 2 kids. So your stimulus check would be $1,400.
EXAMPLE TOTAL CHECK
We are a family of 5, married-filing-joint and meet the income qualifications for a full check. We also have 3 qualifying dependents.
We would expect a $6,000 check from this stimulus (which is the maximum allowed).
$2,400 + $1,200 per child (3) = $6,000
Is This A Monthly Payment?
Though there have been MANY proposals lately asking for monthly stimulus payments, this bill is proposing another one-time payment, similar to the first stimulus checks.
I suspect this is due to cost, among other things, and since the rest of the bill is so expensive, monthly payments would possibly double the price of this bill, making it dismissed immediately.
“Corrections” To The Original CARES Act
This bill also adds a few “corrections” to the original stimulus bill, the CARES Act.
- Married Filing Joint couples were disqualified from receiving a Stimulus Payment in the CARES Act even if just one of them did NOT have a Taxpayer Identification Number (usually a SSN).
- This bill retroactively fixes that issue, and instead of both of them receiving $0, only the spouse without a TIN would get $0, and the other spouse would get $1,200.
- It changes the wording from “qualifying child” to “dependent” to help families get paid the original $500 for children 17 or older living at home, and for elderly dependents.
- It provides more protection from banks who to NOT be able to seize the stimulus funds due to any outstanding debts or owed payments. The original CARES act did not explicitly protect individuals from the financial institution that received their payment from seizing those funds.
Will The HEROES Act Actually Pass?
No. Not in its current form.
Republican Senators have stated repeatedly they don’t want another LARGE direct payment, and are urging Congress to “wait and see” how the original stimulus helps the economy and individuals.
It might pass the House which is Democratic majority, but it would be hard-pressed to pass the Republican majority Senate.
There is a vote on it this Friday, I expect to see many changes and compromises before this bill becomes final.
But the fact that direct stimulus payments are in this bill (in line with the first ones that went out), shows that this is something Congress is considering.
Stay tuned for updates!