Everything We Know So Far About the Possible Third Stimulus Checks
At the end of December 2020, a second wave of stimulus checks for $600 were sent out to Americans earning less than $75,000 ($150,000 for married couples). President Joe Biden has remained committed to issuing a third round of stimulus checks aimed to help those with the greatest financial need, nicknamed the “American Rescue Plan.”
As expected, the bill containing the proposed third wave of stimulus payments has experienced quite a few ups and downs, leaving many Americans with questions. How much will the third wave of stimulus checks be? Who’s eligible this time? And when can you expect to see this money?
I’ll run you through everything we know about the third stimulus package right now.
- What’s in President Biden’s American Rescue Plan?
- How much will the third stimulus package be?
- Who is eligible for the third stimulus check?
- When will the third stimulus check be released?
- What is a targeted stimulus check? Will this impact me?
- Wait, I thought we were receiving $2,000 stimulus checks?
- How soon will the checks be issued once this bill is passed?
- What is a budget reconciliation and how is it impacting the stimulus bill?
- What’s the likelihood the third stimulus check will be approved?
- The bottom line
What’s in President Biden’s American Rescue Plan?
The third wave of stimulus packages are a significant part of what President Biden is calling “The American Rescue Plan,” a $1.9 trillion proposal designed to address the country’s most pressing financial needs.
This plan offers a substantial amount of funding objectives, including a third stimulus package. Here are some of the other highlights of this proposal:
- Launching a national COVID-19 vaccination plan to ramp up public vaccinations and increase testing rates. This would allow schools to reopen safely, upon vaccination completions, and would also include ensuring schools have the proper supplies needed to reduce the spread of this virus.
- Funding and creating 100,000 new public health jobs to help support the President’s vaccine response program.
- Providing financial assistance to public health programs in communities hardest hit by COVID-19. This funding would be a start in addressing health disparities for underserved populations.
- Offer protection and resources to long-term care facility workers, who are primarily Black and Latina women. The plan would also address racial disparities in prisons impacted by COVID-19 by providing funding for mitigation options.
- Sending personal protective equipment (PPE) and additional supplies to protect front-line workers and other essential employees.
- Furthering COVID-19 research to identify new strains and mutations, while also investing in vaccines, treatments, and additional therapies for those who are or have been infected with this virus.
- Providing paid leave for Americans to reduce the spread of the coronavirus.
- Extending unemployment benefits to help those hit the hardest by the pandemic.
- Extending foreclosure and eviction moratoriums, while also providing relief to renters and small landlords. Part of this initiative would also provide funding to secure safe housing for the homeless and those at risk of becoming homeless.
- Providing food relief to the 1 in 7 households unable to secure food.
- Increasing the minimum wage to $15 per hour.
- Addressing the childcare crisis in the country by helping childcare centers to open safely, while making this expense more affordable for low-income families.
- Expanding access to health care, including behavioral health and mental health programs. This would also include funding for veterans’ health expenses.
- Directing funds to Tribal governments to support healthcare, PPE, and other pandemic-related expenses for American Indian and Alaska Natives.
- Providing funding for domestic violence programs.
- Offering additional funding, such as Paycheck Protection Programs (PPP), for small businesses
This relief plan also addresses a third wave of stimulus checks. Currently, the proposed bill plans to send $1,400 checks to American making $75,000 or less and $2,800 checks to married couples making $150,000 or less. Individuals and couples over these thresholds could receive smaller checks, contingent with their income levels.
After several rounds of back and forth between Democrats and Republicans, some of the terms of this proposed plan are expected to change and as of February 5, the senate endorsed the plan pushing forward to a $1,400 third stimulus check (although rejecting the minimum wage hike). While the plan is still not definitive yet, here’s what we know so far.
How much will the third stimulus package be?
President Biden’s plan has individuals making under $75,000 receiving $1,400 (and married couples making under $150,000 receiving $2,800), but 10 Republican senators have rolled out their own plan. Under the GOP stimulus plan, Americans earning $40,000 a year or less would receive $1,000, and Americans earning between $40,000 and $50,000 would receive a smaller check.
The White House noted that this Republican plan would prevent 15-million lower-income essential workers from receiving stimulus relief packages. President Biden might be willing to compromise on the targeting of who would receive aid, but is committed to the $1,400 amount and has noted that the Republican plan is too small to pass.
Under this second stimulus plan, families with dependents would also be eligible to receive an additional $1,400 per child.
As of 9 p.m. EST on February 3rd, Democrats have moved towards a compromised plan where individuals earning $50,000 or less would receive a $1,400 paycheck. Married couples earning $100,000 or less would receive $2,800.
This amount could change as the proposed plan is finalized, but it seems likely that the amount will fall between $1,000 and $1,400.
Who is eligible for the third stimulus check?
The objective of this stimulus check is to help low-income individuals and families who have been the hardest hit by the pandemic. Currently, there are talks of individuals earning $75,000 or less receiving the full stimulus check, but this income qualification may be reduced to $50,000. Married couples earning $150,000 or less were originally proposed to receive the full amount, but recent discussions might lower this number to $100,000.
Income qualifications are expected to be based on taxpayers’ 2019 AGI (adjusted gross income), but might be based on 2020 data, depending on when the bill is passed.
One key change President Biden proposed in his plan is to extend the additional stimulus benefits parents previously received for dependents under the age of 17, to include all dependents. This would include students in college, adults with disabilities, and older relatives, offering more relief to families who might need it.
Another change includes offering eligibility to mixed-status households. The first stimulus package provided relief for U.S. citizens only, while the second expanded relief to couples with one U.S. spouse. The third would target families where at least one member of the household is a U.S. citizen (for example, non citizen parents might have a child who was born in the U.S.).
Individuals and families earning above the determined thresholds will likely receive a smaller payment, capping off at a specific income bracket. We don’t know what this income threshold will be yet, though the second round of stimulus checks phased out at $87,000 for individuals and $174,000 for married couples.
When will the third stimulus check be released?
The timing of the third stimulus check is still unknown, though the White House has noted that they hope to get checks out as early as March. The proposal still requires further review and discussions before it is presented to the House of Representatives. Right now, the proposal is expected to soar through the House, but will likely experience challenges when it hits the Senate.
The House passed a budget reconciliation on February 3rd, which is a major step towards calling a vote for the proposed relief bill. Tomorrow, the Senate will vote on the reconciliation. If approved, this process could speed up the passage of the American Rescue Plan.
Democrats are aiming to pass this legislation as early as possible in March, before the expanded unemployment benefits millions of Americans are collecting are set to expire. If the proposal passes in the House and Senate, it seems likely that stimulus checks will begin being issued sometime in March.
What is a targeted stimulus check? Will this impact me?
Currently the way the stimulus check calculations are handled, many high income earners (those above $75,000 for this round) could end up receiving stimulus aid. To prevent this, some lawmakers have raised talk of a more targeted approach.
What this approach looks like is unclear. This could mean a clear cutoff after a certain income level. Right now, this might mean anyone who earns over $75,000 ($150,000 for married couples) would not receive any stimulus money. Or, a change in how those earning over this threshold receive money (and how much) might be proposed.
Basically, this plan is being made to ensure that everyone under the proposed $75,000 income threshold is able to receive the full benefits promised.
Wait, I thought we were receiving $2,000 stimulus checks?
This third stimulus package has been discussed as building upon the second wave of stimulus relief. Under the second wave, individuals received a maximum of $600. The Senate declined to vote to increase this maximum benefit to $2,000, because the expanded bill was not expected to pass in the House or the Senate. This left the benefit at $600.
Under the third wave of stimulus checks , the maximum currently being proposed is $1,400. When you’re seeing headlines indicating a stimulus of $2,000, they’re simply combining the second and third stimulus check amounts.
How soon will the checks be issued once this bill is passed?
Right now, we don’t know how the Internal Revenue Service (IRS) will handle issuing the third wave of stimulus checks. The second stimulus checks were sent out quickly as direct payments due to a 17-day deadline. While many Americans received their checks within days via direct deposit, there are still many who have not received this stimulus check and will need to claim this benefit when filing their 2020 tax returns.
It’s expected that the third stimulus check will also be sent out quickly and automatically, so as not to delay getting Americans the aid they need. However, there’s no definitive timeline for rolling out the third wave of stimulus checks right now.
What is a budget reconciliation and how is it impacting the stimulus bill?
A budget reconciliation is a measure that can be taken to speed up the legislative process. Essentially, the proposal will be reviewed and approved by the House and Senate budget committees before then moving to a full vote in Congress.
Why is this helpful? Currently, to pass a bill in the Senate, legislation would need 60 votes. However, when passing a budget reconciliation, only a majority vote is needed. Budget reconciliations can only be used once a year for set budget categories.
While the bill is expected to pass quickly through the House, it’s the split Senate that might delay the passing of this bill. Since the Senate is evenly divided, it’s possible the vote is tied, in which case the presiding officer of the senate — Vice President Kamala Harris — would cast the tie-breaking vote.
Unfortunately, not everything in President Biden’s proposal qualifies for the budget reconciliation process. This leaves a few highly debated items, such as the $15 minimum wage and funding the reopening of schools, outside of this process.
For Democrats, the key upside to the budget reconciliation tool is being able to push the stimulus bill through faster, without significant buy-in from Republicans.
What’s the likelihood the third stimulus check will be approved?
It’s very likely that a third round of stimulus checks will be approved, but it’s not yet guaranteed. While Democrats and Republicans are supporting very different COVID-19 relief packages, by utilizing the budget reconciliation process, Democrats have a strong advantage over Republicans.
The bottom line
The third round of stimulus checks are expected to pass sometime in March of this year. While the bill isn’t guaranteed, the chances are high. Right now, it looks like Americans making under $75,000 can expect $1,400 in stimulus relief, with additional benefits for those with dependents, regardless of age. This stimulus check is also expected to be extended to non-citizens with at least one U.S. child.
The new stimulus bill may not provide payments for those making over $75,000 or might tweak the formula to ensure lower-income earners receive the full benefits over higher-income earners. There is a chance that this income maximum lowers to $50,000, though details have not yet been released.
Democrats are pushing for a vote within the next few weeks, so stayed tuned for any changes or stimulus check updates.