Stimulus Update: Will There Be Another Payment Because Of Omicron Variant
Despite a demand for a fourth stimulus check as the Omicron variant spreads throughout the U.S., it looks unlikely that there will be a fourth stimulus check. AP
The rising case numbers of COVID-19 that have been attributed to the omicron variant have left some wondering if the federal government will distribute a fourth round of direct payments in the form of a stimulus check.
In the past, the imminent or ongoing threat of another wave of COVID-19 led to the government giving out more stimulus checks.
But this time, due to the soaring amounts of inflation we are seeing in the U.S. caused by the massive amount of government money poured into pandemic relief, it seems more unlikely than likely that there will be a fourth stimulus check.
Here is what you need to know.
Are The $1400 Checks A Done Deal
Very likely, according to Wall Street and political analysts. There is growing support among Republican lawmakers for additional stimulus directed toward low- and middle-income households, with the latest effort to pass $2,000 stimulus checks winning some bipartisan support.
Theres an 85% chance a scaled-down package will be passed in the first three months of 2021, predicts Height Securities Hammond. Because of the ongoing support for additional direct aid to households, checks are likely to be included in that smaller package.
We believe there is support for a smaller package that includes the $1,400 checks, more health care funding, support for small businesses, and some state and local aid, Mills said.
Fourth Stimulus Check Amount
The fourth stimulus check amount depends on several factors. If passed, it would probably look similar to the previous checks, although that’s not guaranteed.
For reference, the first stimulus check amounted to as much as $1,200, while the second stimulus check brought $600 to eligible Americans. The third stimulus check, which the IRS is still in the process of distributing, is worth up to $1,400 per person, although the eligibility requirements are narrower.
All three checks gave the full amounts to taxpayers who made up to $75,000 a year, according to their most recent tax returns. Couples filing jointly got the full payment if they had a joint total income of $150,000 or less.
With the first two checks, those making up to $99,000 alone or $198,000 as a couple received prorated payments. With the third check, individuals who earned more than $80,000 per year or $160,000 per year as joint filers got nothing. Our guide to the stimulus check calculator can show you what your own eligibility looks like.
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What Should You Do With Your Third Stimulus Check
Lets be real: Three stimulus checks in a year is not normal. This third payment can go a long way to help you catch up on bills, pay off debt, or build up your savings. And for a lot of folks, those stimulus checks have kept food on the table. In our State of Personal Finance study, we found that 41% of people who got a stimulus check used it to pay for necessities like food and bills.
So, based on your situation, heres where you start:
If youre out of work or missing a paycheck, use this stimulus money to protect your Four Walls:
Focus on the necessities so you can have peace of mind as you keep looking for work or get your income back up. That means if youre working the Baby Steps and youre out of work, pause your plan for now. Pile up cash until you have a steady income again. Then you can attack your debt. Theres nothing like fighting through a financial crisis to light your fire to be debt-free as soon as possible!
On the other hand, if your job is safe and you feel like itll stay that way, use your stimulus money to build momentum on whatever Baby Step youre on. Put your debt snowball into overdrive. Knock out your fully funded emergency fund . Or talk to your investment professional about giving your retirement a big boost !
Bringing Inflation Under Control Is The Goal
Over the course of 2021, many economists and policymakers at the Federal Reserve felt that the higher-than-normal inflation would be temporary. However, as the level of inflation continued to rise to new heights by the end of the year the consensus shifted, and the central bank decided to be more hawkish.
In January the Fed announced that it would begin tapering its stimulus programs which have poured vast amounts of liquidity into the US economy. It has also helped the stock market reach ever greater heights.
Additionally, the central bankers will start increasing interest rates, expected to begin in March, which have been at near zero during the pandemic. The Fed will have a difficult balancing act to pace the fiscal tightening without entrenching inflation by moving too slow or causing a recession if it moves too fast.
Although another stimulus check could help people with the rising cost of living, the fear of driving inflation even higher by injecting even more money into the economy has silenced lawmakers calls to do so.
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Another Stimulus Check More Direct Payments Are Going Out In These States
Although another round of federal stimulus checks appears unlikely to be approved, some states are sending out additional direct payments to many residents as the economic fallout from the COVID-19 pandemic persists.
Congress previously approved three rounds of stimulus checks to be sent out to the majority of Americans. The first, for $1,200, was approved back in March 2020 as the nation locked down in an effort to curb the spread of COVID-19. Congress approved another round of $600 direct payments in December 2020 and President Joe Biden pushed through an additional $1,400 stimulus check as part of his $1.9 trillion American Rescue Plan approved by House and SenateDemocrats this past spring.
While millions of Americans have signed online petitions urging the federal government to provide more aidincluding reoccurring monthly payments of $2,000Congress is not currently considering any such legislation. However, California and some other states have approved stimulus payments for many of their residents.
More than 1 million stimulus checks and direct payments of up to $1,100 are set to go out in California on Friday and early next week as part of the Golden State Stimulus approved earlier this year. California residents who earned up to $75,000 in 2020 are eligible to receive $600 payments as well as an additional $500 for a qualifying dependent.
Is This The Last Stimulus Check
WASHINGTON Even though the third stimulus check hasn’t even been signed into law yet, questions are emerging about a potential fourth stimulus check.
WHAT IS COMING
After House Democrats approve the American Rescue Plan on Wednesday, as is expected, President Joe Biden will sign the legislation shortly thereafter.
The last time stimulus checks went out, the IRS began depositing checks into some accounts within days.
This time, it isn’t expected to be as quick, with the IRS having to factor in tax season and a new administration, but the expectation is that checks will be in accounts within two weeks.
For Americans making under $75,000 a year, a full $1,400 stimulus check will be given. For those earning between $75,000-$80,000 a year, a prorated amount will be given.
If you earn over $80,000 a year, you will get nothing in this bill.
The IRS uses your adjusted gross income on your latest tax return to determine eligibility.
ODDS ARE SLIM FOR ANOTHER ONE
While you may be getting another stimulus check, you shouldn’t bank on a fourth stimulus check.
While some progressives would like to see more relief, politics around the issue will likely get complicated.
When asked about another round potentially, Speaker Nancy Pelosi said Tuesday, “You’ll have to ask the virus.”
One big reason a fourth stimulus check will struggle to gain support initially is because of Senate rules.
The third stimulus check only passed the Senate because of reconciliation.
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More Third Stimulus Payment Money For Some In 2022
Parents who added a child in 2021 could be getting up to $1,400 after they file their 2021 taxes this coming spring thanks to the American Rescue Plan. The money won’t come as a direct check but will be part of the overall tax return.
The 2021 Economic Impact Payment — colloquially known as the third stimulus check — was actually an advance on what is called the 2021 Recovery Rebate Credit. What that means is that the $1,400 stimulus check most individual Americans received in 2021 is, in fact, money they would have gotten after filing their taxes in the spring of 2022 as a Recovery Rebate Credit.
In other words, millions of Americans already got part of their tax refund 12 months early.
“The bottom line is that’s money that’s going out almost immediately to millions of people as a tax credit in advance of putting it on a tax return in the next year,” said Raphael Tulino, IRS spokesman.
However, the IRS was going off of 2019 or 2020 tax returns for its information on the third EIP. It was using that information to determine if taxpayers would get stimulus money for their dependents. If eligible parents had a child born into their family in 2021, they can request the Recovery Rebate Credit on their taxes to get the payment for that child.
It gets more complicated with adoption because all the paperwork and processes to finalize the adoption must be completed first.
This does not pertain to the first or second stimulus payments that were paid in 2020.
Stimulus Check Scams And Hoaxes
Of course, popular demand for widely distributed stimulus payments, and the confusing political maneuvering that goes into crafting stimulus bills, creates an information gap that’s easily exploited by scammers.
Even with the first wave of stimulus checks in 2020, we saw bogus email messages that pretended to be from the IRS, promising “an important update on your Covid relief fund.” But they just took you to phishing sites that wanted your Social Security number and other sensitive bits of information.
Following the second stimulus bill at the beginning of 2021, those email phishing attempts were joined by scam phone calls demanding your personal details so that you could be “cleared” to receive more stimulus checks.
In March, as President Biden’s American Rescue Plan was making its way through Congress, new phishing emails promised the moon: a $4,000 stimulus check, a boost in the minimum wage, free meals and, best of all, priority treatment that let you skip lines at COVID-19 vaccination sites.
Most recently, cruel pranksters have been passing around posts on Facebook that a fourth stimulus check worth $2,500 is coming by the end of July. Don’t believe it, and don’t believe the phishing websites that claim to register you for child-tax-credit advance payments.
In fact, most parents and legal guardians don’t need to do anything to get the payments they’ll just show up in your mailbox or bank account.
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When Would I Get A $1400 Check
Alec Phillips, chief U.S. political economist with Goldman Sachs, thinks the package could be passed in mid-February to mid-March. After the relief bill passes Congress, it must be signed by the president. After that, the IRS would distribute funds through direct deposit, mailed checks and prepaid debit cards.
In the first stimulus payments in April 2020, which directed $1,200 to eligible adults as well as $500 per child, it typically took two weeks to several months for payments to reach people. The second round of checks, which sent $600 to each eligible adult and child, required about a week for the funds to arrive via direct deposit.
But in some cases people experienced delays in receiving the money due to problems with their account information. Based on previous stimulus money payouts, and assuming Congress passes a new relief bill by mid-February, the checks could arrive in bank accounts by late February, although that would likely be a best-case scenario. If a package is passed by the end of March, people might get their checks by early April.
Why A Fourth Stimulus Check Unlikely
All of this voiced support keeps alive the possibility of another round of stimulus checks or recurring stimulus checks. It doesnt make either of them likely, however. And there are a many reasons why.
Vaccinations are progressing steadily. Adults and those at least 16 years old are now eligible to be inoculated in all 50 states. Some places allow vaccinations for those as young as 12. Three different options are available to the public since Aprils pause on the Johnson & Johnson vaccine was lifted. Actually putting needles in arms still takes time, even with supply caught up to demand. Americans have received over 297 million doses, with 50.9 percent of the population having received at least one dose and 41.2 percent completely vaccinated. Vaccination numbers continue to increase at a rate of about one million doses per day. The Centers for Disease Control and Prevention recently advised that the fully vaccinated can forgo masks and social distancing in most indoor and outdoor settings.
In Nersisyans view, lets see if people still need more assistance. Lets see how the economys doing as things keep opening up and the vaccination rates go up and things go back to some sense of normal. And lets see where the unemployment numbers are. Are people still running behind on their rents and mortgages and so on? And based on that, lets decide whether we need to inject more spending into the economy. I would say wait and see right now.
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Stimulus Blamed For High Inflation
The final round of $1,400 direct payments which started in March 2021 along with the massive amounts of covid-19 relief funds injected into the US economy have been blamed for the higher-than-normal inflation afflicting the nation. The Federal Reserve Bank of San Francisco looked at the effect of the American Rescue Plan specifically on inflation.
It found that Bidens stimulus is temporarily ratcheting up inflation, but not causing overheating as has been suggested. Their analysis found that the ARP, is expected to cause inflation to increase by about 0.3 percentage point in 2021 and by a bit more than 0.2 percentage point in 2022. The impact in 2023 is negligible.
Other factors are helping push up prices on just about everything, a major source has been disruptions to supply chains caused by the pandemic. This caused manufacturers to scramble to secure scarce supplies of inputs to make their products. Americans in turn have been scooping up consumer goods with excess savings they acquired during the lockdown increasing demand on limited supplies.
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Stimulus Check Deadline Approaching
So, for that matter, can other agencies within the federal government. In fact, the deadline for one such stimulus check is fast approaching. For state agencies and nonprofits, though individuals cant directly apply for this particular payment.
This one is a $600 check as part of the Farm and Food Worker Relief Grant Program. Per the US Agriculture Department, Entities receiving awards will then distribute relief payments to frontline farmworkers and meatpacking workers who incurred expenses preparing for, preventing exposure to, and responding to the COVID-19 pandemic.
USDA strongly encourages small organizations to partner together or to partner with national organizations in submitting applications to ensure this support has the broadest reach and distribution possible to Americas farm and food workers.
Of the total pot of money, $20 million is also going toward a grant or grants for grocery store workers. And February 8, 2022, is the date that participating agencies need to circle on their calendar.
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$2000 Or $1: Whats The Total Likely To Be
Biden announced on Friday that hes in the process of assembling a multi-trillion dollar relief package that includes boosting direct stimulus payments to $2,000, as well as extending unemployment insurance and sending money to hard-hit state and local governments.
The price tag will be high, Biden said. We need to provide more immediate relief for families and businesses now.
While the details are far from finished, those remarks suggest that the next relief package may send Americans a part-two top-up payment worth $1,400 to round the $600 second stimulus check up to a total of $2,000.
Senate Minority Leader Chuck Schumer reiterated in a Jan. 12 letter that the Senates first order of business under Democratic control will be pushing to increase direct payments to a total of $2,000.
Lawmakers, however, could also decide to send a third, separate payment worth $2,000 to most middle-income Americans, though all of that depends on Congress level of comfortability with throwing more money at the crisis.
Sen. Joe Manchin, a Democrat from West Virginia, said in a Sunday interview on CNN that he would support a more targeted form of aid, rather than sending out money to everyone under a certain income threshold.
Getting any kind of stimulus legislation through would require support from every Democrat in a 50-50 split.
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