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Friday, January 27, 2023

Are We Still In For A Fourth Stimulus Check? Good News On Unemployment Benefits

The third stimulus checks have gone out to 167 million individuals and families. Another 1.8 million went out in the latest batch. But lawmakers believe that the third round of payments will not be enough for Americans reeling under the economic downturn brought about by the pandemic.

Eligible Americans have received around $3,200 in the three-round or stimulus checks, with $1,400 coming in under the American Rescue Plan signed by President Biden in March.

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But 4 out of 10 Americans continue to face acute financial distress with income far below the pre-pandemic levels. This was revealed in a survey by TransUnion, the financial services firm.

Lawmakers Continue To Clamor For More Stimulus Checks

Many Democratic lawmakers are urging President Biden to go in for a fourth stimulus check. they said that it could be either recurring payments or a one-time stimulus check. they have received strong support from the common people. A petition for more stimulus support, initiated by a restaurant owner on change.org has garnered more than 2.3 million signatures.

While the first three rounds of stimulus checks helped rein in financial instability and food insufficiency, there remains the danger of a return to the pandemic era crisis.

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A group of Democratic Senators including Elizabeth Warren of Massachusetts and Bernie Sanders of Vermont has written to President Biden for recurring direct stimulus checks, automatic unemployment insurance extensions that are linked to prevailing economic conditions.

53 Representatives led by Ilhan Omar from Minnesota had also written to the President and Vice President Kamala Harris for regular stimulus checks until the situation stabilizes. They felt it would shorten the duration of the recession. To other notable lawmakers, Alexandria Ocasio-Cortez and Rashida Tlaib have also signed for additional stimulus.

Several members from the House Ways and Means Committee have also written to the President on May 17 for continual support. They said that the stimulus check, unemployment benefits, and other provisions will help 11 million Americans stay out of poverty. A fourth and fifth stimulus check would save another 12 million and would together help in bringing down the number of people affected by poverty from 44 million to 16 million.

There has also been a suggestion to keep stimulus support out of the legislative process. They urged that future stimulus payments should be linked to triggers that would automatically send out payments if the economy went below a certain level.

Leading Economists Have Also Urged For More Stimulus Checks

stimulus check
stimulus check

The Urban Institute has said that future stimulus payments would reduce poverty in 2021 by 6.4%. An open letter from leading economists has urged policymakers in the government to mobilize all the tools at their disposal to ward off any immediate future crisis through a direct stimulus check.

it would give a boost to economic security, jumpstart consumer spending, and ensure a prolonged period of stability in the economy. It was signed by 159 leading experts and economists across the United States.

They have also stressed the need for automatic stabilizers. That would ensure relief whenever it is needed and do away with the need for frequent legislative intervention. They say that direct cash infusion is the best way to help people affected by prolonged periods of recession.

The availability of cash in the hands of people will set off a chain reaction that will give a boost to the local economy and give a fresh lease of life to many businesses. And the stimulus payment should continue till there are clear signs of an economic recovery. Indicators such as low unemployment will bring back confidence across sectors and give a boost to the economy.

Policies that encourage a vigorous, continual, racially unbiased recovery should stay in place till the nation is back on its feet.

Unemployment Benefits Still On For 16 Million Americans

Even as 16 million Americans continue to receive unemployment benefits in one way or the other, the unemployment rate continues to be at 6.1%. That’s nearly double the pre-pandemic level of 3.5%.

And low wage industries like hospitality and food services are the worst hit and have far higher figures of low wages or unemployment.

A quarter of Americans continue to struggle to put food on the table and pay for their essential requirements. 13% of adults with children in their households revealed that they did not have enough to eat.  These figures were revealed by the Center on Budget and Policy Priorities.

The $10,200 Unemployment Benefits Have Started Rolling Out As Tax Breaks

stimulus check
stimulus check

After the initial hiccups, the authorities have started sending out refunds to taxpayers who were taxed on unemployment benefits in 2020.

Though the process was delayed, the money has started rolling out and millions of individual filers have received credits in their account since May 28. Over 2.8M payments went out just in the beginning of June. The next batch of refunds is slated for mid-June.

This benefit is also part of the American Rescue Plan and will allow taxpayers to exclude as much as $10,200 in unemployment benefits from their Adjusted Gross Income. And thanks to this adjustment, many tax filers may not have to pay taxes on their income this year.

The IRS is having to give out unemployment benefit refunds because most individuals and families have already filed their returns.

June 7 was the first date for the first phase of payments. They went out to taxpayers with simpler returns. They include single taxpayers, refundable tax credits, or no child credits.

The second phase will benefit those with more complex returns including couples filing jointly, and those families getting child tax credit benefits.

The IRS has said that they estimated that 10 million taxpayers will get credit from this unemployment benefit.

When Is Your Unemployment Tax Refund Due?

Under the American Rescue Plan, taxes on the first $10,200 of unemployment benefits for individuals has been set aside. For couples filing jointly the figure is $20,400. But this waiver is only for taxpayers whose earnings in 2020 is less than $150,000.

How Do You Get Your Refunds?

If you have updated your banking details with the IRS, you will get a direct deposit. Else, you could have to wait for the US postal service to deliver your paper check or debit card. You will also get a letter from the IRS, detailing the basis of the payment.

Checking For The Unemployment Benefits From Tax Refunds

Individuals eligible for the refund will receive Form 1099-G through the unemployment agency of their state. If they haven’t received it, they should request one. Looking up your tax transcript is a convenient way to check for a refund.

To do that, you need to log into your account on irs.gov. if you don’t have an account, the process is simple. Go to the Home page and click on View Tax Records. Next click on Get Transcript. You will get a menu. Go for Federal Tax. The Customer File No. is to be left blank. On the next page select 2020 Account Transcript. You will get a pdf copy of your record.

On the side marked Transactions, there should be a Refund Issued entry either at end-May or June. You should be getting a letter within a month of the adjustment from the IRS. You will know if there has been a refund or the amount has been adjusted against previous debts.

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