If you're like most Americans, you've probably either spent your stimulus check money or socked it away to help you feel more financially secure during these troubled times. As coronavirus cases spike and the recession deepens with more states shutting down, chances are good you're hoping lawmakers will take action soon to provide a second COVID-19 stimulus check.
The good news is, lawmakers are back in Washington after an extended Fourth of July break and are already debating the next coronavirus relief bill.
Unfortunately, there are a huge number of different stimulus proposals under consideration, so it's difficult to know what Congress will do or how much a potential second coronavirus stimulus payment will help you. To help you figure out which proposal to put your support behind and prepare for whatever's decided, here's a guide to how much money you'll get in the second stimulus check under six major proposals.
1. The HEROES Act
The Health and Economic Recovery Omnibus Emergency Solutions Act, or HEROES Act, would provide COVID-19 stimulus checks valued at up to:
- $1,200 per adult
- $1,200 per dependent up to a maximum of three dependents
The definition of a qualifying dependent is broader under the HEROES Act than the one applicable for the first check authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. All dependents now qualify for the money, while only those 16 and under counted for the CARES Act.
The income limits remain the same under the HEROES Act as the CARES Act, though, so single filers would get the full payment if they earn up to $75,000 and married joint filers would get the full amount with an income up to $150,000. After this, the check amount would be reduced at a rate of $5 per extra $100 earned.
The HEROES Act passed the House of Representatives already, so if the Senate were to pass it and President Donald Trump signs it into law, a married couple with three children could receive as much as $6,000. However, the Senate is unlikely to take up this legislation.
2. The Reopening America Act
The Reopening America by Supporting Workers and Businesses Act would provide a COVID-19 payment valued at up to $1,200 per qualifying adult who was unemployed but who returns to work before July 31, 2020.
However, far fewer people would qualify for this money, because it's designed to get people back on the job by authorizing those who go back to work to keep an extra two weeks of expanded unemployment benefits. The CARES Act offered an extra $600 in weekly unemployment income through July 31, 2020. Americans who go back to work before then would get to keep an extra two weeks of the bonus $600.
3. A payroll tax cut
A payroll tax credit is the Trump administration's preferred form of stimulus. It would provide COVID-19 stimulus funds valued at a maximum of 7.65% of pay for most workers, during the time the tax cut is in effect.
Payroll taxes are paid out of your paycheck to fund Social Security and Medicare. Employers cover half of them, and you pay the other half. Specifically, you're taxed at 6.2% for Social Security (on income up to an annual maximum called the wage base limit) and 1.45% for Medicare (with high earners paying an additional 0.9% for Medicare on income above $200,000 for single filers or $250,000 for married joint filers).
If a COVID-19 stimulus bill entirely eliminated payroll taxes, as Trump has proposed, most workers (those who don't hit the wage base limit or pay the extra Medicare tax) could see a 7.65% increase in their paychecks. Self-employed workers who cover their entire payroll taxes would still owe the employer's portion of those taxes though unless the Trump administration suspended that too -- in which case they'd save 15.3%.
President Trump has suggested eliminating these taxes through the end of the year. Unfortunately, those who aren't working wouldn't benefit from this stimulus proposal.
4. The Explore America Tax Credit
The Explore America Tax Credit is another Trump-supported proposal. It would provide coronavirus stimulus money worth up to $4,000 for each U.S. household that spends money on travel and dining in 2020.
This plan is designed to get the economy going by providing a tax credit to cover 50% of travel- and dining-related expenditure within the United States. In other words, if you pay for a hotel room, you'd get a tax credit.
Unfortunately, you'd have to wait to get your money back until you claim the tax credit when you file your 2020 tax return. And unless the credit was refundable, you'd need to owe at least $4,000 in federal taxes to take full advantage of it, since credits reduce your tax liability on a dollar-for-dollar basis.
Those who can't afford to spend on travel or dining out and wait until next year to get their money back -- or those who don't want to spend on these things -- wouldn't be helped by this proposal.
5. The American Tax Rebate and Incentive Program Act
The American Tax Rebate and Incentive Program Act goes even further than the Explore America Tax Credit, providing COVID-19 relief worth:
- Up to $4,000 per adult each year for three years for those who spend money on travel or dining
- Up to $500 per dependent child each year for three years for expenses related to dining out or travel
This Act, introduced by Sen. Martha McSally (R-Arizona), would provide tax credits worth up to $4,000 per individual or $8,000 per couple, as well as an additional $500 per dependent. The tax credits would be available to reimburse you for spending if you travel more than 50 miles from home -- and you could claim one each year in 2020, 2021, or 2022, so a couple could get as much as $24,000 in tax savings for traveling.
Just as with the Explore America Tax Credit, you'd have to wait to file your taxes to get your money back though. And the credit isn't refundable, so only people with at least $4,000 in federal tax liability (or $8,000 per couple) would get back the money. Anyone who can't afford to travel or who doesn't want to would get no stimulus funds.
6. The Emergency Money for the People Act
The Emergency Money for the People Act would authorize payments valued at $2,000 per month for Americans 16 or over, and $500 per month for up to three child dependents.
Under this Act, payments would continue for as long as 12 months. And it allows dependents 16 and over to double-dip -- they can receive their own money and their guardians get the extra $500. It also sets an income limit of $130,000 for singles and $260,000 for married couples, which is a much higher income limit than what's applied with the CARES Act.
How much stimulus money will you get?
It's not yet clear if the proposals from any of these bills will make their way into the final legislation. Lawmakers began debating potential legislation this week, so you should keep a careful watch on the negotiations and reach out to your representatives if you prefer any particular one.
And because there's a chance you may still see no stimulus check at all, you should also be working on shoring up your own finances. Since the country is officially in a recession, a hefty emergency fund is key, as is a diversified investment portfolio that isn't overly risky based on your age or your timeline for needing to tap your accounts.
If you aren't confident in the amount of rainy day money you have or you aren't sure you're happy to stick with your investment strategy in case of another market crash, working on those two financial issues should top your to-do list.