The federal administration sent direct stimulus checks to individuals and families totaling $931B starting March 2020 to help people cope with the ravages of the pandemic and the accompanying economic downturn. It was a challenging task for the Treasury and the IRS to send payments to millions of Americans even as the nation went through a prolonged lockdown and other restrictions.
The authorities faced difficulty in getting a list of non-filers and getting the money across to them. As such people were not required to file their income tax returns, they were not on the list of the tax authorities.
First-timers, families with mixed immigrant status, and people facing homelessness are some of the social groups who are most likely to face difficulty in getting access to the stimulus checks on time.
The IRS and the Treasury reached out to people to educate such people about the eligibility of the payments. It was later discovered that many Americans who were eligible did not receive any of the three stimulus checks. Conversely, many citizens received payments way above their tax declaration.
The authorities made recommendations to strengthen the communication efforts and the outreach of the IRS and the Treasury in efforts to the millions in similar tax credits administered by the IRS, including the Earned Income Tax Credit.
The Complete Stimulus Check Rounds
The total federal stimulus check went out between April 2020 and ended in December 2021 as the federal administration made direct stimulus payments to individuals and families coming to a staggering $931 B to help citizens out of the financial mess created by the pandemic.
The first was the CARES Act which sanctioned a $1,200 stimulus check immediately after the country went into lockdown. The delay in going for a lockdown caused the pandemic to spread out of control and the administration was forced to declare the second round on December 31 of the same year.
A stimulus check of $600 was given under the Consolidated Appropriations Act of 2021. Most families receive the credit amount as this second round of largesse was distributed in the same year in December.
The third round signed by President Biden immediately after coming to power proved to be the most generous of the three stimulus checks. This was given under the American Rescue Plan Act, 2021. The combined three stimulus checks went to 165 M Americans.
The third stimulus check under ARPA was the Economic Impact Payment or the third stimulus check. This same act also provided billions of dollars for businesses, and direct grants to states, cities, local, and tribal bodies.
It also temporarily expanded the eligibility of the Child Tax Credit stimulus check eligibility and increased the fixed amount of $2,000 to a more generous stimulus check of between $3,000 and $3,600 depending on the child’s age.
The unemployment payments were also extended to the middle of 2021. The child tax credit stimulus check payments began immediately after the unemployment payments were stopped.
Between July and December 2021, Americans received a maximum total of $1,500 and $1,800 depending on the age of the child. The rest of the amount, which comes to an identical amount, will be paid once the families and individuals file their income tax returns for 2021.
Reports show that around 84% of children benefitted from the child tax credit stimulus check. Data from a survey conducted by the Federal Reserve and the Census Bureau revealed that the Economic Impact Payments and the advance enhanced child tax credit stimulus checks reduced financial hardship for many families.
The child tax credit payments proved especially beneficial for families with children as millions of children were able to escape poverty and received the right amount of nourishment during the difficult months of the pandemic.
These pandemic-linked payments to individuals and families far exceeded various other stimulus check schemes made in recent history in the US.
Getting Across The Stimulus Check Payment To Every Family In The US
One of the greatest challenges faced by the federal authorities was getting the payments to all citizens. While the records of regular tax filers were available, a substantial percentage of the population had too low an income that did not require them to file their income tax returns.
Such people were eligible for the payments for various reasons. First, the federal administration did away with the requirement of an earned income. So Americans with very little income or even the unemployed were eligible for the Economic Impact Payments.
The payments were also tax credits and the individual could claim the full amount even when it exceeded the amount they owed as taxes.
This issue was solved when the IRS and the Treasury used other Data sources to help eligible individuals claim the full amount and reach out to around 9 M non-filers.
Around 10 M potential individuals eligible for payments were identified by TIGTA in May 2021, but the federal authorities have not made any fresh efforts to reach out to these people.
States Use Different Criteria And Also Multiple Delivery Methods For Stimulus Check To Counter Inflation
With around a dozen states moving in to help out residents cover the cost of record inflation rates, the criteria for getting a stimulus check also have varied among states. The earning limit has varied across states.
So while Maine will be sending the $850 stimulus check to residents who have a federal adjusted gross income of less than $100,000 for individual filers, $150,000 for heads of households, and $200,000 for married couples who file their returns jointly.
On the other hand, residents of California should have a CA AGI of below $75,000 for 2020 to receive the stimulus check of $350, while couples should have an income of below $150,000 to claim a $700 stimulus check.
New Mexicans must have an income of $75,000 or less in their 2021 income tax returns to qualify for a $250 stimulus check. Married couples who file jointly must have an income below $150,000 to merit the $500 relief payment.
New Jersey is the latest state to approve state stimulus checks to combat inflation. Governor Phil Murphy has signed a $50.6B budget yesterday to include a Child Tax Credit program that will be allocated up to $500 per child under the age of 6. Families making $30,000 or less will receive the full amount.
The stimulus check amount will decrease by $10 for every increase of $1,000 in income above the $30,000 limit. The New Jersey child tax credit is fully refundable. So even if a resident does not owe any taxes he can claim the full amount through direct transfer or a paper check.