Many Americans are hanging on the edge or their seats to find out about the Second Stimulus Check for the Coronavirus.
“Best Money For You” Staff
President Trump finally authorized the smaller COVID-19 Relief Package on Sunday, December 27, 2020, which provides for a $600 payment. The big question still remains about whether or not a larger payment of $2000 with be approved. We will be keeping a vigilant watch on Congress and the Senate. Check back for updates.
To the relief of many in-need Americans, the $600 checks are already in the process of being administered. For example, those who have a direct deposit account already set up with the IRS, may expect to see it within the next few days.
Will a $2000 Stimulus Check be approved by the Senate?
So back to the question of if a $2,000 Stimulus Check will be approved. “To be or not to be?”, as Shakespeare asked.
Speaker of the House Nancy Pelosi and the Democrats in Congress are in favor of increasing the Second Stimulus Check for a total payout of $2,000. Unfortunately, Senate Majority Leader Mitch McConnell and Republicans in the Senate have put up roadblocks to approving the necessary second Stimulus Payment legislation. Fortunately, President-elect Joe Biden has already referred to the $600 Second Stimulus Check as only a “down payment”, and mentioned supporting a third Stimulus Payment once he is sworn into office. This seems especially likely if the total amount of the 2nd Stimulus Check is not raised to the $2k total by that time. After his inauguration on January 20, 2021, President-elect Joe Biden will also seek to facilitate the passing of a larger Stimulus Package for millions of struggling Americans – individuals and businesses alike.
Even if the $2,000 Stimulus Check is approved, there are other unknown variables. For instance, currently – under the new Coronavirus Relief Package – there is a provision for dependent children to receive a $600 payment. The rules used to calculate the Stimulus Checks could change in certain circumstances, however. To further complicate matters, there are differences between how the IRS defines a dependent child and how those same dependents are defined for Stimulus Payment purposes. Let’s explore the differences:
Who qualifies as a Dependent Child for Tax Purposes?
For tax purposes, in order to claim your child as your dependent, they must first satisfy the “qualifying child test” as defined by the IRS:
- To meet the qualifying child test, your child must be younger than you and either younger than 19 years old or be a “student” younger than 24 years old as of the end of the calendar year.
- There’s no age limit if your child is “permanently and totally disabled” or meets the qualifying relative test.
In addition to meeting the qualifying child or qualifying relative test, you can claim that person as a dependent only if these three tests are met:
- Dependent taxpayer test
- Citizen or resident test, and
- Joint return test
Who qualifies as a Dependent Child for Stimulus Payment Purposes?
Next, what is the definition of a dependent child as it relates to receiving Coronavirus Stimulus Checks? Only dependent children of the ages sixteen (16) or younger were included in the first Stimulus Payment rules. Additionally, those dependents were required to be claimed by the Taxpayer on their filed tax return. After meeting these criteria, those child dependents qualified for $500 – which was added to the Stimulus Check of the Taxpayer (household) claiming them. No payments were allotted for dependents aged 17 to 19 – or up to 24 for college students.
In this second Stimulus Bill, dependents are defined as seventeen (17) and younger. Regretfully, that excludes college students who may be older than seventeen, but still receive financial support from their parents or other relative. This is a disappointing Second Stimulus Check ‘dependent qualification’ rule, considering this latest December 2020 Stimulus Package was “supposed” to be more inclusive – including ALL eligible Americans, children and adult dependents alike.
When will the IRS start distributing the Second Stimulus Payments?
Treasury Secretary Steven Mnuchin advised that payments issued via direct deposit will begin to show up as early as the first week of January 2021. Moreover, paper checks and EIP (Economic Impact Payment) prepaid debit cards began to be mailed on Wednesday, December 30, 2020.
How will I receive my Second Stimulus Payment?
If you received your first Stimulus Payment via direct deposit; or you subsequently provided the IRS with your bank account details, upon filing your federal income taxes, then you will most likely receive your Second Stimulus Payment by Direct Deposit. For most Americans, direct deposit was the predominant method of payment for the previous Stimulus Checks.
Paper Checks or prepaid EIP debit cards
If you do not have your bank account information on file with the IRS, then you fall into the second category of people who will receive their Second Stimulus Payments in the mail – either in the form of a paper check or a pre-loaded debit card called the EIP card, which stands for Economic Impact Payment.
So whether the Second Stimulus Checks remain at only $600 for now or if the total amount is raised to $2,000 Stimulus Checks, one thing is certain…millions of Americans will be keeping a close eye on their checking accounts or mailboxes for the weeks and months to come.