CARES Act Stimulus Checks: Who Gets them?

The US sanctioned series of financial assistance to its eligible residents in view of the persisting economic impact of the pandemic, and under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, enters its third round of reimbursement.

After two successful rounds of financial aid already extended to its citizens, the third phase of the Economic Impact Payment, duly authorized by the $1.9 trillion American Rescue Plan Act of 2021, initiated on March 12, 2021.

According to President Biden, the time frame of distribution and receiving of the checks was estimated towards the end of the month.

Eligibility & Financial Allocation Phase 3

With the first two installments of the economic package already received, an individual pretty much stands a healthy chance of being amongst those who will get the stimulus checks as an automatic payment recipient in the third phase too. Hence, in such cases, no further action is required by the nationals themselves.

However, this assumption may be subject to contrary results in view of the revised/ new income limitations that may under the revised criteria, render a person already having availed the financial aid twice, as ineligible.

Nevertheless, talking on concrete grounds of facts, who are the eligible citizens who will get the stimulus checks from the current relief package? The eligibility and financial entitlements run as follows:

General conditions for entitlement of full payment in the third phase

Normally, anyone is entitled to the full third Economic Impact Payment if:

• The individual is a U.S national or a U.S resident alien whose partner (spouse) has filed a tax return.
• The individual does not tax reliant on another taxpayer.
• Their Adjusted Gross Income does not exceed the enlisted remuneration bracket against the marked category:

$150,000   Married & filed for a joint return (qualifying as widow/widower

$112,500   if filing as head of a family

$75,000     other tax filing status

Individuals possessing a valid Social Security Number

• $ 1,400 allocation for a single filer.
• $ 2,800 allocation for married couples filing a joint return with both holding a valid Social security number.
• $2,800 allocation if one out of the couples holds a valid Social Security Number and the other during any time of the taxable year remains to be an active member of the US Armed Forces.
• $1,400 for each individual qualifying dependent with an Adoption Taxpayer Identification Number allotted by the Internal Revenue Service (IRS).
• Immigrants with a valid Social Security Number or with green cards / H- 1B / H-2 A visas.

Other Terms and Conditions:

• The individual must have filed a 2020 tax return
• In case the 2020 tax return has not been filed or processed, the individual should have filed a 2019 tax return.
• Federal benefits recipients, who as per policy are exempted or not required to file tax returns. The details of people who will get the stimulus checks under this category in phase 3 are being sought by the federal agencies, after which the date for disbursement of their checks shall be determined.

Eligibility Amendments Phase 3

It is pertinent to highlight that the third stage of the Economic Impact Payment comparatively differs from the earlier ones on account of multiple factors that have led to a great deal of shifting in the numerical figures of eligibility and payments.

Alteration in the income phase-out amounts- As a deliberate measure by the Congress to limit the issuance of checks with respect to high wage earners, payment will start to reduce if the adjusted gross income of a single filer is more than $75,000, and of a married couple (jointly applied) is above $150,000. The condensed reimbursement ends at $80,000 for a single filer and $160,000 for a married couple (jointly applied). People above these criteria will not be eligible for any payment.

Broadened criteria for the dependents – The age restriction factor of 17 years does not apply in the third phase of payments in the case of the dependent category.

Eligible applicants will receive payment based on the qualifying dependent entrants in their returns file, irrespective of age, comprising a broader scope of people such as older relatives, handicapped adults, parents, grandparents, and students. Thus, parents will receive an amount of $1,400 per child even if he/ she is high school-going or older, but dependent.

The earlier 2 phases excluded the senior and disabled adults who were only eligible for a stimulus check as long as they were not claimed as a dependent person. Hence, many who were not entitled before shall be eligible to receive payment this time around.

According to Kyle Pomerleau, policy expert, American Enterprise Institute, this go-ahead may qualify as many as 26 million more people as eligible.

Low-Income non- tax Filers- Not a part of the eligibility criteria earlier on, low-income earners possessing a valid  Social Security number and those who have not filed tax returns in the past two years have been included in the eligibility stream of those who will get the stimulus checks in the current phase of civilian financial assistance. Individuals earning less than $12,000 per annum are not liable to file taxes.

This, however, stands as a challenge for the IRS to determine the annual income of the under-reviewed nationals without their income tax return records.

Mixed Family status – Families possessing immigration classification and diverse citizenship earlier stood ineligible but will be entitled this time round as long as one member of the family holds a valid Social Security Number.

As per the Migration Policy Institute, this means that 5.1 million US citizens and legal immigrants were excluded earlier on and that this inclusion is bound to add significantly to the statistics of payouts.

All above-stated criteria have intentionally been altered by Congress in response to the raised concerns of the Republicans and a handful of Democrats who asserted that the most deserving should be granted the payouts on priority.

Understanding the payment tool response

The third round of payments is strictly in line with the processed status of the latest filed tax returns of either 2019 0r 2020.

As a response to the FAQs regarding those who will get the stimulus checks, the IRS asserts that people need to understand the various responses they may receive using the IRS ‘Get MY Payment’ tool giving clarification/interpretation of the possible responses.

For those who qualify to get the stimulus checks the ‘payment status’ option will be available. On the other hand, receiving the message of ‘payment status not available’ may either indicate the ineligibility to entitlement or that the case is still under process.

In some cases, the received message may state that ‘more information’ required which may be indicative of the returned payment to IRS on account of delayed/ other reason by the post office.

You may also be amongst those who do not get the stimulus checks because of a changed address not duly updated in the official records while applying for the 2020 tax return. However, this matter can be resolved and the authorized payment will be re-issued when records are updated.

The first two rounds of relief checks were completed by mid-February 2021 with more than 160 million payments distributed in the first round last spring, and 147 million payments during the second round that ended in mid-February.

As per the IRS released statement, the Economic Impact Payment (phase 3) will continue to be disbursed throughout the year amongst the eligible citizens in line with the progressive outcomes of processed tax return cases.