Congress is in eleventh hour talks to give the green light to a second round of stimulus checks for U.S. households. If they do, cash payments could reach many Americans in a matter of weeks.
Yes, hopes for further pandemic aid have already been dashed, but this time it looks really different. Lawmakers are trying to tie the stimulus package to a federal spending bill that must be passed by midnight Sunday, in order to avoid a government shutdown.
If Capitol Hill executives can strike a deal to pass the new Pandemic Assistance Bill, direct payments of up to $ 600 per individual could begin this month.
“For most Americans, these payments will be made very quickly and within a time frame similar to that of the first round of stimulus checks,” said Chantel Boyens, former head of the Bureau of Management and Budget.
But just like the first round of cash payments, the distribution time may be faster for some Americans.
The first standing
The first in line will likely be people who already have their direct payment information registered with the IRS.
Within two weeks of the CARES Act coming into effect in March, more than 81 million payments were made, totaling over $ 147 billion, all through wire transfers to bank accounts beneficiaries, according to the Government Accountability Office.
“I was surprised last spring at how quickly the Treasury Department was able to roll out economic impact payments,” said Janet Holtzblatt, senior researcher at the Urban-Brookings Tax Policy Center.
Treasury Secretary Steven Mnuchin has already pledged an equally aggressive schedule, saying he could start processing checks as soon as the legislation passes.
“I can make 50 million payments very quickly. A lot of it on people’s direct accounts,” Mnuchin said in August.
This includes those who signed up to receive a direct deposit refund when filing their 2018 and / or 2019 taxes, and it can also extend to the 14 million people who previously registered their details through two new online tools. that the IRS built this spring to collect bank and contact details.
The Treasury did not immediately respond to CNBC’s request for comment on whether previously captured banking information would be reused, in the event of a second round of stimulus checks.
“It could speed up the process considerably,” Boyens said. “But I don’t know if the Treasury will determine if this information is reliable enough to do so.”
Social security beneficiaries
If the compensation conditions remain the same as under the CARES Act, many people who receive Social Security or Supplementary Security Income (SSI) benefits will be entitled to full refunds.
But how quickly this money is received largely depends on whether the beneficiary is already using direct deposit to pay for their monthly benefits. If they do, the stimulus money will likely automatically be credited to their account.
If Social Security benefits are sent by mail, however, a longer wait is to be expected.
Checks and paper cards
For those who are eligible for a stimulus payment but haven’t shared their bank details with the IRS, they can expect to receive a paper check or prepaid debit card instead.
The Treasury has the capacity to deliver five to seven million paper checks per week, in addition to checks for other federal programs.
During the first round of stimulus distribution, paper checks were sent in waves, starting in mid-April. The IRS and the Treasury have prioritized sending checks to people with the lowest incomes in the country, starting with people earning less than $ 20,000 a year.
Debit cards came later. They were posted from mid-May.
Closing the access gap
Even as a second stimulus payment nears approval, the IRS is still trying to reach people who were eligible for the first $ 1,200 stimulus check. Millions of people may still not have received their money.
“It’s a big hole,” Boyens said.
A study released in July by the Urban Institute showed that wealthy and white households received relief payments faster than black and Hispanic families, as well as low-income households.
IRS Commissioner Charles Rettig said during testimony before a House subcommittee in October that the agency has remained particularly focused on making payments to homeless people, who normally don’t no obligation to report income or otherwise live their lives outside the normal lines. Communication.
“We worked with our partners to distribute EIP [Economic Impact Payment] awareness-raising material in 35 languages within these communities, ”Rettig continued. “We have enlisted the help of hundreds of local community groups and religious organizations.
Holtzblatt says closing this access gap is critical.
“With a second round of payments, the IRS has more information on non-filers who have overcome these hurdles and should be able to send them payments faster,” Holtzblatt said. “But reaching the remaining non-filers and ensuring they receive both rounds of payments remains a challenge.”
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