Who can expect $1,400 checks?

Not everyone who got cash last time will again

WASHINGTON – A third round of coronavirus aid checks should be coming soon, probably within days or weeks.

Millions of Americans reeling from the economic damage of the pandemic would get one-time direct payments of up to $1,400. The payments are part of President Joe Biden’s $1.9 trillion American Rescue Plan, his first major initiative since taking office in January, which is likely to get final approval in the House on Wednesday morning. Not everyone will get the checks. Just like the two previous rounds of payments – $1,200 per person distributed last spring and $600 per person in December – some people will be left out.

Here’s a closer look at who will get the checks, and who won’t.

High-wage earners

Congress made a major change that will limit who will get the checks this time.

Under the new legislation, individuals with an adjusted gross income of $80,000 or less ($160,000 for joint filers) are eligible for a one-time payment of up to $1,400, plus an additional $1,400 for each dependent child. The

payments start to phase out for individuals earning $75,000 and will cut off completely for anyone who makes more than $80,000. For couples filing jointly, the phaseout starts for those making $150,000 and cuts off at $160,000.

The Internal Revenue Service will probably use tax returns on file to calculate how much money people will get. If recipients have already filed a return for 2020, their check will be based on their income from last year. If not, their 2019 returns will probably be used to determine how much they’ll get.

The new eligibility rules mean the checks will phase out more quickly than during the two previous rounds, when the cutoff was $99,000 for individuals and $198,000 for joint filers with no children.

Congress changed the eligibility requirements in response to concerns by Republicans and some moderate Democrats who argued the payments should go to the people who need them most.

The faster phaseout will mean as many as 6.5 million Americans who got checks in the first two rounds will be left out, said Garrett Watson, senior policy analyst at the Tax Foundation, a Washington-based think tank.

Students

Another revision this time is good news for many students.

In the first two rounds of pandemic relief, students ages 17 or older didn’t qualify for a check if their parents or guardians claimed them as a dependent. Nor did their parents receive the extra money awarded for each dependent child. That applied only to children ages 16 and younger.

The result was that many high school juniors and seniors and college students didn’t get a check, and their parents didn’t get the additional money.

This time, parents with dependent children of any age will receive $1,400 per dependent as long as they meet the income eligibility requirements.

Elderly and disabled people

Most senior citizens will qualify for a check, just as they did during the first two rounds. One change will mean that some seniors who were excluded last year will be eligible this time.

Under the first two rounds of payments, seniors and disabled adults were eligible for a check as long as no one else claimed them as a dependent. If so, they didn’t qualify. For example, if a disabled adult lived at home with his or her parents and the parents claimed him or her as a dependent on their income taxes, the disabled adult didn’t get a check.

This time, seniors and disabled adults who are claimed as dependents by someone else will be eligible for a check.

Advocacy groups for the elderly pushed for Congress to make senior dependents eligible for the payments, arguing that it would provide much-needed relief to families who often face both a heavy emotional and financial cost attending to the needs of an older adult.

Expanding the definition of eligible dependents will mean that as many as 26 million more people could qualify for a check, said Kyle Pomerleau, a tax policy expert at the American Enterprise Institute.

Immigrants

Just like in the first two rounds, immigrants qualify for a check if they meet the eligibility criteria and have a valid Social Security number.

Immigrants with green cards or H-1B and H-2A work visas are eligible for a check. Nonresidents, temporary workers and immigrants in the country illegally are not.

Mixed-status families – those with different citizenship and immigration classifications – will be eligible for a check as long as one member of the household has a Social Security number. In other words, if one spouse is a U.S. citizen or a lawful permanent resident and the other spouse isn’t, the family will still qualify for a check as long as one of them has a Social Security number.

Such families were ineligible for a check during the first round of payments, which meant as many as 5.1 million U.S. citizens and documented immigrants were excluded, according to the Migration Policy Institute.

Congress allowed mixed-status families to receive a check during the second round late last year and made the policy retroactive so families could claim payments missed during the first round.

People who don’t file taxes

Low-income people who haven’t filed taxes in the past two years are eligible for a check, but millions of them won’t get one unless they take an extra step.

Social Security recipients will automatically get a relief check if the IRS follows the same procedure as the first two rounds. If so, the government will use Social Security data to determine how much they receive and where it will be sent.

For others who haven’t filed taxes in the past two years, it’s a different story.

Individuals aren’t required to file taxes if they make less than $12,000 a year. The tax preparation company TurboTax estimates that 10 million Americans fall into that category, and they include some low-income individuals, Supplemental Security Income recipients and Veterans Affairs beneficiaries.

Those individuals are eligible for a relief check, but without their income tax returns, it’s harder for the IRS to verify their income, calculate their payout and know where to send it.

Last year, the IRS set up a web portal that will allow them to register for a payment. The federal government hasn’t indicated how it will identify them this time or calculate their payments. Garrett said the IRS is expected to rely on the online portal for the third round as well.

How soon will the checks arrive?

Hard to say. The Treasury Department hasn’t indicated when it will start distributing the money.

Garrett said the timeline will probably be similar to the second round of payments approved in December. Americans who got their checks via direct deposit started to receive the payments about two weeks after the legislation was signed into law. Those who got a paper check had to wait longer.

Biden said last week that many Americans should receive their payments before the end of the month.

The IRS said in mid-February it had distributed all checks to everyone who was eligible in the first two rounds.

More than 160 million payments totaling $270 billion were distributed during the first round last spring, the agency said. More than 147 million payments totaling more than $142 billion were delivered during the second round late last year.

President Joe Biden said many Americans should receive their $1,400 payments before the end of the month if his COVID-19 relief package passes.