Second Stimulus?

The first round of stimulus-check checks began to be issued by the Internal Revenue Services (IRS) in April to support millions of Americans through the epidemic More than 80 million Americans earned their stimulus-check payment of $1,200 from the Internal Revenue Services (IRS) to aid them financially during the coronavirus pandemic. This comes after the government accepted a $2 trillion stimulus program to combat the global downturns of the recession.

The IRS began sending $1,200 in checks as early as mid-April and now, when we reach May, not everyone who is registered has received their check, and not everyone who has received the check knows what it’s about. And note, it’s a really tight deadline.

You may have learned the reward was considered a ‘recovery refund’ instead of a stimulus check. That’s because it’s legally a tax deduction that is set to appear on your return for the tax year 2020-21.

What’s the tax credit?

A tax credit is a financial allowance that helps certain taxpayers to deduct the amount of credit they have received from the actual amount they owe to the state. This can also be a deduction given in appreciation of taxes already paid or a form of State assistance.

Three “second relief” measures were proposed on Capitol Hill in the weeks after the passage of the CARES Act.

The Emergency Money for People Act seeks to include a $2,000 monthly spending fund for single taxpayers and $4,000 for married couples for up to one year. Introduced by Rep. Ro Khanna (D-Calif.) and Rep. Tim Ryan (D-Ohio), this legislation will require all people 16 years of age and up to full payment, with the exception of making less than $130,000 a year or $260,000 as married couples filing jointly. Similar to the CARES Act, qualifying families may receive an additional $500 per child, but with a limit of up to three children.

The Bringing America Back to Work Act, introduced by Sen. Josh Hawley (R-Mo.), will allow for a refundable payroll tax credit that would cover up to 80 per cent of the employer’s payroll expenses, available up to the median income. The purpose of this proposal is not necessarily to put a stimulus check in the pockets of Americans, so much as to allow companies to retain their employees and to restart quickly once we’re out of the COVID-19 pandemic.

There is also the Rent and Mortgage Cancellation Act, introduced by Rep. Ilhan Omar (D-Minn.). As the name of the bill implies, rent or mortgage payments would be canceled for a person’s primary residence for a period of one year, with no negative marks on your credit history. The Housing and Urban Development Department will set up a fund to compensate landlords and mortgage holders to cover the debts of tenants and borrowers who do not pay their rent or mortgage.

What remains to be seen, though, is how these latest ideas align with the legislators. Senate Majority Leader Mitch McConnell (R-Ky.) is of the view that he would like to pause on stimulus measures to see if these various efforts are improving the US economy. It would be very difficult to get something done in the Senate without McConnell on board.

However, President Trump has at least intimated that he is open to the possibility of a second round of stimulus. That alone might be enough to get McConnell and the Senate on board if the job market and U.S. economic indicators continue to worsen.

In short, while a second stimulus test is not a guarantee, there is an increased probability that one will be at work. We can only assume that if a second round of stimulus is passed, it will find its way to those in need a lot quicker than the CARES Act does.