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Monday, August 15, 2022

Stimulus Check: The Timeline, Amount, And Potential Delays In The Third Payment

The stimulus package of $1.9T proposed by the Biden administration passed its first hurdle as it was voted through by the House of Representatives. It includes a $1,400 stimulus check payable to every person. The bill, though, still has some way to go before it becomes law. It is now up to the Senate and the Democrats are intent on getting the final copy of the Bill passed through the President’s desk where over the coming few weeks it finally becomes law.

The picture will only get clear after the final bill goes through. Minor changes like small qualification changes or tweaks in the formula to check the stimulus could have implications on who finally qualifies for receiving the money. But there is more clarity now than during the previous rounds. $1,200 and $600 were authorized during the first two rounds of the stimulus payments, as the Congress and the Trump administration could agree only on two checks throughout the Covid 19 pandemic

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The beneficiaries may be decided by the way dependents are counted in this round, eligibility could be affected by citizenship, and finally, a strong determining factor affecting eligibility for payment could be the tax season.

From what we know to date, the third check for the family could finally mean a lot more than the $1,400 payment for the family. Going further, we touch upon the way to claim money omitted and if it is necessary to apply for an IRS trace. Here is the latest.

stimulus check
stimulus check

The Timeline For The Approval Of The Latest Stimulus Check

It is not easy to second-guess the actual date of the approval. The stimulus check package of $1.9 trillion could go to and fro several times at the Senate as it is subjected to amendments before finally making it back for the final round of voting.

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The Democrats who have a slender lead in both the chambers have set their eyes on March 14 as the deadline, as the current unemployment benefits run out. But any delay beyond that point could hurt the date of delivery of the third stimulus check.

Factors That Could Also Cause The delay In The payment

The IRS is stretched as it is now at the height of the tax season. The current pandemic has already affected their numbers. To facilitate the package, they will have to immediately process the tax forms of 2020 and simultaneously give out payments, which could severely affect the third stimulus payment.

How The Income Limit Could Potentially Affect The Third Stimulus Check

The maximum payment per person is $1,400 for the third stimulus. The legislation has decided to focus on the lower-income and households with middle-income for the $1,400 third stimulus check. Individuals, as well as families at the end of the bracket, will be excluded here. Individuals with $100,000 AGI and above a year would be exempted from the benefit. The same applies to families with income above $150,000; while couples with an Adjusted Gross Income above $200,000 would also disqualify.

However, a dependent claimed by a taxpayer could be eligible for the $1,400 package. But people would fail to receive a partial check in case of married couples who file jointly.

Will The Filing In The Previous Two Years (2019 & 2020) Be Used By The IRS To Decide The Amount To Be Paid 

The 3rd stimulus check will in all probability clash with the tax season date. So it is quite likely the IRS might calculate the sum of income based on either of the year’s returns, whichever they have access to, to arrive at the stimulus package amount to be paid. If it turns out that your payment is based on the 2019 taxes, but you are eligible for the complete payment of $1,400 according to the 2020 return, you can apply for the difference in your next filing in 2022.

How filing for a tax extension could affect the amount of the stimulus package and how an extension in the tax cut-off date beyond April 15 could change things.

Stimulus check
stimulus check

An Expected 3rd Round Of Payment By The IRS

It took the IRS along with the Treasury Department 5 days to pay the second payment beginning with former President Trump signing the stimulus checks bill in December. The window of 17-days helps the IRS given to detect errors. There are millions of errors in deposit and anyone claiming the third stimulus check can do so based on the 2020 filings. This forces the hands of people who otherwise don’t do so to file returns.

The IRS may also send out third stimulus payments based on the second payments. This would allow both non-filers and taxpayers to receive their checks and claim shortage as a Recovery Rebate Credit or something similar for the 2021 filing year in 2022. 

Looking At scenarios That Are Possible For The Upcoming Stimulus Check 

Is The IRS Staring At Another Deadline?

Given the tone of the Recent Bill Proposal, it appears that the IRS will be required to clear every third stimulus check by the last day of this year.

Getting Faster Payment This Year This Time Around

Filing tax returns and receiving the 3rd stimulus check are inextricably linked. You need to know a few salient features regarding how tax filings affect the 3rd stimulus check, both on the eligibility rule and your adjusted gross income of 2020. Taxes have also been linked to missing stimulus money and the onus will be on you to trace or claim the same. Though some Congress members have requested for extension of this year’s tax filings, the proposal hasn’t made much headway.

Filing taxes earlier will enable you to receive missing stimulus money faster and also a refund than if you file for a tax extension. Set up of direct deposit with the IRS is also recommended as it could speed up the process of getting the stimulus check. Address change should also be immediately communicated to the USPS and IRS.

Possible Changes Before The Finalization Of The 3rd Stimulus Check

One change could be the setting up of a hard income qualification cap. Two other possibilities are frequently used by democrats. The first might bring dependents of all ages under the qualifications of stimulus check. That includes 13.5M people more as per the People’s Policy Project. So college students, senior relatives, and dependents with disabilities of any age.

The other change in eligibility might include every “mixed-status households” where family members are not US citizens. For example, people who are US citizens though their parents are not. Under the 2nd stimulus checks scheme, families with one of the spouses being an American citizen were eligible. Undocumented workers might not cut the third stimulus check.

Reasons Some Might Lose Out In The 3rd Round

Crossing a stipulated limit for a household might disqualify them from receiving the third stimulus check. Other reasons could be a raise or claiming fewer dependents when the situation arrives this time. 

Why Some People Might Benefit Instead

One obvious reason for a larger payment this time around could be a greater maximum total for each person. The limit for the second payment was $600 for each adult plus $600 more for every child dependent. So based on the IRS rule, more people ended up touching the income limit ceiling for a second payment. So they ended up being disqualified in the second round.

This time around, tax-paying non-citizens and other such groups are eligible. Changes in circumstances could also make people qualified.

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