Fourth stimulus check news summary: 17 May 2021
US stimulus checks live updates: Monday 17 May 2021
- Today is IRS deadline day for filing 2020 taxes (more info)
- Residents of some states have longer to submit state tax returns (more info)
- IRS confirms that the expanded Child Tax Credit monthly payments will begin on 15 July (more info)
- Latest batch of payments sees one million stimulus checks sent to recent tax filers
- California sends out $600/$1,200 stimulus checks as part of the Golden State Stimulus scheme
- California Gov. Gavin Newsom proposes expanding Golden State Stimulus payments program
- Job fears, and price spikes mean heartburn for Biden White House as economy revs up
- IRS paying out unemployment-tax-break refunds (find out more)
- You can track your third stimulus check by using the IRS' online Get My Payment portal
Take a look at some of our related articles:
Despite having sent out over 165 million payments, the IRS is still in the process of distributing the third round of stimulus checks to eligible Americans. The $1,400 direct payments were included in the American Rescue Plan but, for some, things have been complicated by the ongoing tax filing season.
Filing your tax return late if you owe money to the IRS can be an expensive proposition. Not only could you face penalties for filing late but you will also face late payment penalties and interest to boot.
The Internal Revenue Service (IRS) pushed back the filing deadline for a second year in a row due to complications for taxpayers due to the covid-19 pandemic as well as to give extra time to take advantage of the numerous tax provisions created by the American Rescue Plan. Taxpayers have until midnight 17 May to file their return, ask for an extension and pay any taxes they may owe to the IRS.
The Internal Revenue Service (IRS) said that it would start sending tax refunds to those eligible for the $10,200 unemployment tax waiver this week and continue through the summer. Depending on the complexity of your tax return will determine how long you have to wait to see your refund.
Advanced payments will fall on the 15th of every month
The Internal Revenue Service and the US Department of the Treasury announced today that the first monthly payment of the expanded and newly-advanceable Child Tax Credit from the American Rescue Plan will be sent on July 15. Without any further action required, 88% of children in the United States are slated to begin receiving monthly payments. Payments will be made on the 15th of each month unless the 15th falls on a weekend or holiday.
Eligible families will receive a payment of up to $300 per month for each child under age 6 and up to $250 per month for each child age 6 and above. The American Rescue Plan is projected to lift more than five million children out of poverty this year, cutting child poverty by more than half. Additional information for taxpayers on how they can access the Child Tax Credit will be available soon at IRS.gov/childtaxcredit2021.
Child Tax Credit brief explainer
The enhanced Child Tax Credit will see the IRS send monthly payments worth up to $300 for children aged less than six, and $250 for those aged between six and 17. Individuals earning less than $75,000 or married couples earning less than $150,000 will be entitled to the full amounts, with the amount on offer gradually decreasing for higher-income households.
The new system will play a central role in Biden’s effort to tackle income inequality in the United States and is slated to provide support to 39 million households. Speaking to reporters on Monday, Biden said: “This tax cut sends a clear and powerful message to American working families with children. Help is here.”
Tax Day normally comes every 15 April, but again for a second year due to the pandemic and recent adjustments to the tax code to help struggling American households the filing date was pushed back. Taxpayers who owe taxes and haven’t filed their 2020 tax return will need to take action before midnight or face penalties from the IRS.
Tax Day has arrived and if you filed your tax return on time and overpaid the government, you’ll be wondering when you can expect your refund.
The IRS says that it usually sends out a refund within 21 days of receiving an online tax return, but this year the agency warns that it is taking longer. Those 2020 tax returns that require review due to claiming incorrect Recovery Rebate Credit amounts, or that used 2019 income to figure the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) can expect their refund to be delayed.
With just hours to go before the deadline for Tax Day 2021, most Americans have already submitted their tax returns for 2020. If you are owed a tax refund after your filing you will probably get the payment in the form of a bank transfer, but after a chaotic tax season the IRS is behind on the process.
They warn that refunds may take longer than usual as they oversee distribution of the third stimulus check and introduction of the new Child Tax Credit, as well as their tax adminstration duties. Here's how to track your IRS tax refunds online...
California stimulus checks are on their way
In addition to the federally-funded direct payments from the IRS, a large proportion of California residents are also in line to receive a Golden State Stimulus check as part of the state's recent relief bill. Gov. Gavin Newsom announced that eligibility for the payment would be expanded beyond the original remit to include roughly two-thirds of Californians.
But to be eligible for the $600 stimulus check you may first need to have submitted your state tax returns, which gives the California Tax Franchise Board the information required to make the payment.
How are Americans spending stimulus checks and tax refunds?
The covid-19 stimulus checks were designed to provide immediate relief to struggling households during the pandemic. However not all recipients are spending their federal support in the same way, with many opting to save both the stimulus checks and any tax refunds that they may be due after filing their return.
A new study from Credit Karma, which surveyed more than 1,000 adults in April, found that 47% of Americans are planning to save their refund. More than half of those asked said that the refund would be essential to their short-term financial security.
Earlier today President Biden announced that the new Child Tax Credit will be introduced in July as planned. There had been fears that the programme, which is overseen by the IRS, may be delayed due to the tax authority's busy schedule during tax season.
The new programme will provide monthly direct payments for eligible families and is slated to provide support to 39 million households. Speaking to reporters at the White House, Biden said: “This tax cut sends a clear and powerful message to American working families with children. Help is here.”
New Child Tax Credit is on the way
Months after the new programme was first announced, the US Treasury has confirmed that the overhauled Child Tax Credit will begin from 15 July. The new provision will see monthly direct payments worth up to $300 per child sent to eligible parents.
The White House is optimistic about the positives of the new programme and have said that the monthly payments could halve the number of children in the US living in poverty over the next year. The Biden administration is attempting to secure a four-year extension to the programme in the American Families Plan.
Stimulus checks spur record-breaking income increase
It goes without saying that the covid-19 pandemic has had a catastrophic effect on the American economy and on individuals' personal finances. To mediate that damage the federal government has sent out three rounds of stimulus checks, two of which were distributed in the early months of 2021.
This saw up to $2,000 sent to each eligible American and has had a significant impact on personal finances. Research from Cornerstone Macro has found that the stimulus check influx left national disposible personal income level considerably higher than the pre-covid levels, and suggests that a consumer spending boom is on the cards.
Child Tax Credit payments will begin 15 July
Speaking to reporters in the White House earlier today, President Biden has confirmed that the new-look Child Tax Credit will begin in July, as was the initial target. The new system will see monthly direct payments sent out to recipients, with parents sent up to $300 per child.
Biden said of the move: "For working families with children, this tax cut sends a clear message: help is here." The process will be administrated using an online portal currently being developed by the IRS.
Earlier this year the IRS agreed to extend the federal tax return deadline by a month to allow struggling Americans extra time to reconcile a year with various financial relief programmes. The pandemic have made things difficult but failure to get your returns filed before the deadline could see you hit with financial penalties.
Here's what you need to know about the Monday 17 May deadline, and what to do if you think you will need an extension.
White House encourages tax filing to trigger stimulus check payments
Speaking to reporters earlier today, White House Press Secretary Jen Psaki called on Americans to complete their 2020 tax returns by the end of the day. Today is the deadline to get your filings in and avoid facing late penalties.
However as Psaki points out, filing on time could also secure you additional stimulus check and Child Tax Credit payments. Eligibility for both is based on information provided in tax returns, which may have altered significantly since last year's filing.
The IRS has confirmed that another one million direct payments were sent out last week, as part of the third round of stimulus checks. In total over 165 million stimulus checks have been sent out and the process is set to continue for the rest of the year.
But with so many having already received their payments, attention is already turning to the prospect of a fourth stimulus check, something that has garnered support both in Congress and across the country. The White House is reportedly considering introducing triggers that would automatically send out a fourth stimulus check, but Biden has remained tight-lipped so far.
Filing taxes could earn you another stimulus check payment
It's important that your file your 2020 tax returns with the IRS today to avoid being stung with late penalties, but it could also impact your eligibility for several forms of federal support. All three rounds of stimulus checks, as well as the upcoming Child Tax Credit payments, use tax return information to judge who is entitled to receive the money.
For some people, submitting a tax return will make them eligible for the stimulus check payments for the first time which means they would be in line for a payment. The IRS will continue making 'plus-up' payments for the rest of 2021 as they look to get money out to those who were underpaid in previous stimulus checks.
File your tax returns today to avoid facing penalties
Today's the day! After issuing an extension the deadline to get your federal tax returns submitted to the IRS is Monday 17 May, and you have until midnight tonight to complete the process. If not, you could be hit with fines for failure to file and failure to pay an outstanding tax balance on time, amongst other things.
If you think you will not be able to complete your filing on time you should definitely consider applying for a extension from the IRS, which will give you an additional six months to complete the filing. However bear in mind that this only excuses you from the late filing penalty, and you could still be hit with other fines.
Monthly child tax credit payments to start hitting bank accounts on July 15
The Biden administration announced on Monday that about 39 million families will begin receiving monthly child tax credit payments for the first time starting July 15.
The payments, which are part of the expanded child tax credit program in the American Rescue Plan, are expected to dramatically reduce child poverty, administration officials said.
For the first time, the payments, normally given annually as tax refunds, will be distributed monthly. Because the advance payments are beginning halfway through the year, families will get the second half as tax refunds.
Can I get the $1,100 Golden State stimulus if I got the $1,200 or a third stimulus check?
California had a record budget surplus in 2021, on top of expected federal stimulus money, which has enabled the Governor to propose his $100 billion covid-19 relief bill for the state. Part of his proposal is “the biggest state tax rebate in American history,” allocating nearly $12 billion to direct payments.
The new tax rebate will include millions who didn’t receive a $600 stimulus check in the previous Golden State Stimulus enacted in February. It’s estimated that around 11 million taxpayers will receive a $600 payment in the latest round of Golden State Stimulus.
New eligibility limit matches federal limit to receive $1,400 stimulus check
In the first round of stimulus payments that began going out in April was targeted at low-income workers making less than $30,000, including those who are undocumented but have an ITIN number. About 5.7 million people qualified for the first round of $600 payments. This latest round will target middle-class households earning up to $75,000 a year and which did not receive payment from the first round of Golden State Stimulus again including taxpayers with an ITIN.
The Californian Franchise Tax Board (FTB) is in the process of distributing a round of $600 stimulus checks to recipients of the California Earned Income Tax Credit (CalEITC). The direct payments are part of the Golden State Stimulus bill that was passed in February by Gov. Gavin Newsom.
The eligibility requirements for the Californian stimulus checks were notably narrower than that of the three rounds of national payments that have been sent during the pandemic.
They were designed to provide immediate relief to vulnerable Californians, and so were largely restricted to CalEITC recipients. But who is eligible for CalEITC relief, and how much is the annual tax credit worth?
Medical bills, food, investing and mortgages: How Americans are spending their tax refunds, stimulus
Medical bills, food, mortgages and investing. These are some of the things Americans plan to spend their tax refunds and stimulus checks on after many lost work or got hit with extra expenses during the coronavirus pandemic.
Catherine Carver, for instance, put all of her tax refund and stimulus toward lowering her medical debt. In 2019, she was diagnosed with Fragile X syndrome, a genetic disorder that causes a range of developmental problems. She’s had unexpected health issues come up during the pandemic requiring a few emergency room visits and physical therapy.
“My tax refund and stimulus checks have, unfortunately, been going 100% toward paying off debt,” says Carver, 30, who lives in Indianapolis and works as an assistant director at a state financial aid support center.
“At this point," she says, "every little bit helps.”
Households including most US children to get monthly stimulus payment
Reuters - A poverty-fighting measure included in the covid-19 relief bill passed this year will deliver monthly payments to households including 88% of children in the United States, starting in July, Biden administration officials said on Monday.
The Democratic-backed American Rescue Plan, signed into law by President Joe Biden in March as a response to the coronavirus pandemic, expanded a tax credit available to most parents.
Those people will get up to $3,000 per child, or $3,600 for each child under the age of 6, in 2021, subject to income restrictions. The benefit will reach 39 million households, many automatically and by direct deposit every month, starting on July 15.
Congress may not give you a fourth stimulus check
Here are 9 ways to make your own:
President Joe Biden has left it up to Nancy Pelosi and Congress to decide whether you’ll receive a fourth stimulus check.
With Biden passing the political football and Pelosi focused on the “urgent” priority of passing Biden’s infrastructure bill, the prospects for a fourth round of payments are murky at best.
It’s now been two months since the third checks started going out, and unless you’re set to receive a “bonus payment” from the IRS, you shouldn't count on any further government cash anytime soon.
The good news is that, with a little creativity, you can essentially generate your own stimulus: Here are nine easy ways to do it.
How many people are getting unemployment tax break refund?
Around 40 million people received unemployment benefits in 2020 which are taxed by the federal government and some states, which may have come as a surprise to many who had never received out of work compensation. Of those who had claimed jobless aid the IRS said over 10 million had filed a return prior to President Joe Biden signing the American Rescue Plan on 11 March.
What do I do if I still have not received my stimulus check?
The IRS is asking all those who believe they qualify for an Economic Impact Payment to submit a tax return this year. Even if families do not normally have to file their taxes, this year they should as with that information, the IRS is able to determine if individuals or families qualify to receive a check.
How much is the fine for filing a late tax return?
There is no flat amount that you will be charged by the IRS if you do not submit your tax returns before the deadline, and the amount will grow over time if you do not act quickly. The tax authority will fine late filers 5% of their unpaid tax required to be reported for each month that the return is not submitted. This is capped at 25% of the original amount.
Rough waters ahead for Biden
Republicans, divided by former President Donald Trump's false claims that the 2020 election was stolen from him, have seized the moment to knock the foundation of Biden's economic plans - raising taxes on the wealthy and companies.
"You won't find any Republicans who are gonna go raise taxes. I think that's the worst thing you can do in this economy," House Republican leader Kevin McCarthy told reporters outside the White House, citing inflation fears and gas prices.
The U.S. Chamber of Commerce, the powerful corporate lobby group, is pushing for repeal of special unemployment payments that were a cornerstone of Biden's campaign, and over a dozen state governors have decided to roll them back early.
With 7.5 million more people either unemployed or out of the job market altogether compared to before the pandemic, even a month or two more of weaker-than-expected job growth and rising prices would up the pressure on Biden and the Fed.
How to track your IRS unemployment refund
As the IRS is in the middle of a busy tax season, and is also overseeing the distribution of the third stimulus check and the impending introduction of the new Child Tax Credit, their resources are very stretched at the moment. They warn that it is taking longer than the usual 21-day target to issue refunds for the last tax year, with those who filed on paper experiencing the longest wait.
But you can track the state of your tax refund using the IRS’ online portal, Where's My Refund?To take advantage of the useful resources, you will simply need to input the following information: Your social security number or ITIN, filing status and exact amount you are owed as a refund.
How to file for a tax extension from the IRS
Individuals who would like an extension can do so by submitting “Form 4868” on or before 17 May according to the IRS. This can be done through your tax professional, tax software, using the IRS’ Free File or by mail. However, given the proximity of Tax Day it would be wise to do so electronically to avoid a late-filing penalty from the IRS.
Using IRS Free File, a partnership between the IRS and Free File Alliance providing access to free, name-brand tax preparing software, taxpayers can request an extension. You will need to follow the program’s instructions to electronically file for an extension to have the filing deadline postponed to 15 October, 2021. Once the request has been made the IRS will send you a message to acknowledge that the form was submitted correctly. The Free File service is available to any taxpayer who has earnings of less than $72,000 annually to file for free, but the software is available to those with earnings above the threshold.
If you choose to send the application for a tax extension by mail, you will need to fill out Form 4868 on paper and have it postmarked on or before 17 May, 2021. You will want proof that you mailed it in time avoid a late-filing penalty from the IRS.
Republican Party allude to long term stimulus damage
Some Republicans have made public comments alluding that they believe that the US government has passed too much stimulus and that it will damage the US economy in the long run. These criticism stem from several labor shortages several states are experiencing.
The governors of Montana, South Carolina, and Arkansas have stated that they will end all additional unemployment payments to those who lost their job because of the pandemic to encourage workers to reenter the workforce. These leaders believe that the $300 a week topper provided by the federal government encourages people to claim unemployment benefits when they are more than capable of finding a job. Economists and the Biden administration disagree, saying that the shortage has less to do with unemployment benefits and more with low wages offered across the country; a shortage of any good is an issue of supply and demand.
Build Back Better and a fourth stimulus check
President Biden’s ‘Build Back Better’ campaign is on the economic agenda with the complete package hoping to help the US economy overcome the impacts of the covid-19 pandemic, modernize industries, and improve conditions for workers.
However, there is growing pressure from some House and Senate members to send another payment in the next few months
Do these pieces of legislation include funding for a fourth stimulus check? At this point, no. In their current form, neither of these proposals includes funding for an additional stimulus payment.
However, there is growing pressure from some House and Senate members to send another payment in the next few months.
IRS offer tax help on deadline day
The IRS social media team have developed a short video to help filers with any last minute doubts
How much were the first, second and third stimulus checks and when were they sent out?
There have been three rounds of federal stimulus aid in the US since the start of the pandemic under two different administrations. We take a look back at them.
How many people are getting an unemployment tax break refund?
The IRS announced that over 10 million had filed a tax return before the American Rescue Plan was enacted providing unemployment tax break.
White House wouldn’t offer a timeline for when the economy will smooth out
The White House wouldn’t offer a timeline for when the economy will smooth out. But it doesn't expect a repeat of April's weak jobs report, and recent data show applicants for unemployment benefits fell to a 14-month low.
"The trend lines continue to be positive," a senior White House official told Reuters. The White House also believes the Fed can handle what comes up, he said.
"We haven't seen anything that is suggested that the Fed doesn't have an ample toolkit to manage any of the risks that might present themselves."
Bumpy economic road ahead amid ongoing support for Biden
Support for Biden remains strong and U.S. equity markets remain near record highs. The White House says there's bound to be surprises as the United States emerges from an unprecedented pandemic.
"We must keep in mind that an economy will not heal instantaneously," Cecilia Rouse, the chair of the White House Council of Economic Advisers told reporters. "It takes several weeks for people to get full immunity from vaccinations, and even more time for those left jobless from the pandemic to find and start a suitable job."
Rouse, speaking to reporters at the White House, said a mismatch between supply and demand due to the pandemic and the economic snap-back had pushed inflation higher but that the mismatch should prove temporary.
"I fully expect that will work itself out in the coming months," she said.
Global stocks steady
Global shares paused on Monday after a strong end to the prior week, while gold hit a three-month high as surging covid cases in some Asian countries and inflation pressures tempered demand for riskier assets.
Global shares paused on Monday after a strong end to the prior week, while gold hit a three-month high as surging covid-19 cases in some Asian countries and inflation pressures tempered demand for riskier assets.
Markets have been skittish in recent weeks as bumper supplies of central bank stimulus and rising prices in the United States and other countries fuel concerns some economies could overheat, requiring policymakers to tap on the brakes.
How filing a tax return could help you get third stimulus check plus-up payments
The IRS is continuing to make the direct payments as more Americans file their tax returns. Could you be eligible for more than you have received so far?
Make sure to get your tax returns filed promptly to avoid being hit with financial penalties from the IRS. If not, make sure to request an extension from the tax authority.
Who qualifies for the Earned Income Tax Credit (EITC) in California?
To receive a Golden State Stimulus check you must also be eligible for the CalEITC, but what is it and how much is the Californian tax credit worth?
Which states have extended their deadline?
The IRS altered their tax return deadline but not all states have decided to do the same. However some have offered extensions to victims of the recent winter storms.
The deadline to file your federal tax returns with the IRS is drawing close and anyone yet to do so has until the end of Monday 17 May to get their filing completed. It is important that you do so to avoid being charged a penalty for late filing, or request a tax return extension.
The IRS opted to extend the deadline by two months to allow Americans more time to reconcile their finances after a year unlike any other. As such, many states chose to extend their own tax deadlines similarly but some have decided to implement their own rules.
The extended IRS deadline applies to individuals for their federal tax filings, but the picture is much more varied when it comes to state taxes. A total of 35 states (including DC) have also adopted the 17 May date for their state taxes deadline.
Those states are: Arkansas, California, Connecticut, Colorado, District of Columbia, Delaware, Georgia, Illinois, Indiana, Kansas, Kentucky, Massachusetts, Maine, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, North Carolina, North Dakota, New Jersey, New Mexico, New York, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, West Virginia and Wisconsin.
US stimulus checks live updates: welcome
Welcome to our live US stimulus-checks blog for Monday 17 May. We’ll be bringing you updates on a possible fourth direct payment and updates on the third stimulus check, which the IRS has been distributing since the $1.9tn American Rescue Plan was signed into law in early March.
We'll also provide information on other economic-aid schemes such as the expanded Child Tax Credit, which gives qualifying households up to $3,600 per child per year, and the Golden State Stimulus payments going out in California, where Governor Gavin Newsom has announced plans include more residents of the state in the program.
And as with today being the deadline for IRS tax-filing, you’ll find information here on submitting your 2020 return.