In the News

American adults earning up to $75,000 and couples making $150,000 will likely be eligible for the full $1,400 COVID-19 stimulus checks Democrats are pushing through Congress as part of President Joe Biden’s $1.9 trillion relief plan.

If approved by Congress and signed by Biden, the stimulus payments will phase out incrementally based on income, with individuals earning more than $100,000 and couples earning $200,000 receiving nothing, according to plan brokered Monday night by U.S. Rep. Richard Neal of Massachusetts.

The Democrats’ latest proposal rejects calls from conservative Democrat Sen. Joe Manchin III of West Virginia and Republicans to limit full payments to those making less than $50,000 or $40,000. Top Democrats and the White House say they want the checks to go to lower-income and middle-class Americans — including millions earning more than $50,000 annually — but not the very wealthy who’ve largely avoided the unprecedented job loss, hunger and housing crises wrought by the pandemic.

“Our nation is struggling, the virus is still not contained, and the American people are counting on Congress to meet this moment with bold, immediate action,” Neal, chairman of the House Ways and Means Committee, said in a statement Monday night.

The committee will markup its proposals on Democrats’ overall $1.9 trillion package Wednesday through Friday, Neal’s office said. Lawmakers hope to approve a stimulus deal by mid-March, when supplemental unemployment insurance from previous relief bills expires.

The newly-proposed caps mark a win for progressives who argued the lower thresholds were out of touch with reality and at odds with disparate costs of living across the country. Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez recently questioned how a Biden White House and a Congress controlled by Democrats could wind up sending stimulus checks to fewer Americans than the Trump administration.

The move from Neal, who did not directly answer questions on income thresholds for the checks during a news conference Monday, came a day after Treasury Secretary Janet Yellen said the Biden administration did not want to leave first responders and educators earning around $60,000 out to dry at a time of unprecedented job loss and increased child poverty.

Many working-class Americans, including educators, health care workers, police officers and firefighters earning more than $50,000 are still struggling to put food on the table, often because they have children and have had to adjust their work schedules or leave work entirely to provide child care, several Democrats argued over the weekend.

“While it is still our hope that Republicans will join us in doing right by the American people, the urgency of the moment demands that we act without further delay,” Neal said.

About a week ago, Republicans, as part of an overall $618 billion compromise, had pressed the White House to target full payments to Americans earning less than $40,000 and couples $80,000, arguing relief should go to those hardest hit by the pandemic. Manchin, meanwhile, sought $50,000 and $100,000 thresholds for full payments.

With Democrats and Republicans evenly split in the Senate — Vice President Kamala Harris could cast the deciding vote in case of a tie — Democrats can’t afford any “no” votes for the stimulus to make its way to Biden’s desk. Some lawmakers are concerned the conservative Manchin could tank the entire proposal, Politico reported.

Another proposal working its way through Neal’s committee would see families receive up to $3,600 per child under 6 and $3,000 for every child between 6 and 17. According to The Washington Post, the payments would decrease for single parents earning more than $75,000 or couples earning more than $150,000 combined.

The comprehensive $1.9 trillion package includes $400 billion for vaccines and to reopen schools; $35 billion to help local governments boost small businesses; and increased supplemental unemployment insurance, from $300 to $400, through September.

Americans hit hard by the economic crisis, or parents who had a child in 2020, could stand to benefit by filing their 2020 returns as soon as possible once the IRS starts accepting them on Feb. 12. According to The Wall Street Journal, the stimulus payments will be based on household incomes listed in either 2020 or 2019 tax returns, whichever is on file with the Internal Revenue Service when the Treasury Department starts cutting checks.

If your income dropped and you file a return before the checks go out, the payments will be based on the 2020 income, potentially making you eligible for a larger stimulus. If you file after checks are distributed, the IRS will base the stimulus on your 2019 income.

If you had a child in 2020, you could be eligible for any potential dependent stimulus payments by filing sooner and claiming the new child as a dependent. The IRS will base the check amount on your 2019 family size if you file your tax return after the checks start going out.

If you happened to get a raise in 2020 but your 2019 income falls within the final new stimulus thresholds, it’s likely worth it to wait before filing your 2020 tax return.