Less than a day after President Donald Trump returned to the White House following his hospital stay (the president continues to receive treatment for COVID-19), he unexpectedly put talks on the next economic stimulus package on hold till after the election.
“I am rejecting their request, and looking to the future of our Country. I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business,” Trump’s Twitter account tweeted on Tuesday about talks with Democratic negotiators.
The announcement follows daily talks between for Democrats and Republicans trying to reach a deal that could fund a second stimulus payment and other measures to address the coronavirus-spurred economic crisis. COVID-19 has infected over 7.5 million people and killed more than 213,000 in the US so far in 2020.
The news comes on the heels of remarks earlier in the day by Federal Reserve Chair Jerome Powell on the need for new economic help from the federal government: “Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses.”
While in the hospital on Saturday, Trump’s Twitter account posted the president’s support for a new bill, seemingly a sign of urgency in the context of his illness.
With the Nov. 3 election now 28 days out and talks stopped, these 10 key facts about stimulus payments will help you understand the current situation, including how quickly you could receive another payment with a new timeline in effect, if you might be eligible once talks resume, how to estimate the size of your total check, and how the stimulus payments are reflected on your federal income taxes. This story is regularly updated with new information.
Trump still wants a stimulus package even after stopping talks
The key takeaway from Trump’s tweet is that he still wants to pass a new bill, one he calls “major,” which will include help for “hardworking Americans.” Trump has expressed enthusiasm for delivering direct payments.
“He refuses to put money in workers’ pockets, unless his name is printed on the check,” House Speaker Nancy Pelosi said Tuesday in a statement that underscores the likelihood that another stimulus hangs in the balance, along with other funding.
Prior to Trump’s midday tweets, Federal Reserve Chair Jerome Powell talked about the need for further federal assistance. “The expansion is still far from complete,” he told attendees of the National Association for Business Economics’ virtual annual meeting. “The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods.”
The IRS’s timeline to send stimulus checks has changed
If talks don’t resume until after the Nov. 3 election, projections for receiving a stimulus check would be pushed back by two months for the first group of people out of five priority groups we identified based on the first stimulus checks. The final groups could receive their checks weeks or even months after people in the first batch.
A new stimulus bill passed the House. Here’s what it really means
The House of Representatives passed a revised stimulus bill Thursday that includes a stimulus payment, as well as $600 a week in federal unemployment benefits and aid for airlines and restaurants (compare it with the CARES Act here). But — and this is critical — this new take on the Heroes Act isn’t law.
If the talks do pick up after the election — either following Nov. 3 or after Inauguration Day on Jan. 20, 2021 — they could yield a completely new bill that both the House and Senate would then vote on.
Before talks stopped, a $1,200 per person cap seemed likely
During talks, there was bipartisan support to provide another direct payment to people who qualify (more on that below). Republican and Democratic lawmakers and Trump all said they wanted a solution that includes a second stimulus check, among other measures in the relief bill, such as enhanced unemployment benefits.
Provisions for a second check have been part of three proposals since the CARES Act passed in March, one authored by Republicans and two by Democrats.
The IRS could still send checks faster once approved
The IRS and Treasury Department sent the first round of stimulus payments to recipients within 19 days. In August, Treasury Secretary Steven Mnuchin has said he could send them much faster this time, once new legislation is signed. “I could get out 50 million payments really quickly” and start making payments a week after a bill is signed, he said.
You won’t pay taxes on relief money no matter when it comes
The IRS doesn’t consider stimulus money to be income, and a payment you get this year won’t reduce your refund in 2021 or increase the amount you owe when you file your 2020 tax return. You also won’t have to repay part of your check if you qualify for a lower amount in 2021. The IRS said if you didn’t receive everything you were owed this year, you can claim it as a credit on your 2020 federal income tax return by filing in 2021. Here’s everything to know about stimulus checks and taxes.
Eligibility rules could change to your advantage
While we think a second stimulus check would largely follow the same guidelines as the first, eligibility requirements are subject to change. It might even benefit your family, if a new stimulus bill redefines who counts as a qualifying dependent.
Other notes on eligibility:
Stimulus money likely to be delivered 3 ways
With the first stimulus check, the IRS and the Treasury Department sent payments three ways: direct deposit, physical checks and prepaid EIP cards. According to the most recent numbers from the Treasury Department (from June), this is how the nearly 160 million payments break down:
- Direct deposit: 75%, or 120 million payments
- Paper check: 22%, or 35 million payments
- Prepaid EIP debit card: 3%, or 4 million payments
It’s expected you’ll receive your money fastest with direct deposit, followed by the check and then the EIP card. Read more about priority groups here. The IRS automatically picks the payment method, but is likely to reopen its online portal that lets people register for direct deposit if new legislation passes.
We already think we know how much money you could get
If you’re still waiting for your first payment or are looking for an estimate of how much a second check could include, you can use our stimulus check calculator to get an idea for how much you, your family and your dependents may receive, especially if qualifications shift with another round of payments. Our calculator tool doesn’t retain your personal details in any way.
Payment details can get complicated
When and if a second stimulus check does get approved, the details will require some unraveling. While some situations are straightforward, other complications about you and your dependents may make it unclear if you’re eligible, the size of a check you should expect and when it’s coming. Fringe cases abound.
There’s much more to know about other government payments during the pandemic. Here’s what you need to know about a possible interest check from the IRS, the $300 federal unemployment benefit and the administration’s payroll tax cut.