More Money Is On The Way For Families With Children
The pandemic aid package passed in March also increased the size of the child tax credit. Those payments will be sent periodically beginning July 15.
More than 36 million families may be eligible for the payments. Most wont have to do anything to receive the money, which will be based on information provided on the 2020 or 2019 tax returns.
How Have Americans Spent Their Stimulus Checks
There have been threecount themthree wide-reaching stimulus checks from the government since the pandemic hit. And now that a good chunk of time has gone by since they dished out the first one, were starting to see how people spent that money. Our State of Personal Finance study found that of those who got a stimulus check:
- 41% used it to pay for necessities like food and bills
- 38% saved the money
- 11% spent it on things not considered necessities
- 5% invested the money
And on top of that, heres some good news: Data from the Census Bureau shows that food shortages went down by 40% and financial instability shrank by 45% after the last two stimulus checks.25 Thats a big deal. But the question here isif people are in a better spot now, will they be more likely to manage their money to make sure things stay that way?
American Finances Updates: The New Push For A Fourth Stimulus Check The 1500 Dollar Direct Payment
All the most recent benefits news and money-saving tips this Wednesday, August 10
Hello everyone and welcome in to our latest American Finances Updates live blog this Wednesday, August 10, where we’ll bring you information on the latest financial news from across the USA.
As we do every day in this space, we share the details of useful benefits schemes and we also share money-saving tips that can help you deal with the sky high gas prices and energy bills.
That includes stimulus checks, as there is a fresh push for the US government to give out a fourth stimulus check, at least to older Americans.
So, as we reach the halfway point of August, follow along with us in this live blog, with the updates following below and with the most recent entries coming nearest the top.
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Fourth Stimulus Check Update: Millions Of People Can Get New Payments Who’s Eligible
Millions of Americans could be eligible for a wide variety of stimulus check payments in the next few weeks, not only from payments through individual states but also through the federal government.
Many states have sent out stimulus checks of varying amounts in recent months in an attempt to combat inflation, using surplus funds from state budgets to send out payments to a wide variety of residents. Most recently, California began sending out Middle Class Tax Refunds of up to $1,050 to residents. The first batch of checks went out on Oct. 7, and the rest are expected to be distributed between Oct. 28 and Nov. 14.
The checks were being distributed to families in an attempt to help families who were behind on rent and utility bills, as well as other expenses that were hurting their wallets.
“We know it’s expensive right now, and California is putting money back into your pockets to help. We’re sending out refunds worth over a thousand dollars to help families pay for everything from groceries to gas,” Governor Gavin Newsom said in a statement before initial checks were dispersed.
This comes as Minnesota has also started to send out payments to frontline workers in the state. Those payments of $487.45 were confirmed by Lt. Governor Peggy Flanagan on on Oct. 3.
Those who are eligible include those with little to no income and those who are not required to pay taxes.
No Economic Recovery For Others
The pandemic has better illuminated the growing disparities across the broader economy. While many households have financially flourished during COVID, many others have fallen far behind where they were in early 2020. Much of the gap depends on whether wage earners could work remotely or had jobs that required them to be on-site.
Financial insecurity is still widespread, and the loss of a job and the loss of hours have been some of the main reasons. Ten percent of American adults reported a shortage of food in their household over the previous week, according to U.S. Census survey data from the middle of June. Approximately 16 percent of renters have fallen behind on their rent, including 20 percent of renters with children in their household. The federal eviction moratorium, set to expire on July 31, doesn’t forgive rent owed, it pushes the debt into the future. So a tidal wave of evictions may be coming soon. Millions are also struggling to pay their mortgage.
As of mid-June, over a quarter of American adults reported some difficulty keeping up with expenses in the prior week. A survey from the Federal Reserve Bank of New York determined that over 58 percent of those receiving a third stimulus check have or will use the money on consumption or paying down debt. That includes debt incurred during the pandemic. A Bloomberg/Morning Consult poll from last February listed food and housing costs as the second and third most popular uses of the then-upcoming stimulus.
Fourth Stimulus Check: Will There Be Another Relief Payment
— Stimulus checks have been a financial lifeline for families finding their way through COVID. The pandemic isn’t quite over, as the Delta variant has case numbers rising in many states. Still, life in the U.S. continues to settle into some sort of new normal. The surging economy isn’t affecting everyone the same way. Some people’s finances have improved, but other people’s haven’t. Unemployment remains above pre-pandemic levels, even as the number job openings rise. Many states have already discontinued the federal unemployment bonus. Meanwhile, the federal eviction moratorium ends in about a week, and millions of people are still short of food and behind on bills. The new Child Tax Credit, which started on July 15, is helping some. But more government assistance, in the form of a fourth stimulus check, might better serve those in need. Will Americans see it in 2021?
That question still hasn’t been answered definitively. There are some clues that signal where things are heading.
The third round of relief payments started back in March, courtesy of the American Rescue Plan . Since then, about 169 million people have received up to $1,400 each, accounting for most of the $422 billion set aside. The ARP checks closely followed the $600 payments from January, which came nine months after the $1,200 payments from the pandemic’s early days.
Should I Hold Off On Filing My 2020 Tax Return And What Happens If The Irs Uses 2019 Tax Information
It likely wont make a difference in the longer term other than to update dependent or payment data, but the IRS will only use your 2020 tax return data to determine eligibility for this round of stimulus checks if they have processed your return . If your 2020 return has not been filed and processing, they will use 2019 tax data for payment.
If your 2020 return is filed and/or processed after the IRS sends you a third stimulus check, but before July 15, 2021 the IRS would send you a second payment or require a repayment for the difference between what your payment should have been if based on your 2020 return and the payment actually sent based on your 2019 return.
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Fourth Stimulus Check: Another Payment Could Lift Millions Out Of Poverty
According to the study, the third stimulus check that was part of the American Rescue Plan will reduce the number of people in poverty by 11.4 million.
Another round of payments could lift an additional 6.6 to 7.3 million people out of poverty, depending on whether the payment was restricted to citizens or made available to everyone, the group wrote in its official report.
The number of people impacted by a potential fourth stimulus payment would also depend on the timing of an additional payment being approved.
Millions of people have already received their third stimulus check, but others are still waiting, and there are a few reasons why. The Internal Revenue Service started processing payments in March and some people got them just a few days later via direct deposit.
On March 19, payments based on both 2019 and 2020 tax returns began being issued to those with and without direct deposit information on file. The IRS said that process will continue throughout the year.
With over 18 million people still receiving unemployment, some economists say additional stimulus payments might be needed this year to boost the economy.
As the latest federal direct payment has hit most bank accounts some people are wondering if there will be a fourth stimulus check coming later this year.
Fourth Stimulus Check: Is Another Relief Payment Coming
— Multiple stimulus checks helped millions of Americans keep going during COVID. With the pandemic nearing its end and life returning to normal, the economy is rising once again. But the economic recovery has affected different people and different parts of the country in different ways. And many people’s finances haven’t improved. Unemployment remains above pre-pandemic levels, and plenty of jobs have not returned. The federal eviction moratorium now extends through the end of July. But over half of all states have cut off the federal unemployment bonus early or plan to. A fourth stimulus check would provide more government assistance. But will we see it sometime in 2021?
That question still doesn’t have a definitive answer. There are some clues, however.
The third round of relief payments started over three months ago, courtesy of the American Rescue Plan . Since then, somewhere around 169 million people have received up to $1,400 each, accounting for most of the $422 billion set aside. The ARP checks followed closely behind the $600 payments from January, which came nine months after the $1,200 payments from the pandemic’s early days.
Relief payments were intended to soften COVID’s economic impact and support the economy in the process. They seem to have worked to a large degree, leading to differing opinions on whether another stimulus check is necessary.
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You May Still Be Owed Money From The Last Payments
Finally, you could potentially get another stimulus payment if you did not receive all of the money that was owed to you from prior stimulus payments. The stimulus checks were advances on a tax credit, so you can file a tax return to claim your money.
If you didn’t file a 2020 or 2021 tax return and it turns out you should have done so to get a stimulus payment, you can still submit a return even though the deadline has passed. If you didn’t owe any money, you won’t owe late filing penalties .
Understanding these key stimulus facts should help you determine if another check is likely to come from the federal government or from your state.
Fourth Stimulus Check Possible Timeline
Right now, there is no fourth stimulus check timeline or fourth stimulus check release date. Until legislation is in motion, we can’t say how soon more relief money might arrive. We can’t say whether more relief money is coming, at all.
That said, the third stimulus check timeline happened rather quickly following Biden’s inauguration Jan. 20. It only took a few weeks for Congress to debate his American Rescue Plan. Once the president signed the bill on March 11, $1,400 checks were put in motion.
The IRS can begin sending out possible fourth stimulus checks in the same manner it sent the previous stimulus payments. Since the framework is already in place, Americans could begin receiving the fourth stimulus checks about two weeks after a relief bill allowing another round of direct payments is approved.
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Bringing Inflation Under Control Is The Goal
Over the course of 2021, many economists and policymakers at the Federal Reserve felt that the higher-than-normal inflation would be temporary. However, as the level of inflation continued to rise to new heights by the end of the year the consensus shifted, and the central bank decided to be more hawkish.
In January the Fed announced that it would begin tapering its stimulus programs which have poured vast amounts of liquidity into the US economy. It has also helped the stock market reach ever greater heights.
Additionally, the central bankers will start increasing interest rates, expected to begin in March, which have been at near zero during the pandemic. The Fed will have a difficult balancing act to pace the fiscal tightening without entrenching inflation by moving too slow or causing a recession if it moves too fast.
Although another stimulus check could help people with the rising cost of living, the fear of driving inflation even higher by injecting even more money into the economy has silenced lawmakers calls to do so.
Support For A Fourth Check Keeps Growing
More than 80 mostly Democratic members of Congress have signed letters urging President Joe Biden to approve a fourth stimulus check. Seven members of the House Ways and Means Committee a congressional panel with significant influence over government spending recently became the latest to join the cause.
In their letter to Biden, the Ways and Means members said a fourth stimulus check and a fifth would keep an additional 12 million people out of poverty.
The lawmakers don’t recommend a specific dollar amount for the new payments. But other members of the House and the Senate have called for $2,000 checks, and so does a Change.org petition now signed by 2.3 million citizens.
Though the economy is recovering, there are signs many Americans still need help. Friday’s jobs report from the government showed 9.3 million people are unemployed, far more than the 5.8 million who were out of work in February 2020, before the pandemic struck.
And, a new study from the University of California, Berkeley finds almost 6 million renters owe close to $20 billion in back rent with a national moratorium on evictions set to expire June 30.
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Why You Did Not Qualify For A Stimulus Check
Several people have commented that they have not received or not gotten the correct amount on their stimulus checks. The IRS has provided the following reasons
- Your adjusted gross income in your most recent tax filing approved by the IRS was greater than than the limits shown above, which are $99,000 $136,500 $198,000
- You CANNOT be claimed as a dependent on someone elses return. This includes as a child child, student or older dependent.
- You dont have a valid Social Security number and/or are a nonresident alien.
- You filed Form 1040-NR or Form 1040NR-EZ, Form 1040-PR or Form 1040-SS for 2019. These are quick filing forms, but you need a standard filing
Hawaii: $300 Rebate Payments
In June, Hawaiis legislature approved sending a tax rebate to every taxpayer Taxpayers earning less than $100,000 per year will receive $300, and those earning more than $100,000 per year will receive $100. Dependents are eligible for the rebate, too.
Taxpayers who filed their 2021 state income tax returns by July 31, 2022 can expect to receive their returns in September or October. For residents filing their 2021 return between Aug. 1 and Dec. 31, you can expect your payment up to 12 weeks after filing.
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Will There Be Another Stimulus Check From The Federal Government
Most people agree that getting another big stimulus check from the federal government is a long shot at this point. Still, some lawmakers keep pushing for another stimulus check to help Americans who are struggling to rebuild thanks to COVID-19 and its economic impact. And with the Delta and Omicron variants out therewould another stimulus check happen for everyone? You never know. Only time will tell, really. A lot of people didnt think wed see a third stimulus check eitherbut it happened.
With the economy and jobs both on the upswing, the need for a stimulus check is way less than its been since the start of the pandemic. Not to mention, a lot of people have been getting extra cash each month from the Child Tax Credit. Add all of that up and its easy to see that there might not be another stimulus check. But if there is one, dont worrywell let you know.
Minnesota: $750 Payments For Frontline Workers
Some frontline workers could receive a one-time payment of $750, thanks to a bill signed by Gov. Tim Walz in early May.
Eligible workers must have worked at least 120 hours in Minnesota between March 15, 2020 and June 30, 2021, and were not eligible for remote work. Workers with direct Covid-19 patient-care responsibilities must have had an annual income of less than $175,000 between Dec. 2019 and Jan. 2022 workers without direct patient-care responsibilities must have had an income of less than $85,000 annually for the same period. Applications for the payment are now closed.
Walz recently proposed using the states $7 billion budget surplus to fund a generous relief package, proposing that Minnesotans receive tax rebate checks of $1,000 per person. Doing so would require action from the state legislature.
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