Coronavirus Stimulus Checks: A Brief Evaluation

Updated: Oct 18, 2020

It’s not news that the coronavirus has taken a great toll on Americans. According to the US Bureau of Labor, in April, the US unemployment rate reached a staggering high of 14.7 percent, a direct result of the COVID-19 epidemic. Not only were millions of Americans struggling, but so was the US economy. In mid-March, the IRS announced the 2.2 trillion-dollar stimulus package (CARES act) that would send non-taxable checks to Americans to both keep the economy moving and ease financial burdens. The eligibility for this first round included single US residents with an adjusted gross income under $99,000 and married couples with a combined income less than $198,000. Single filers received a $1,200 check (less if income over $75,000), while joint filers received $2,400 (less if joint income over $150,000). Eligible families could also receive $500 for each child under 16 years old.


Table 1.1, obtained from IBM security, shows a more in-depth account of eligibility.

Because the IRS did not have data for filer’s taxable income for 2020, they relied on the year prior. For a lot of Americans, their income fluctuates so much that the 2019 report is grossly inaccurate, putting them at a disadvantage. For example, Cam Loy, 21, a college student interviewed by CNBC, did not receive a stimulus check because in 2018, she was filed as a dependent on her mother’s tax return. Loy planned on filing as an independent on her 2020 tax return and no one claimed her as a dependent. Technically, she is eligible as she meets the income requirements. Several Americans are in this situation or one similar meaning they have had little government support for nearly seven months. This reveals one of the many shortcomings of this stimulus check.

There is still a lot of confusion around the stimulus checks, and there is scheduled to be a second round released before the end of the year. In round one, thousands of people reported incorrect amounts deposited into their bank accounts but had no way to alert the IRS. It is not known exactly how the government division intends to resolve these issues.



Source

Colby, C. (2020, October 17). How a second stimulus check could bring a bigger payment, whenever it arrives. Retrieved October 17, 2020, from https://www.cnet.com/personal-finance/stimulus-check-money-could-you-get-1200-or-more-from-the-irs-you-can-estimate-that-now/



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