Second stimulus check: how many people will be eligible after $40,000 limit?

The IRS sent out 159 million stimulus checks by June but that number could drop with the new $40,000 income limit mentioned by Republicans in new package.

Second stimulus check: how many people will be eligible after $40,000 limit?

Donald Trump says stimulus checks will be coming "very soon" and Mitch McConnell, the Republican senator from Kentucky, says the checks will target lower income families. It was previously believed we might have to wait until August before word of a second stimulus check but it has been all but confirmed that there is something in the pipeline.

"I think the people who have been hit the hardest are people who make about $40,000 a year or less. Many of them work in the hospitality industry. The hospitality industry, as all of you know, just got rim-racked - hotels, restaurants - and so (more stimulus checks) could be part of it," adding: "the country needs one last boost," McConnell said as he got specific about who would be targetted with the second stimulus check.

FILE PHOTO: U.S. President Donald Trump holds his first re-election campaign rally in several months in Tulsa, OklahomaFILE PHOTO: U.S. President Donald Trump reacts to the crowd as he arrives onstage at his first re-election campaign rally in several months in the midst of the coronavirus disease (COVID-19) outbreak, at the BOK Center in Tulsa, Oklahoma, U.S., June 20, 2020. REUTERS/Leah Millis/File Photo

Trump, for his part, said: "We are working on another stimulus package, and that will take place... very soon." He also said that he supports bigger numbers than the Democrats although McConnell has reportedly set the limit for the new stimulus package at $1 trillion. Trump continues to talk up, and push for, a second stimulus check with his bid to be re-elected as the president of the United States possibly hinging on how he can help Americans in a tangible way.

Who will be eligible for the next stimulus check?

With news of that $40,000 income limit, it means millions of Americans will miss out on the check -- possibly 20 million. A Federal Reserve reports said that 39% of people with an income below that fixed amount in February had lost their jobs by the time the coronavirus had started to sweep across the world in March, most of them remain unemployed. Another 6% of people on top of that had their hours reduced. These are clearly the people Republicans are trying to help with the next round of payments.

The Economic Impact Payments — EICs — that were sent out first time around had a limit of almost double the amount mentioned by McConnell. You were eligible if you made $75,000 back then but obviously the new figure will affect millions.

As of the start of June, the IRS said it sent out 159 million checks to Americans. According to a data, 131 million Americans made less than $40,000 in 2018. Because the checks are based on previous filing years, this figure might be a good indication of how many people will be eligible for the second stimulus check.

Another aspect to point out as details emerge of negotiations is that those who did not qualify for the first round of payments due to earning too much will be able to claim back the money next year as a tax credit. Another option like this might be available in the second stimulus package as Republicans and Democrats alike appreciate the need for economic help for the most vulnerable Americans and others who have struggled during the pandemic too.