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The House of Representatives is set to vote on another stimulus package tomorrow that is being called the HEROES Act. One of the most anticipated and talked about elements of this package is the new round of stimulus checks it contains.
It will provide checks to families and individuals in similar ways as the CARES Act such as allowing individuals to receive $1,200 for their checks and couples up to $2,400, but there may be some huge differences between the first round of stimulus checks and the second.
Below are some of the key ways that the second round of stimulus checks might be different from the first.
Families will get more
The first round of stimulus checks offered an additional $500 for certain dependents that qualified.
But the second round of checks will raise that up to $1,200 per dependent up to a total of three different dependents. This means that a family of five could potentially receive up to $6,000 for their next stimulus check.
It’s also reported that the age requirement of being 16 years and younger will be lifted so you could receive $1,200 for your adult children or for elderly parents living with you.
These two changes could be absolutely huge for lots of families who are supporting older teenagers or even kids still in college.
I remember at one point in my life when my parents were supporting multiple teenagers as well as their parents who lived with us and something like this could have helped us out tremendously in a tough time.
Child support will not be taken out
Many people who owed more child support than they were due for the first stimulus checks, did not receive a dime from the stimulus package. But with the new round of stimulus payments as drafted, people who owe child support would not have to give up their stimulus checks.
Also, the funds coming from a second round of checks will not be taken to used for back taxes or other debts that are owed to the government which is the same rule that applied for the first round of payments.
Another major difference between the first round of stimulus checks and the second round is that the second round of stimulus checks would not be subject to garnishments by creditors or debt collectors. They would also not be lost in bankruptcy proceedings.
This would be a huge protection for many people who are worried about having to prioritize things like overdue payments or credit card payments over paying for rent or other necessities. I really hope to see this provision in the next stimulus package.
Donald Trump’s name would be removed
On the first round of stimulus checks that went out, Donald Trump’s name appeared on the paper checks. This was a controversial move as many people saw it as a political stunt aimed at earning more support for the upcoming elections. However, based on language found in the new act, the president’s name would not be allowed to appear on the checks.
Income will be determined differently
The first round of stimulus checks was based your adjusted gross income but the second round of stimulus checks may be based on your modified adjusted gross income.
For a lot of people this will not make a difference but if you receive any amounts that are excluded from taxable income like foreign earned income or income from the US territory this could affect your eligibility.
No Social Security number will be needed
In order to receive a check under the first round of stimulus checks, you were required to have a Social Security number. However, now you will only need a TIN number also known as a taxpayer identification number.
This will allow certain individuals who are not US citizens and who cannot obtain Social Security numbers to receive stimulus payments. Nonresident aliens would still not qualify for a second stimulus check.
First round payment changes?
According to Kiplinger, some of the CARES Act provisions for first round stimulus checks could be modified including the following:
- You would get the extra $500 payment for each dependent, rather than only for children below age 17;
- You could get a first-round payment without a Social Security number if you have a Taxpayer Identification Number;
- First-round payments wouldn’t be reduced or offset for past-due child support; and
- First-round payments wouldn’t be subject to garnishment.
So basically they would be changing the eligibility requirements retroactively and people could potentially receive a double stimulus check the second time around. Personally, this seems like one of the provisions that will not survive this bill but I definitely could be wrong.
It would not surprise me to see all of these things pass through the US House of Representatives and get approved on Friday. But things will be very different when this bill gets presented to the Senate and needs to be signed off by the president.
I mean, do you really see the president agreeing to not include his name in the checks?
Hopefully, small details like that can be compromised in order to get the most important part of this package sent out which is the checks themselves.
There still is a pretty good amount of uncertainty out there when it comes to whether or not people think the new checks will be approved.
I have been pretty pessimistic based on things that I have heard but I still definitely think it is possible for Republicans to agree to one more round of funding, especially since Democrats did not propose an extreme stimulus package with payments lasting for six to 12 months.
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Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. His content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.