It has been three months since the first of the third stimulus checks was sent by the IRS. But there have been regular batches of the Economic Impact Payments going out ever since under the American Rescue Plan. The $1,400 check for every individual earning below a certain amount has reached more than 169 million families and individuals.
2.3 million payments were made in the last batch, both as a direct deposit into banks and paper checks and debit cards, which were delivered through the US Postal Service.
That brings the total amount distributed since March 12 to $395 billion. And along with these payments, the IRS has also given out reminders that people who are yet to file their tax returns for 2020 should do so immediately to get the right amount in their stimulus check
The ‘Plus-Up’ Stimulus Checks
Many people have also received a follow-up payment or ‘plus-up payment after they have already received the third stimulus check. These extra checks are to compensate for short payments in the initial stimulus checks.
Most of the initial payments were based on the 2019 income tax returns when people had not yet filed their 2020 tax returns.
As millions of Americans reported a drop in income in 2020, a fresh calculation made it possible for many to be eligible for extra money as the stimulus checks were based on certain income criteria.
The birth of a child into the family in 2020 and the inclusion of another dependent led to an increase n the stimulus amount payable to that family. So if you want to be sure that your third stimulus check has the right amount entered in it, you need to be sure that you have included all the details that the IRS needs. And the easiest way to do that would be to file the 2020 income tax returns.
Expecting Payments Beyond The Third Stimulus Check
Though there have been all-around demands for a fourth stimulus check, there hasn’t been any development on that front. Over 80 Democratic lawmakers have expressed their support for a fourth stimulus check, and even a fifth.
This includes 6 members of the influential House Ways and Means Committee, who wrote to President Biden, urging him to go for regular stimulus payments till there are clear signs of economic recovery. The lawmakers have termed the check a ‘lifeline’ for those who have suffered crushing reverses in the wake of the prolonged shutdowns.
An online petition by a restaurant owner on change.org has garnered more than 2.4 million of the targeted 3 million signatures. this petition has requested the Biden administration to consider monthly checks of $1,000 for children and $2,000 for adults.
The letter further said that the pandemic has reminded us that people seek certainty, especially during a crisis. They need to be sure of getting food on the table, and enough to cover the necessities, and a roof over their head.
The President Is More Focused On The Infrastructure Bill
The President and the lawmakers are more concerned at present with pushing through the infrastructure bill that is needed to overhaul American roads, bridges, schools, etc. the initial proposal of $2 trillion has been pared down to $1.2 trillion to accommodate the Republicans.
Several Democratic lawmakers are not comfortable with going it alone for the second time after the American Rescue Plan was pushed through without any Republican support.
The President is also keen to see the American Families Plan gets through. He has said that it is an investment towards our children, our families, and the economic future. The plan is to help families pay for their basic requirements and continue to ensure that child poverty remains a distant nightmare.
There are proposals to add free education, provide direct support to families with children, give tax relief to families with children, and American workers. This is expected to give a boost to child education and economic performance. There are also plans to extend the expanded health insurance tax credits that are part of the Rescue Plan.
The Child Tax Credit Had Its Effect In The Long Term
The child tax credit amount has also been increased. Starting July 15, 2021, the payments will be sent every month till December 15, 2021. Between 36 and 40 million families are eligible for the payments.
The payments will go out based on the information that the IRS already has. People who have filed their latest tax returns, that is 2020, will get the correct payment as the IRS will have all the relevant information with them.
A new tool will enable parents to check their eligibility and also opt out of the monthly scheme of the child tax credit payments. Low-earning individuals and families are also eligible for the child tax credit as long they have a child in their home.
The child tax credit payments are an advance on the 2021 returns. A child below 6 will contribute $3,600 to the families’ total amount while it is $3,000 for children between 6 and 17 years.
The unemployment check of $300 per week will continue till September 6, 2021, though several states have stopped giving their share of it.
50% of the total amount will be given out as monthly payments between July and December 2021. The balance half of it will be paid as adjusted against the 2021 tax returns to be filed in 2022.
The child tax credits are fully refundable so that even families with low income are eligible. So even if you do not pay taxes, you will get the full amount in 2022.
A Sluggish Economic Recovery
The pandemic has exposed starkly to the ever-increasing disparity across the economy. Most families have been pushed below the poverty line as on-site work stalled totally in some sectors.
A TransUnion survey has revealed that 38% of people have reported a significant drop in income. While many people lost their jobs altogether, many had to have content with fewer working hours.
The food shortage crept in many households with 10%of Americans surveyed saying that there wasn’t enough food on the table. That comes to a whopping 20 million people.
Another 10.5 million people were behind in their rent payments. The federal eviction moratorium will expire soon and the unpaid rent remains as debt bearing down on millions of families.
The unemployment levels are at 5.8%, way above the 3.5% mark before the pandemic.
Cutting Down On Expenses
There are ways you can stretch the amount that you have in hand. Cutting debts is a great beginning. Most families have amassed huge debts on credit cards that charge high interest rates. Consolidating these debts into low-interest consolidation loans would be prudent with many banks offering loans at extremely low rates.
Compare insurance rates for your car and you will be saving as much as $1,000 each year at current rates. The same goes for your home insurance.
