Since President Biden signed the $1.9 trillion “American Rescue Plan” stimulus legislation in March, the federal government has been busy. It’s distributed more than 163 million $1,400 stimulus checks — a third stimulus check wave, with payments totaling around $390 billion.
This third batch of direct payments, remember, was the new administration’s immediate, urgent response to the financial crisis attached to the coronavirus pandemic. It also included an expansion of the federal child tax credit. Bottom line, though: Politicians at the time wanted Americans hurting the most to benefit the most. Congress wrote the rules so that those in the direst financial straits got the bigger stimulus checks. Keep that thought in mind, while reading on.
Third stimulus check update
New data from the IRS breaks down how those 163 million payments have been sent out thus far, and to who. And here’s the surprising part — or, what might come as a surprise to some people. The tax agency distributed almost 128,000 of those third stimulus checks to “high-earner taxpayers.” Specifically, to taxpayers who earn more than $200,000.
In other words, to people who probably didn’t need the stimulus-related financial aid. Moreover, people at that income level were not even supposed to have received any money. So, what gives?
Erica York, an economist at the Tax Foundation, suggested to CNBC that the answer might be because data from these recipients’ 2019 tax returns made them eligible. Even if their 2020 tax return showed higher income, their stimulus check — based on 2019’s data — got mailed out first. In other words, they got a lucky break thanks to the calendar. That’s one possibility, at any rate.
Along these same lines, here’s another way that higher-earners might have qualified. A report on the first stimulus checks, from the Bureau of Labor Statistics, walked through how couples with higher incomes (and also eligible dependent children) could have qualified for checks. Again, though, this was an exception to the rule. But it also explains how wealthier Americans might have benefited from all this.
Meanwhile, the IRS continues to distribute payments from that third stimulus check wave. “The IRS continues to distribute Economic Impact Payments and the related 2020 Recovery Rebate Credit on a weekly basis,” the tax agency said in a recent news release.
The child tax credit stimulus checks also start July 15. They’ll either be for $250 or $300, per eligible child and will come once a month through December. Payment will happen each month on the 15th, except for August 13. The full amount that families are getting will be for either $3,000 or $3,600 — again, for each eligible child.
The six imminent checks will provide half of that amount, and a tax credit next year will comprise the balance…Read more>>