Fourth stimulus check and child tax credit summary: 1 August 2021
Stimulus checks: live updates 1 August
- Schumer remains confident about future of infrastructure bill (Details)
- AOC slams Congress inaction on eviction moratorium
- US poverty rate has dropped 45% this past year, reports the NYT
- States use stimulus funding to provide 'thank you' bonuses for educators (Details)
- IRS struggles to get Child Tax Credit payments to low-income families (Details)
Useful information / links
What is IRS TREAS 310 and how is it related to 2020 tax returns? (Details)
IRS Child Tax Credit portal: how can I use it to opt out? (Details)
How much money can you get from stimulus checks and the Child Tax Credit? (Calculate)
Child Tax Credit | When is the deadline to opt-out of the August payment? (Details)
US Congress 101 | What is a reconciliation bill and how is it different from a normal bill? (Details)
Still waiting for your tax refund? Find out when to contact the IRS
Have a read of some of our related news articles:
Lawmakers in Washington are continuing to discuss the fate of President Biden’s huge infrastructure proposal but there is one glaring omission from the legislation.
Biden is showing no sign of considering including a fourth stimulus check in the multi-trillion package, opting to favour less direct forms of financial stimulus. However many in Congress and across the United States would like to see another stimulus check and they will retain hope of convincing Biden of the merits.
The new-look Child Tax Credit overhauls not only the size of the payment on offer but also the way in which the money is distributed. No longer a single end-of-year tax credit, the new programme offers monthly payments for eligible families.
From 15 July the IRS began sending out the first round of recurring payments, worth up to $300 for each child under the age of six and $250 for those aged between six and 17. However some families are choosing to opt out of these regular payments, with some interesting consequences for their tax returns.
State and school district administers are coming up with creative ways to use additional stimulus money for education passed as a part of the American Rescue Plan.
With many children at home during the pandemic, teachers had to adjust their curriculum and lessons for a virtual space. More than six states and districts are offering teachers a bonus or thank you payment for their work throughout the pandemic.
Are stimulus checks a good idea?
President Biden seems unwilling to commit to a fourth stimulus check at this stage despite calls from within his own party for another round of direct payments. The President is looking to focus on other priorities to help the US economic recovery, such as the Child Tax Credit and the ongoing infrastructure proposals.
He is not the only one unsure about the benefits of a stimulus check. In this video, leading economists discuss the negative impact that an influx of federal money can have on the economy.
On 12 July, California Gov. Gavin Newsom signed SB 129 into law, approving the majority of the state’s 2012/22 budgetary agreement. The centre-piece inclusion in the package was the $100 billion California Comeback Plan, the largest economic recovery bill in the state’s history.
It included a round of stimulus checks covering around two-thirds of Californians, but when will this huge round of direct payments be distributed?
Where's my IRS tax refund?
The tax agency is working through a backlog of unprocessed tax returns believed to have reached 35 million in July. Understandably, this has had a knock-on effect for those waiting for a tax refund from the IRS.
More people that ever are expected to be eligible for the payment after the American Rescue Plan retrospectively made the first $10,200 of unemployment benefits received in 2020 tax-free. If you're still waiting for a refund, here's everything you need to know...
Opting out at this stage prevents you from receiving any more of the credit until the end of the tax year, at which point you will receive the entirety of your remaining entitlement. However, the IRS have promised to introduce additional functionality on the portal so families who opt out and change their mind can rejoin the monthly payments.
Stimulus checks have been the most effective weapon against poverty
Of the various policies and programmes implemented during the pandemic, researchers have found that the three rounds of stimulus checks have had the greatest impact on tackling poverty in the United States.
Elaine Waxman, senior fellow at the Urban Institute, the left-learning organisation that carried out the study, said that stimulus checks have been the most effective tool. She says it has shown “the power of cash to reduce poverty," adding that their flexibility made them “available to broadly cover the needs of the household."
Biden reportedly rejected inclusion of a stimulus check in reconciliation
Jack Posobiec, senior editor at Human Events, recounts information from a White House official which claim that President Biden was presented a plan for a stand-alone fourth stimulus check, but he refused to include it in the reconciliation package.
As it stands there is no direct payment included in the bill and that appears very unlikely to change. Posobiec also writes that there was a propoal for a "Phased Lift of the eviction moratorium on a regional basis but rejected it due to Wall Street pressure."
The White House and many Democrats in Congress have argued that the newly enhanced Child Tax Credit will cut child poverty in half this year. But they face a major challenge in making that happen: getting the money to low-income families.
After the first payment was made on 15 July, the People’s Policy Project released a blog highlighting that IRS was missing information on around seven million children whose families would be eligible to receive the payment. Many of these children have parents or guardians who may not be required to file a tax return, which is how the IRS collects the information needed to distribute the payments.
Watch out for Child Tax Credit scams
Over the course of the pandmeic the federal government has poured trillions of dollars into programmes designed to provide relief for those suffering from the economic fall out. Those programmes include the stimulus checks, additional unemployment benefits and, most recently, the reformed Child Tax Credit.
Unfortunately criminals are attempting to profit off this vital support and are trying to defraud individuals out of the payments. For more information on how to stay safe, make sure to check out this guidance from the IRS.
Infrastructure bill: Collins believes
Throwing in a cheeky 'concrete benefits' pun, Senator Susan Collins is feeling good about what this new stimulus bill could bring to the country.
"It's good for America!"
Avoid the tax scammers
Thousands of people have lost millions of dollars and their personal information to tax scams. Scammers use the regular mail, telephone, or email to set up individuals, businesses, payroll and tax professionals.
The IRS doesn't initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. Recognize the telltale signs of a scam at https://www.irs.gov/newsroom/tax-scams-consumer-alerts.
Manchin targets Thursday bill pass
Senator Joe Manchin says senators want to pass the bipartisan infrastructure bill this week and "move on."
"They're drafting it. The text will be done, hopefully we'll introduce it today. We'll vote on it tonight. We'll start the amendment process hopefully on Monday.
"But we want to be done by Thursday. We want to move on."
Watch and listen to him on Face the Nation.
POTUS comments on infrastructure bill
President of the United States, Joe Biden, has joined many others involved in the process by taking to social media to make a comment.
'The Bipartisan Infrastructure Deal is the most important investment in public transit in American history and the most important investment in rail since the creation of Amtrak 50 years ago.'
Bipartisan bill: a stimulating pile
NBC's Capitol Hill Correspondent, Leigh Ann Caldwell shares this image of the numerous sheets of paper that make up the bipartisan infrastructure bill that is making all the news right now.
Schumer updates on infrastructure and reconciliation
"Despite some bumps in the road...we remain firmly on track"
Listen to Senate Majority Leader Chuck Schumer as he gives an update on the progress of the bipartisan infrastructure bill and the reconciliation package.
In the first half of this year, our economy has grown at the fastest rate in nearly 40 years.
That's a good sign.
Stimulus and Child Tax Credit: VP Harris reminder
The Vice President of the United States, Kamala Harris, has just taken to Twitter to remind everyone of a few key points:
'Let's take a moment to think about last year: Voters said they want jobs. They voted. And now, more than 3 million jobs have been created since we took office.
'Voters called for relief. They voted. Our administration sent people $1,400 checks and started monthly, Child Tax Credit payments.
'Voters called for a national vaccination plan. They voted. And now, more than 164 million Americans have been vaccinated.
'Our vote is our power—and we cannot let anyone take it away.'
How does that make you feel?
On Wednesday, the Senate voted to begin debate over an infrastructure package negotiated between a group of bipartisan Senators and the White House. The announcement that the discussions had wrapped up was welcome news to many on Capitol Hill looking forward to their summer recess.
The official name of the bill is the Infrastructure Investment and Jobs Act (IIJA). A factsheet was released by the White House describing the agreement as “a once-in-a-generation investment in our infrastructure, which will be taken up in the Senate for consideration.” The comment is an important reminder that although the sides agreed, the future of the bill is not yet secured.
Advanced Child Tax Credit payments not considered income
Advanced Child Tax Credit payments are not considered income and will not affect your access to government benefits like SSI, SNAP, TANF or WIC.
The Biden administration and many Democrats on Capitol Hill have argued that the newly enhanced Child Tax Credit will cut child poverty in half this year. But, there is one major catch: low-income families have to get the money.
After the first payment was made on 15 July, the People’s Policy Project released a blog highlighting that IRS was missing information on around seven million children whose families would be eligible to receive the payment.
Many of these children have parents or guardians who may not be required to file a tax return, which is how the IRS collects the information needed to distribute the payments.
The IRS reported that another 1.5 million taxpayers will receive refunds averaging more than $1,600 as it continues to adjust unemployment compensation from previously filed income tax returns.
This is the fourth repayment after Congress changed tax laws relating to unemployment aid. Usually unemployment benefits are subject to federal tax, but President Biden's American Rescue Plan set a limit of $10,200 before any tax is paid. Any unemployment aid under this value would not be subject to any tax and those who overpaid are being retroactively refunded.
Child Tax Credits, debt and eviction
'Her day started before sunrise. Even though she had been up with the baby a few hours earlier, Brittany Baker lifted herself from the bed at 5, on a morning in June. She moved with slow, tiny steps across the carpet she was so proud to keep clean despite three youngsters running around the apartment. Two were still sleeping with her fiance, Jordan, in the bed she had just left. The other was quiet in a nearby crib.
'In the bathroom light she ignored the image bouncing back at her from the mirror — a 36-year-old Black woman wincing from pain jabbing up from her feet to her stomach. She was in the third trimester of a high-risk pregnancy but still clocking into work every day.
'Women of color like Baker have seen a disproportionate number of job losses since the coronavirus pandemic began. They also have continued to struggle during the recovery. In June 2021, 1 in 12 black women in the United States over 20 were unemployed, according to the National Women’s Law Center. That rate — 8.5 percent — was 1.7 times higher than before the pandemic. Dayton, Ohio, where Baker lives, also suffers from long-standing income inequality.'
Long Beach leads the way after raising minimum wage
Back in January, Long Beach City Council passed an initiative ordinance to increase the minimum wage to $14.00 per hour with further rises to be effective from 2022 and 2023. Nonprofits and small businesses with 25 employees or less saw a one dollar increase in the hourly rate to $13.00 and will have an extra year to increase their wages.
The minimum wage in Long Beach is the second-highest in the country behind Washington DC, which stands at $15.20 for non-tipped employees. This year, 37 cities and counties have followed Long Beach in passing temporary ordinances which require certain grocery and retail businesses to pay employees an extra $4-$5 per hour on top of their previous rate.
Earlier this week Sen. Bernie Sanders unveiled a $3.5 trillion reconciliation package to help clear the logjam in Congress over the fate of the new infrastructure bill. The proposal includes many popular measures that were left out of the infrastructure plan put together by over twenty Democratic and Republican Senators.
Sanders who has not been involved in the bipartisan negotiations voiced his concerns over the lack of progressive policies included in the package. But has he included popular programs like a fourth stimulus check in his proposal?
The case for extending the Child Tax Credit
Democratic Sen. Cory Brooker has been a vocal support of the reformed Child Tax Credit and is equally eager to see the program extended beyond its initial 12-month duration.
The American Rescue Plan only provided a single year's worth of funding but there is clearly an appetite, both in Congress and in the White House, to see that extended for at least another four years.
"Ensuring every American has a roof overhead is a value that unites the Democratic Party. That's why I led a relentless campaign to extend the CDC eviction moratorium. In an act of pure cruelty, Republicans blocked this measure — leaving children and families out on the streets. In the face of this partisan obstruction, House Democrats join President Biden in urging state and local governments to immediately disburse the $46.5 billion in emergency rental assistance approved by the Democratic Congress, so that many families can avoid eviction. Democrats believe in safe and affordable housing for all as the country recovers from the pandemic and we #BuildBackBetter. The Biden-Harris Admin and House Democrats will continue to search for solutions to protect vulnerable renters from eviction during this crisis".
IRS sends out 8.7m tax refund payments
The IRS has had a busy 18 months. Tasked with distributing all three rounds of stimulus checks as well as introducing the new Child Tax Credit programme, it is no surprise that there have been delays to some of their normal operations.
At the start of July, officials confirmed that the IRS was working through a backlog of 35 million unprocessed tax returns. This has had a knock-on effect with millions of households left waiting for their 2020 tax refund. This week another 8.7 million refunds were sent out, representing the latest major wave of payments.
Senate mulls over $1.2 trillion infrastructure bill
The Senate was in session on Saturday to finalize details in their $1.2 trillion infrastructure bill. Senate Majority Leader Charles Schumer announced that the bipartisan deal wasn't yet finalized with the minutiae of the deal and small flecks including the wording of legislative language still to be ironed out before it can be filed. Members of the Senate's bipartisan group hope to have the bill more or less by wrapped up by the end of this week.
Capitol camp-out to extend eviction moratorium
Protesters staged a camp-out on the steps of the Capitol building on Saturday night to demand an extension of the CDC eviction moratorium which expired at midnight. The end of the moratorium could seriously affect a huge number of American families who have been struggling to pay their rent during the pandemic.
More than 3.6 million adults reported that they were probably just two months away from being evicted, including 2 million households with children, according to a US Census Bureau survey.
Teaching staff have been at the forefront of the pandemic, either with dangerous in-person teaching or preparing classes to teach online. It has been a tumultuous 18 months for the profession and it isn't going to get much easier soon. The CDC, for example, now recommends that all students in grades K-12 wear masks in the classroom regardless of their vaccination status.
As a way to show appreciation for their efforts, and to help retain teachers and staff, states and school districts have been approving one-time payments, using federal funds, to provide an additional 'stimulus check'.
Infrastructure bill gains momentum in Congress
The long-anticipated infrastructure bill has suffered a number of false starts since it was first floated by President Biden but Senate Majority Leader Chuck Schumer appears at last to have some confidence in the route forward.
The new package, costing around $3.5 trillion, contains an extension to the new Child Tax Credit program but falls short of offering a fourth stimulus check. Schumer will hope to put the bill to the floor in the coming days so members can begin debating the contents.
On 15 July, the IRS started making payments as part of the reformed Child Tax Credit, which will see parents receive a monthly direct payment for the first time. An estimated 88% of American children will be covered by the expanded program, worth up to $300 per child, and it is hoped to halve childhood poverty over the next 12 months.
In a statement released to promote the new system, President Biden said the new Child Tax Credit payments would “give our nation’s hardworking families with children a little more breathing room when it comes to putting food on the table, paying the bills, and making ends meet.”
How much should you get from the Child Tax Credit?
The White House estimate that roughly 88% of American children will be entitled to support from the new Child Tax Credit, but the amount on offer will vary greatly. Children younger than six can receive up to $300 per month, while it's capped at $250 for those aged 6 - 17.
However the amount you actually receive is also based on household income and personal information. If you think you may have been underpaid in your first monthly payment from the new Child Tax Credit, use this handy online calculator.
Despite calls from progressives within the Democratic Party and from Americans across the country, President Biden has remained unwilling to push for a fourth stimulus check in recent months.
Instead the Biden administration has focused on his new infrastructure project, trying to build bipartisan support for the $3.5 trillion package. This proposal includes an extension for the new Child Tax Credit but no fourth stimulus check. With nothing forthcoming from the federal government, some states are choosing to provide their own direct payments for residents.
Pelosi won't bring up infrastructure package without the antipoverty bill
House Speaker Nancy Pelosi has made it clear that she won’t bring up the infrastructure package without the antipoverty bill - a $3.5 trillion antipoverty and healthcare package which Democrats plan to pass without GOP support.
Speaking in Washington, DC on Friday, Pelosi said, "To sustain this growth for years to come and to ensure that we can then share in its benefits, that all can share in its benefits, we need to be transformative in terms of how we go forward with infrastructure investment and reconciliation bills that truly meet families’ needs. We will Build Back Better with more jobs, cut taxes and lower costs for all".
"I need Nina Turner in Washington with me to make certain that not only do we pass a strong physical infrastructure bill, but that we pass an even more important human infrastructure bill. Nina Turner will fight, alongside of me to make sure that this $300 Child Tax Credit doesn't last for one year, but is made permanent".
AOC slams Congress inaction on eviction moratorium
Rep. Alexandria Ocasio-Cortez says there was plenty of time to find a solution to the eviction moratorium, which expired yesterday, leaving many vulnerable Americans at risk of being kicked out onto the streets.
"Everybody knew this was coming," she said. "We were sounding the alarm about this issue. The court order was not yesterday, the court order was no Monday, the court order was about a month ago. We had financial services hearing about it, there have been public statements about it - asking all of us, the White House and Congress to move on this sooner. The fact that the statement came out just yesterday is unacceptable. It is unacceptable. I want to make that very clear because the excuses that we've been hearing about it. I do not accept that.”
Stimulus check live updates: welcome
Hello and welcome to our daily live blog for Sunday 1 August, bringing you updates on a potential fourth stimulus check in the United States.
We'll also offer information on the third stimulus check, which began going out in March, as well as economic-support measures such as the new, expanded Child Tax Credit. Stay with us throughout the day for regular updates.