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Friday, February 3, 2023

Check Out The State And Federal Payments In The Pipeline In 2023: No New Federal Stimulus Checks are Expected

The COVID-19 pandemic was the biggest experiment of its kind in sending out direct payments to individuals and families to confront the economic emergency arising due to the pandemic. millions of low and moderate-income Americans received aid through multiple rounds of stimulus checks that included the three Economic Impact Payments after the beginning of COVID-19.

The federal government rushed out the payments to avoid starvation among the population but the rush also meant that a degree of accuracy was sacrificed. This led to undeserving people, those who continued to earn regularly throughout the pandemic, still getting the stimulus checks.

The Federal Stimulus Checks Were Sent Through The IRS Because Of Their Vast Data But It Was Not Complete

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But more importantly, people who were the most deserving missed out on the payments and around 10 million continue to wait for the payments for no fault of theirs. The federal administration had to fall back on the expertise of the IRS in sending out the payments as they were the only federal agency that had the financial acumen and the ready data that would ensure that the payments reach individuals and households quickly.

When the nation was forced into shutdown as the pandemic spread across the country thanks to the decision by the Trump administration to refuse to see the writing on the wall, it meant that millions of households were sudden without any source of income.

Suddenly waking up to the enormity of the situation and Realizing that the country was on the precipice of economic and health chaos, the Trump administration passed an enormous emergency support package aimed at sending out relief. Among the support proposed was the first of the economic impact payments, or the stimulus checks, under the CARES Act that amounted to $1,200 for every eligible adult.

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Throughout a little more than a year, two more stimulus checks were sent out by the federal administration up to $600 in December 2020 and the third and last immediately after in March 2021. There was a difference of only two months between the second and third stimulus checks as the second was paid only in January 2021.

The third stimulus check came with a change in government in Washington as Democrat President Joe Biden took over, riding on the promise of a $2,000 stimulus check that was later watered down to $1,400 under the American Rescue Plan Act signed by Biden in March 2021.

While the federal administration has relied on stimulus checks earlier, particularly after the Financial Crisis, the size, scope, and frequency of the direct stimulus checks were in many ways a fresh experiment.

The three rounds of the stimulus checks along with other stimulus measures were way bigger and on a massive scale. It is nothing compared to what was done before by the federal administration, aver experts.

With each of the economic impact payments, the Internal Revenue Service and the US Dept. of Treasury became quicker and more efficient at disbursing the amount to a nationwide population.

In the initial weeks of the first economic impact payment in April 2020, the IRS set out 89.5 million payments. While a third stimulus check was approved by the Democrat administration and Congress on March 11, 2021, the revenue department announced within a week that it had already sent out more than 90 million payments. It is a sign of the efficiency that the IRS had acquired in organizing an operation on this scale within a matter of one year.

The IRS got the credit for the extraordinary job that they did in disbursing the payments in quite difficult circumstances. There were glitches in abundance to be sure including many stimulus checks that were sent out to the address of deceased Americans.

Experts also aver that the money should have been targeted way more than it was as some taxpayers who continued to hold jobs throughout the pandemic and were not affected financially by it also received the bonus amount. There was a swap between accuracy and speed and in these extraordinary circumstances, it was understandable.

The payments weren’t targeted to the extent they should have been. If legislators had other options things could have been more streamlined. But the highest priority for the administration at that point was getting immediate relief to citizens because of the nature of the emergency.

Around 90% of American taxpayers received stimulus checks regardless of whether they faced financial hardship, experts say. The third stimulus check of up to $1,400 was phased out more quickly to limit the amount high-income individuals and families received.

Even as the stimulus checks were deployed, there was a marked drop in the number of households who spent them, say experts. While the initial stimulus checks were majorly devoted to spending on immediate household needs, the later rounds of stimulus checks typically went toward paying off debts or savings. This was a trend visible across income levels.

Accounting For People Missing Out On The Stimulus Checks

One matter that has persisted across the organization, and the sending out of the economic impact payments were reaching out to missing citizens who did not have their records with the tax authorities. They are mostly people whose income is too low for them to file income tax returns.

In the first month that President Biden came to power in January 2021, he issued an executive order to renew the efforts of the federal government to find the estimated 9 million and more people who were still to receive their payment.

While the numbers may have dropped since then, it has not been significant as the IRS in recent months has sent out letters to around the same number. The letter was a reminder of the payments that they have not collected including the economic impact payments, the expanded Child Tax Credit stimulus checks, and the Earned Income Tax Credit (EITC).

Federal administrative officials say that it was a herculean task to get the stimulus checks into the hands of individuals and families who were the most vulnerable, and that included the colored communities, especially the Blacks and the Latinos.

Many were wary of signing up for the stimulus checks as they feared that the tax authorities would instead penalize them for unpaid taxes.

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