taxes

Second Stimulus Check Update: Republican Plan to Include Next-Round Payments for Dependents

If the HEALS Act is passed, some people would get a second-round stimulus check that is larger than the first check they received under the CARES Act.

The Health, Economic Assistance, Liability Protection, and Schools (HEALS) Act, which was rolled out by Senate Republicans on Monday, includes another round of $1,200 stimulus checks. For most people, the amount of your second-round payment, as envisioned by the GOP Senators, would be almost identical to the first-round payments you received under the CARES Act. However, if you have dependents older than 16 years of age, your second-round stimulus check would be higher under the Republican plan than what you received under the CARES Act.

Extra $500 for Dependents of All Ages

Under the CARES Act, every qualified American received a $1,200 payment. However, an extra $500 was sent to families with children who qualify for the child tax credit (basically, kids 16 years old or younger). Older dependents, such as high school seniors and college students age 23 or younger, didn't qualify for the additional amount. Neither did senior citizens living with their adult children.

According to Sen. Chuck Grassley (R-Iowa), the HEALS Act would extend the additional $500 payment to families with dependents "regardless of age." So, for example, a married couple with one child in middle school and a 21-year-old child in college would get a stimulus check of up to $3,400 if the HEALS Act is enacted. Under the CARES Act, that same family only received no more than $2,900.

Payments would still be phased-out under the HEALS Act for people with higher incomes. Payments would be gradually reduced to zero for single people, married people filing a separate tax return, and qualifying widow(er)s with an adjusted gross income (AGI) above $75,000. For married couples who file a joint tax return, stimulus checks would be reduced if their AGI exceeds $150,000. People who claim the head-of-household filing status on their tax return would start seeing a reduction if their AGI exceeds $112,500.

HEROES Act Would Provide Even More Money

The HEALS Act is not a done deal…far from it. Republicans and Democrats in Congress have to agree on a single economic stimulus package, and at this point the two sides seem far apart. While the Republicans are pushing the HEALS Act, Democrats favor the HEROES Act, which was passed by the House of Representatives in May.

With regard to stimulus checks, payments would be higher for many people under the HEROES Act than under the HEALS Act (even considering the extended payments for dependents). Both plans call for a $1,200 payment to each eligible person ($2,400 for joint filer). But families would get an additional $1,200 for each dependent (for up to a maximum of $3,600) under the HEROES Act. So, for example, a married couple with three kids could get up to $6,000. (For more information on stimulus checks under the HEROES Act, see How a Second Stimulus Check Could Differ from Your First One.)

Most Popular

Is the Stock Market a House of Cards?
investing

Is the Stock Market a House of Cards?

The stock market volatility we’ve been experiencing and the apparent disconnect with the broader economy have some investors wondering just that. But …
October 12, 2020
Stock Market Holidays in 2020
Markets

Stock Market Holidays in 2020

Is the stock market open today? Take a look at which days the NYSE, Nasdaq and bond markets take off in 2020.
October 12, 2020
10 Worst Things to Keep in Your Wallet
Scams

10 Worst Things to Keep in Your Wallet

Storing your passport book or card, a spare key, or any of these other important items in your wallet leaves you open to identity theft -- or worse.
October 9, 2020

Recommended

Social Security Recipients, Veterans Must Act Soon to Get Extra $500 Stimulus Check
Coronavirus and Your Money

Social Security Recipients, Veterans Must Act Soon to Get Extra $500 Stimulus Check

The deadline for seniors and veterans to request an additional $500 stimulus check for a dependent child is coming up quickly. See how you can claim y…
October 27, 2020
Stimulus Check Deadline Extended
Coronavirus and Your Money

Stimulus Check Deadline Extended

The IRS is giving people who didn't file a 2018 or 2019 tax return more time to claim a stimulus check.
October 27, 2020
What's the Standard Deduction for 2020 vs. 2021?
Tax Breaks

What's the Standard Deduction for 2020 vs. 2021?

Most Americans claim the standard deduction on their tax return instead of itemized deductions.
October 27, 2020
Estate Tax Exemption Amount Goes Up for 2021
taxes

Estate Tax Exemption Amount Goes Up for 2021

As the estate tax exemption amount increases, fewer estates are subject to the federal tax.
October 27, 2020