Fourth stimulus check news summary: 21 May 2021
US stimulus checks live updates | Friday 21 May 2021
- Leading Dems call for direct payments to be made permanent (full story)
- Expanded Child Tax Credit monthly payments will begin on 15 July, continuing for at least 6 months
- The IRS tax return deadline has now passed; however some states have issued extensions for their own tax day (read more)
- Over six million “plus-up” stimulus check payments have been sent out, a total of $13 billion
- US dollar bounces against European currencies after Federal Reserve reveals talk of tapering bond purchase
- Retail giants report positive economic outlook after stimulus check influx and reopening boost
- Benefits of delaying Child Tax Credit payments (full story)
- 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
- 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:
Can an employer ask if you're vaccinated in the US?
With more and more people getting vaccinated businesses are struggling to establish covid work place safety requirements. OSHA and the Equal Employment Opportunities Commission have stated that they will be looking at the new information on masks from CDC and develop guidance.
Read our full coverage here.
Concerns over inflation are increasing in some economic circles.
Wall Street Journal reports on what has economist Lawerence Summer worried.
Leading Dems call for direct payments to be made permanent
How long will the monthly Child Tax Credit last?
President Biden is attempting the extend the expanded Child Tax Credit through 2025, but many from within his own party want to make the monthly payments permanent.
Read our full coverage on the negotiation and proposal to extend the Child Tax Credit here.
Child Tax Credit 2021: how many families will receive the payment from July?
The IRS have confirmed that the monthly payments will be sent out from July, but how many American households will receive the support and for how long?
Read our full coverage from William Gittins here.
$10,200 exclusion: When will the IRS return the unemployment tax refunds?
The American Rescue Plan passed by Congress in March made changes to the way unemployment benefits can be taxed. The bill included the “exclusion of unemployment compensation of up to $10,200 for individuals for taxable year 2020” to help support families who have seen falls in their income over the last year.
Full details on when payments should arrive here.
Deep Dive: Morning Star looked at how Macy's is weathering the economic crisis caused by the pandemic.
Stimulus mortgage program: how to apply to pause mortgage payments
In March 2020 former President Donald Trump passed the CARES Act, a $2.2 trillion financial relief package that aimed to provide federal support for those affected by the pandemic.
Included in the legislation was a new programme designed to help those struggling to make mortgage payments: forbearance. If you are temporarily unable to cover the cost of mortgage payments you can apply to pause or reduce your regular payments and face no additional financial penalties.
Forbearance does not completely erase your outstanding payments and you will still be expected to repay any payments that you miss, but it does offer much-needed respite during a tough time.
Read our full coverage here.
Still waiting for your tax return? Read our full coverage to understand why the IRS is experieicng delays. Full details here.
Since the beginning of the pandemic, 12,000 stores have closed. Additionally, major retailers including Best Buy and Macy's have closed locations and let go of workers as sales dropped dramatically. Market Watch reports that those stores who have been able to weather the economic crisis storm caused pandemic are posed to do very well in the future.
Aid for Black Farmers
Washington Post reports on Black farmers who will receive millions in federal aid. This move comes as historic exclusion of Black and minority farmers came under scrutiny, forcing the government to act. Full details here.
Economist Paul Egan writes about the relationship between increase in prices and inflation in Michigan for the Detroit Free Press. Full details here.
How to get your Child Tax Credit payment
The American Rescue Plan instigated a complete overhaul of the Child Tax Credit programme, which will see eligible parents receive the money as a direct payment, much like the stimulus checks. However although the majority of recipients should get the money automatically, some non-filers may be required to provide additional details to the IRS.
Check out this handy guide for all the information you need on the upcoming Child Tax Credit payments...
The IRS has been sending out the third round of stimulus checks for over two months and in that time more than 165 million Americans have received a direct payments worth up to $1,400. The majority of payments have been sent but as the tax agency processes 2020 tax returns it will continue to send out additional payments.
For some recipients, the stimulus check payments were sent out before they had submitted their 2021 tax returns. This meant that their stimulus check eligibility was based on the previous year's tax information, meaning that they may have missed out on potential support.
Are stimulus checks a good idea?
Talk of a potential fourth stimulus check has been met with enthusiasm, but some experts say that the long-term impact of such massive federal spending is still unknown. The most recent round of stimulus checks took the maximum total to $3,200 per person, meaning a huge outlay for the roughly 160 million people who have received each round of payments.
Here, a former economic advisor for both the Clinton and Obama administration outlines the potential problems with another orund of stimulus checks.
New Child Tax Credit marks a significant change from previous support
In announcing the passing of his American Rescue Plan, President Biden spoke about the $1.9 trillion package as a new era of federal support for working Americans. Included in that bill was a complete overhaul of the existing Child Tax Credit programme, which had previously provided just a single annual tax credit rather than monthly direct payments.
In the past the credit was only partially refundable, meaning that low-income families could not receive the full amount.
After announcing more details about both the American Jobs Plan and the American Families Plan, Biden has hosted a number of White House meetings as he looks to build bipartisan support for his proposals. But while he remains confident, there is little to suggest that a significant number of Republicans will vote for a large-scale stimulus bill.
The $1.9 trillion bill included a third round of stimulus checks, worth up to $1,400 per person, but faced universal opposition from the Republicans. Over the course of three votes in Congress, not a single GOP lawmaker voted in favour of the package.
Retail boost from stimulus check cash influx
The US retail sector has had a very tough year with finances tight and customers unable to enter stores for much of the last 14 months. However the recent financial reports from companies like Walmart suggest that the recent rounds of stimulus checks have had a significant impact.
Walmart's sales increased by 6% in April 2021, compared to the same month last year, and this report from Morning Star credits the stimulus checks for that growth: "Stimulus played a role, particularly in the US, where we were encouraged by Walmart’s general merchandise strength."
How to prepare for the Child Tax Credit payments
The reformed Child Tax Credit will be unlike anything offered to parents in the past, with monthly direct payments worth up to $300 per child. The IRS have confirmed that the payments will begin on 15 July but there is still some confusion about what the recipients need to do.
In general, the direct payments will be distributed automatically but some non-filers may need to provide additional information to the IRS. For all the details, check out this handy explainer...
A fourth stimulus check was not included in Biden's recently-announced American Families Plan, but there are reports that the President is now considering adding direct payments to the package.
It is thought that Biden will concentrate first on passing the American Jobs Plan, the infrastructure bill, but much of the public focus remains on the American Families Plan. A number of Democrats in Congress have publically insisted that stimulus checks be included in the bill, but the White House is remaining tight-lipped for now.
“Democrats’ American Rescue Plan is making a dramatic difference in the lives of America’s working families, particularly for America’s children, as it helps cut child poverty in half. Nearly 90 percent of our nation’s children will benefit from the expanded Child Tax Credit alone, with families receiving up to $300 per child each month."
“We must make this lifeline permanent, which is why Congressional Democrats will continue to champion an expanded Child Tax Credit – because we can only Build Back Better by putting families first.”
How much can I get from the new Child Tax Credit?
The new programme is set to begin from 15 July with monthly payments going to 39 million American families. The IRS estimate that 88% of children in the US will be covered by the new-look Child Tax Credits, but working out your entitlement can be a bit confusing.
Your Child Tax Credit payments will be based on your household income, personal situation and the number of child dependents claimed for on your latest tax return. To work out how much you will get, try out this Child Tax Credit online calculator...
Although the IRS has confirmed that payments for the third round of stimulus checks will continue for the rest of 2021, there is a growing appetite, both in Congress and across the country, for another round of direct payments.
In recent weeks President Biden has largely refused to comment on speculation that a fourth stimulus check is in the offing, but reports suggest that his White House are looking into the possibility of introducing "automatics stabilizers" which would see stimulus checks automatically distributed if the economic recovery stagnates in the future.
California to expand stimulus checks to two-thirds of residents
In February the California state legislature passed the $9.6 billion Golden State Stimulus bill, a state-wide relief package aimed at providing support to individuals, families and businesses who were most affected by the pandemic.
However after announcing a considerable budget surplus, Gov. Gavin Newsom has decided to follow up that package with the Californian Comeback Plan. This new bill would see stimulus checks sent to roughly two-thirds of residents, which would make it the largest state-specific relief bill to be passed during the pandemic.
Confusion over the source of recent stimulus checks
Despite not receiving a single vote from Republican lawmakers when it was put to a vote in Congress, a recent study has found that a third of a specific group of voters relate the third stimulus checks to the GOP. President Biden opted not to include his own signature on the physical stimulus checks but did send out an accompanying letter explaining that it was his government who had pushed through the financial relief.
How to receive the new Child Tax Credit payments
Earlier this week we got more details about the reformed Child Tax Credit, which is set to provide monthly payments of up to $300 per child for eligible parents. The new system comes into play from 15 July, but some are unsure about how to access the support.
As is explained here, for the vast majority of Americans those payments will arrive automatically, although some non-filers may need to provide their banking infomation to the IRS to facilitate payment.
Child Tax Credit is "a step in the right direction"
Jess Morales Rocketto of Care in Action US speaks to MSNBC about the potential benefits that the reformed Child Tax Credit could have on American families. The cost of childcare is often cited as a key reason why women sometimes struggle to return to the workplace, but it is hoped that the monthly CTC payments may provide the financial support needed to smoothen the transition back to work.
Fourth stimulus checks: when will the next relief bill be discussed?
President Biden is holding White House meetings with bipartisan groups to discuss the next stage of his Build Back Better plan, but are stimulus checks on the agenda?
On 28 April President Biden announced details of his American Families Plan, the third part of his administration’s Build Back Better legislative agenda. A fourth stimulus check was not included at that time but there are reports that the President is now considering adding direct payments to the package.
It is thought that Biden will concentrate first on passing the American Jobs Plan, the infrastructure bill, but much of the public focus remains on the American Families Plan. A number of Democrats in Congress have publicly insisted that stimulus checks be included in the bill, but the White House is remaining tight-lipped for now.
States seeing budget surpluses
Many states are seeing budget surpluses and are weighing a variety of options as to how they will craft their yearly budget and spend the federal aid money they will receive as a part of the American Rescue Plan.
Fast Company reports on poll that finds almost two-thirds of voters support the sending of an additional stimulus payment.
Find details here
Usually, taxpayers receive their returns within twenty-one days of filing. This year, the IRS has stated that some could see delays in receiving their return. There are two main reasons the IRS is experiencing delays in getting taxpayers their returns promptly. The first is the last-minute changes to the tax code under the American Rescue Plan passed in March. The second is a backlog of paper returns from 2019 that the IRS is still working through.
Full details here
One of Washington DC's Representatives-at-large is proposing that the city government send "Stimulus Checks Worth Up to $10,000 for DC Residents Who Qualified for Unemployment Insurance and Pandemic Unemployment Assistance Since March 2020"
Read the full letter here
North Carolina Governor proposes using federal funds from the American Rescue Plan to provide families in his state with a stimulus check.
US stimulus checks live updates: welcome
Welcome to our live US stimulus checks blog for Friday 21 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.