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Will More Stimulus Arrive Soon?
Greg Lavelle • October 23, 2020
For months, we’ve all waited anxiously to hear whether a second stimulus package will be passed by Congress. Not only is a stimulus payment beneficial to those missing income at this time; the payments can help to boost the economy overall. Yet, for the past several months Republicans and Democrats have remained quite far apart in their negotiations, preventing a stimulus bill from making it through both the House and Senate.
Why can’t Congress pass a stimulus bill?
The good news is that both parties agree further stimulus is necessary. The not-so-good news is that they remain quite a bit divided over the final price tag of the bill.
At the end of September, Democrats had agreed to lower the final price tag of a stimulus bill to $2.2 trillion. Republicans would still prefer to pass a bill worth about $1 trillion less, fearing that devoting too much funding to unemployment will only encourage further unemployment.
Both parties agree on a stimulus but offer differing amounts.
Democrats prefer a stimulus of $1,200 per family member, including up to three qualifying children. On the other hand, Republicans would rather include unlimited numbers of dependents, due to the fact that adult dependents and children over 16 were left out of the last stimulus deal. However, those payments would amount to $1,200 per taxpayer plus only $500 for each dependent.
Not everyone would receive a stimulus payment.
Both parties agree that taxpayers of lower annual incomes should receive priority, with the payments phasing out at middle and higher incomes. Per the last bill, the phase-out for single taxpayers would begin at $75,000 and go up o $99,000. For married taxpayers the phase-out would begin at $150,000 and continue up to $198,000.
When could stimulus payments arrive?
Assuming Congress can pass a bill, payments would be distributed beginning the week after it is signed. The entire process would likely take a few weeks. In the event a bill is passed the first week of October, for example, most taxpayers would probably receive their checks by the first or second week of November.
Of course, it is always best to avoid spending any money before it is received! With the election looming, odds are good that Congress will finally pass another stimulus bill. But because Democrats and Republicans continue to struggle with compromise, nothing is certain at this time. Continue to exercise reasonable financial planning strategies, and call us to schedule an appointment if you have any concerns.
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