When was the first stimulus check sent out and how much was it?
We have already seen two rounds of federal coronavirus relief and the promise of a third stimulus payment, via the American Rescue Plan, is in the pipeline.
US President Joe Biden outlined that tax-paying Americans will receive a third stimulus check, for up to $1,400, as part of his $1.9tn American Rescue Plan (ARP). If approved, it will be the third round of direct payments and unlike the previous relief programmes, may not be available to those on high incomes. Biden’s ARP announcement comes less than a month after Donald Trump signed off a $900 billion covid-19 Relief Bill but it still needs to get through the Senate and that may not happen until late February/early March according to some analysts.
Biden’s ARP proposal
- Total budget: $1.9 trillion
- Total stimulus check for lowest earners: $1,400
- Weekly Federal Unemployment Benefit: $400 per week through September
- Amount for dependents of all ages: $600
- Amount available for coronavirus test, trace, treatment: $160bn, including vaccine budget, equipment and personnel.
Biden explained in a White House statement, “While the covid-19 package that passed in December was a first step, as I said at the time, it’s just a down payment. We need more action, and we need to move fast. The first step of our American Rescue Plan is a plan to tackle the pandemic and get direct financial relief to Americans who need it the most”. He added that the ARP package “would create 7.5 million jobs in this year alone.”
However since then, some Republicans such as Susan Collins, Joe Manchin and Mitt Romney have voiced doubts about passing another, huge relief bill just weeks after the last one and have argued that while many struggling Americans might need more economic aid, the more affluent don’t. The counter to this is that those people who don't require the extra money to survive will pump it back into the economy.
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First covid-19 stimulus bill signed off in March 2020
The CARES Act was signed into law by previous president Donald Trump on Friday 27 March 2020. That first round of stimulus payments were for $1,200 checks, with $500 for each eligible dependent under 16 years of age, with a limit of three dependents.
The payments were made to everyone earning under the income limits, which were set at Adjusted Gross Income of $75,000 ($150,000 for married couples filing jointly) with the stimulus check value reducing in a tapered fashion up to a maximum of $99,000 ($198,000 for married couples filing jointly). The very first stimulus checks were paid into people's bank accounts over the weekend of the 11 and 12 of April, either via direct deposit into individuals’ bank accounts, paper checks sent through the post or in some cases, through a prepaid debit card, the Economic Impact Payment (EIP) Card which were sent out in May last year.
Proposals for a second bill
By July, there were proposals for a second stimulus bill, the CARES 2 package was reviewed by the administration and an agreement in principle was reached on the basic points outlined in the package but it was never passed. Nor was the HEROES Act, a $3 trillion economic stimulus bill which was passed by the House by a vote of 208–199 on 15 May 15 2020 but never reached a Senate vote.
Second round of direct payments: December 2020-January 2021
The second round of aid, a $900 billion package which was part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 was signed off by Trump on 27 December 2020. It provided a check of up to $600, with households also able to claim an additional $600 for child dependents aged 16 or under. Those who earned under $75,000 in the 2019 tax year received the full stimulus check, while a steadily smaller figure was given to those on a higher annual income, up to a maximum phase-out limit of $87,000. The first payments, through direct deposit and paper checks with some later payments made by EIP 2 Cards, were issued between 29 December 2020 and 15 January 2021.
Those who didn’t receive a stimulus payment either through the CARES Act or the December Covid-19 Relief bill can still claim for it retroactively when filing their federal tax returns for 2020 through the Recovery Rebate Credit. This year, the tax season will start on Friday 12 February, when the tax agency will begin accepting and processing 2020 tax year returns. Individual income tax returns can be filed from that date until Thursday 15 April. Claimants will also be able to claim any additional money owed by the IRS from the first round of payments sent out earlier in 2020 as a credit.
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