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What the $2 trillion stimulus will mean to you

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The Trump administration and Senators hashed out a $2 trillion stimulus deal that would cut $1,200 checks to many adults, expand unemployment insurance payments and extend loans to businesses, all in an effort to combat the coronavirus outbreak’s toll on the economy.

The White House and Senators reached a deal early Wednesday morning and a Senate vote could come later in the day, according to Senate Majority Leader Mitch McConnell. The bill was still awaiting a vote as of Wednesday evening, but a dispute over jobless aid has delayed the bill. Speaker of the House Nancy Pelosi has also pledged to quickly pass the measure in the House.

“For the vast majority of Americans, no action on their part will be required in order to receive a rebate check,” according to the bill analysis from Grassley’s office.

Barring last minute changes, here some specifics on the checks, dubbed “recovery rebates” in the bill. Taxpayers making $75,000 and below will receive a $1,200 check, while married couples making $150,000 and below will receive $2,400. Individuals and couples under this earnings cap would also receive $500 per child.

The money does not count as taxable income. A Republican Finance Committee aide said also said people filing as “head of household” on their taxes – meaning they are unmarried, have children or dependents and pay more than half of their household expenses — will get the $1,200 check if making $112,500 and below.

The earnings threshold is measured by adjusted gross income. That is, gross income, minus deductions. (The adjusted gross income number is on Box 7 in a person’s 1040 form.)

Those receiving Social Security benefits will be eligible. That’s according to an analysis of the bill from Sen. Charles Grassley, a Republican from Iowa. Green card holders, in addition to citizens, qualify for the check, the Republican Finance Committee aide noted.

The checks phase out for incomes above $75,000 a year. That is capped for individuals making above $99,000 a year. For married couples, income of $198,000 a year is the cap and, for people filing as the head of household, it’s $146,500 a year, according to the analysis from Grassley’s office.

The IRS will use the bank-account information from the taxpayer’s 2018 or 2019 return and the IRS will transmit the payment via a direct deposit. Tax season for the 2019 return is open until July 15. The Treasury Department pushed back both the income tax payment and filing deadlines from April 15 to July 15 to free up cash individuals and businesses might need now.

Sen. Charles Schumer of New York has said he would like the money to start rolling out by April 6. The money could go out “within a matter of weeks,” though it could take even longer to get paper checks out for taxpayers who didn’t submit their taxes electronically, the Republican aide added. The IRS is looking into the possibility of issuing pre-loaded debit cards, the aide noted.