For the past two weeks, the nation’s capital has been abuzz with anticipation over the much-anticipated $1,400 stimulus check. After months of negotiations between the Biden Administration and congressional leaders in both the House and Senate, the American Rescue Plan was signed into law on March 11, 2021. This massive, $1.9 trillion relief package provides direct relief to America’s most vulnerable citizens and will help ease the financial hardship many are facing during the ongoing COVID-19 pandemic. Included in the package is $1,400 in direct relief money for qualifying individuals who file for their most recent tax return. The much-anticipated relief checks are set to arrive in the coming weeks and millions of Americans are set to receive their $1,400 stimulus check soon.
Eligibility For Stimulus Check
In order to be eligible to receive the Stimulus check, individuals must have a Social Security Number and have earned under a certain designated income threshold in the 2020 tax year. The guidelines for the $1,400 check are as follows:
• Individuals who made up to $75,000 in 2020 are entitled to the full $1,400
• Individuals who made between $75,000 and $100,000 are eligible for reduced payments
• Individuals who made over $100,000 are not eligible
The relief money will be paid out based on the most recent tax return filed. Therefore, if an individual has not yet filed their 2020 taxes they are urged to do so immediately in order to have the best chances of receiving the relief payment quickly.
How Stimulus Payments Are Delivered
This time around, the federal government is providing relief payments in a few different ways: direct deposits, physical paper check, and a debit card. For those taxpayers who have direct deposit information on file with the IRS, the money will be deposited directly into their bank accounts with no further action necessary. Paper checks will be sent out to taxpayers who do not have direct deposit information on file. And, the government is also providing some taxpayers with a prepaid debit card known as the Economic Impact Payment Card (EIP Card).
The EIP Card is a special type of debit card that allows recipients to quickly access the relief money they are entitled to without the need to wait for the physical paper check or open a bank account. To receive an EIP Card, individuals must provide the IRS with the necessary information for direct deposit. This would include their name, address, and Social Security Number. The IRS will then send the individual an EIP Card in the mail. Once the card arrives, it can be used like any other debit card: the recipient can use it to pay bills, withdraw cash from an ATM, or make purchases in stores.
Stimulus Check App
In addition to receiving their stimulus check by direct deposit, physical paper check, or prepaid EIP Card, those who are eligible may also be able to access their funds via an app. The Internal Revenue Service (IRS) recently announced that individuals who have not yet received their stimulus check can now access their funds using the “Get My Payment” app. The app is available on both Apple and Android devices and allows users to monitor the status of their stimulus check as well as input their direct deposit information in order to receive the funds as quickly as possible.
Tax Liability and Stimulus Check
One important thing to be aware of is that any stimulus check received in 2020 will be subject to tax liability during the taxpayer’s 2021 filing. This means that citizens who receive a stimulus check in 2020 will need to report the amount they received on their 2021 tax return. The amount received will be what is referred to as “recapture” on tax forms and any taxes due need to be paid at that time.
Impact of Stimulus Check
The $1,400 stimulus check will help many Americans make ends meet during the pandemic. Unfortunately, it is not enough to cover the full economic impact of the pandemic. Research suggests that most low–income households are still struggling to make ends meet, despite the $3,400 in payments they will receive. This is due to the fact that the payments are delivered one–time instead of in installments and to the larger losses suffered from the pandemic, such as job loss and reduced wages. Still, the payment could provide much–needed relief for those struggling to pay for essentials like rent and food. It could also help Americans pay off debts accrued during the pandemic, such as medical debt or credit–card debt. These payments may also help prop up the economy, as individuals may be more likely to inject the money into small businesses or other investments.
The much-anticipated $1,400 check is set to arrive in the coming weeks and millions of Americans are set to receive their stimulus money soon. It is important to be aware of the eligibility requirements in order to ensure the best chance at receiving the payment quickly. Additionally, those who are eligible may be able to access their funds via an app, direct deposit, physical paper check, or prepaid EIP Card. Last, taxpayers need to be aware of the tax liability associated with the received payment and that any amount received needs to be reported accordingly as “recapture” on 2021 tax forms. With the arrival of the stimulus check imminent, millions of Americans can look forward to some much needed financial relief.