More than 2 million Americans will get their stimulus checks as the IRS has sent out the latest batch of Economic Impact Payments under the American Rescue Plan. The IRS distributed 2.3 million in the batch sent out last week under President Biden’s $1,400 check to all eligible Americans affected by the economic downturn triggered by the pandemic.
A large number of the stimulus checks include plus-up or follow-up payments that squared up short payments made to individuals and families in the first round of the stimulus payments in March and April 2021. 169 million payments went out in the second week of June, sending $4.2 billion to American homes.
To give the payments to maximum people immediately after the bill was signed in March 2021, the IRS sent out the initial batches of stimulus checks based on the 2019 tax returns. But many people earned less in 2020 and their income tax returns for that year led to their getting more thorough follow-up or plus-up payments
The total amount sent under the Economic Impact Payments now stands at $395 billion. Many Americans have had to wait for months for the check as the IRS prioritized sending the checks to people who have filed their income tax returns for 2019 and 2020. The reason being that the IRS had all the data necessary to confirm the amount based on their income, and the destination of the stimulus checks.
Determining The Amount Of The Stimulus Check
The US postal service created the Informed Delivery to help people track their mail regularly for a debit card or a paper check. The IRS meanwhile, has the Get My Payment tool that helps potential beneficiaries with daily updates. While this tool does not tell beneficiaries the amount of the stimulus check, they get to know the schedule of the payment and also the mode of payment, either the postal service or a direct bank transfer.
The plus-up adjustment makes up for the difference in the eligibility of an individual or family, and the actual payment sent by the IRS. People who had received their stimulus checks before filing their 2020 returns received their payments based on the 2019 returns. Subsequent calculations threw up an additional amount for many of such filers. The IRS set 8 million such follow-up or plus-up payments by the second week of June.
People have also got follow-up payments for other reasons, including the birth of a child in 2020 and any addition to the list of dependents.
People who had filed individual returns could also benefit if they opted for a joint filing option available for married couples.
Fading Hopes Of An Immediate Fourth Stimulus Check
The federal unemployment check of $300 per week was extended up to September 6. But several states have opted out of the weekly aid even before the federal support is due to end. A quarter of the people who have registered for unemployment support will lose the support due to the decision of 25 states. This was revealed by Century Foundation, a think tank.
The unemployment rate continues to hover around 6% and families continue to struggle with no sign of any immediate further stimulus support. It was around 3.5% before the pandemic hit in March 2020. Many Americans are behind in their mortgage and rent payments and have been forced to default on other debts. A third of Americans continue to draw reduced payments when compared to the pre-pandemic figures.
The demand by several Democratic lawmakers and the petition by close to 2.4 million Americans for a fourth stimulus check have not yielded results. The Biden administration continues to be preoccupied with the infrastructure bill.
There is hope that the American Families Fund could include some form of stimulus payments. A couple of dozen lawmakers have called for ‘automatic stabilizers’, put in place for stimulus and unemployment checks.
Such payments would be free of legislative action and would be based on several economic trainers. This includes a certain rise in the rate of unemployment or a future economic crisis. Direct stimulus checks would be paid without the hassles of getting it passed through the legislative process.
Even Janet Yellen, the treasury secretary was supportive of the idea and mentioned it earlier this month. She said that this idea needs more analysis and discussion. She said that she was ‘broadly’ behind the idea.
She also mentioned that such an idea could be linked to movements in the economy, like a rise in unemployment rates. Even Jen Psaki, the Press Secretary at the White House said that President Biden was open to the idea of the fourth round of stimulus checks.
She mentioned that the President was open to ideas that would be effective in moving the economy forward. But it remains up to Congress if these hopes will bear fruition.
The only federal support insight is the Child Tax Credit payments and advances against the 2021 returns. The CTC is set to start on July 15 and will benefit families with children. The total amount is $3,600 for children aged below 6 and $3,000 for those aged between 6 and 17.
Half of this amount will come in monthly payments between July and December 2021. The rest will be adjusted against the 2021 returns. the income threshold for individual taxpayers is $75,000. $112,500 for the head of household, and $150,000 for joint returns by married couples.
The IRS has opened two web portals that give parents and guardians the option to select between a monthly payout and a one-time refund check against the 2021 tax returns to be filed in 2022. Families and individuals should update their preferences before the portals are fully functional in the first week of July.
The Latest Unemployment Data And A Fourth Stimulus Check
The unemployment data for May 2021 could make it difficult for lawmakers to push through a fourth stimulus check. The latest state unemployment figures released by the Bureau of Labor Statistics show a positive trend in the rate of employment.
A total of 21 states has reported lower unemployment figures in May. The District of Columbia also reported similar figures. And in 28 states the unemployment rates remained stable. Only one state reported an increase in unemployment figures.
This is a firm indicator that the economy is recovering even though many sectors including food and tourism continue to be severely affected.
According to the report, there was a significant drop of 0.3% in the national unemployment figures when compared to the previous month. The increase is an encouraging 7.5% when compared to May 2020.
The jobs report for May 2021 also bears signs that the nation is gradually recovering from the COVID-19 pandemic. In May alone, 560,000 new jobs were added to the economy.
The encouraging employment figures make the possibility of further stimulus checks unlikely, at least in the immediate future.