What Can You Expect From the Second Incentive Check?
While Congress ponders the details of the next stimulus package, one part has already been confirmed – another round of stimulus reviews. According to the Wall Street Journal , Congress still needs to approve the second payment, define the details and get President Trump’s approval, which could take weeks. But once that happens, the second check may come faster because the IRS systems are already working with the first.
How much money will you get?
House Democrats passed the HEROES Act in May despite opposition from Republicans . The bill includes benefits of $ 1,200 for adults and $ 1,200 for each of the three dependents. The Hill reported yesterday that Republicans will also include a $ 1,200 direct payment in their new stimulus bill, which is due in the Senate on Monday .
Secretary of State Stephen Mnuchin told reporters yesterday that the GOP bill would include “exactly the same clause as last time.” If that happens, Republicans may not agree to an increase in dependents from $ 500 to $ 1,200.
Who will qualify
While we don’t yet know who will be eligible for the second payment, we do know that legislators on both sides will take your age, income, citizenship, marital status, and dependents into account when determining if you will receive a check and how much it will cost.
The HEROES Act was the starting point for negotiations – it mirrors the CARES Act with a one-time income cap of $ 75,000 to $ 99,000. There are also provisions for payments to those who do not participate in the first round of payments – college students, dependents 17 years of age or older, people receiving income from social security disabilities, and non-citizens filing federal tax returns.
It is difficult to predict the exact thresholds that will be included in the Republican bill. If the provisions are in line with CARES, the income limits will be the same as the Democrats’ bill. But some Republicans, including McConnell , have already called for lower restrictions.
What to do with money
Regardless of what Congress agrees to, if you are eligible for another payment, you may receive money faster than you expect. And if the pandemic hasn’t affected your income to the point that you need to immediately use it to pay bills, you will soon have to decide what to do with this latest windfall.
“If you succeed, consider saving the bulk of your incentive check to fund your emergency fund,” says Mark Reyes, financial advisor at Albert . According to him, in an unstable economy, it is better to accumulate savings than to spend money on something interesting.
Reyes advises you to consider paying off high-interest debt after you’ve saved at least three months on living expenses. But if you’re currently unemployed, he only suggests saving for basic expenses like food, rent, utilities, or medicine. And if you really don’t need money, you can always donate it .