Things are moving fast regarding the coronavirus financial relief packages—albeit not fast enough if you are one of the many folks still awaiting the $1,200 stimulus check to hit your bank account or mailbox. So much is in flux right now within organizations. Employees are seeking answers, and their supervisors and HR leaders must make it a priority to stay informed and up to speed on what’s happening with these stimulus payments and the details of the various coronavirus financial relief packages and proposals. By staying informed, you can accurately—and regularly—update employees and colleagues including those unemployed who have already been furloughed or laid off. As a leader, you have a responsibility to alleviate some of the stress employees are experiencing, and you can do this by initiating dialogue that will keep everyone abreast of the details.
To date, Congress has passed three different financial relief packages—the last of which authorized the first cash stimulus check for U.S. residents. We know this as the $1,200 stimulus check. But now, congressional representatives are moving to pass the fourth coronavirus financial relief package, and a proposal has been made to authorize a second stimulus payment to be incorporated within it. Only this time, instead of a one-time payment, representatives seek to get at least six payments of $2,000 included in the plan. These payments would span a minimum of six months but could extend beyond that so long as the employment to population ratio remains 60% or below.
Will Congress end up passing a bill that guarantees monthly payments of $2,000 for at least six months? That remains to be seen, but here is a comparison of how the second stimulus check (if passed) would differ from the first.
4 Major differences between the $1,200 and $2,000 stimulus payment plans
First. The $1,200 payment has already been signed into law while the $2,000 payment has only been proposed to become new law.
Second. The $1,200 stimulus payment is a one-time payment, and the $2,000 stimulus payment is being proposed as a guaranteed monthly payment for a minimum of six months.
Third. College students and disabled persons aren’t eligible for the $1,200 payment if they can be counted as a dependent on someone else’s tax return. However, with the $2,000 payment, college students and disable persons would actually be able to receive the payment regardless of dependent status.
Fourth. Individual income limits for the $1,200 payment are less ($75,000) than the individual income limits for the $2,000 payment ($130,000). And for couples, these individual figures are doubled.
Here are more details about both stimulus payments below.
The $2,000 Stimulus Check
- This has not yet passed; it currently stands as a proposal in Congress. The $2,000 payment would be included as part of fourth coronavirus financial relief package which is called the Emergency Money for the People Act.
- It is being proposed as multiple payments from the federal government of $2,000 per month for at least six months and until the U.S. employment population ratio rises above 60%.
- Eligibility for the payments would be based on income. Individuals must earn $130,000 a year or less to receive the full payment, and couples would need to earn $260,000 a year or less for full payment.
- Parents would receive $500 per eligible child for up to three children.
- You must be a U.S. citizen to receive this payment. It is being proposed for those aged 16 and older.
- The payment would never have to be repaid.
- It would not be counted as income so taxes would not have to be paid on this money.
- Unlike with the $1,200 stimulus payment, college students and persons with disabilities would be eligible to receive these payments even if they are being claimed as a dependent on another person’s taxes.
- You would be eligible to get this payment even if you didn’t earn any income.
Until and/or unless the $2,000 per month payment becomes law, the comparison details are limited to these points. Also, the proposal is being described as purposed for Americans who have been impacted by COVID-19. It’s unclear how that will be specifically defined or whether it would end up explicitly excluding any Americans.
The $1,200 Stimulus Check
- This already passed in Congress and was signed into law by President Donald Trump on March 27, 2020. This stimulus payment is part of the CARES Act, and payments are being rolled out now.
- It is a one-time payment from the federal government.
- Eligibility for the payment is based on income. Individuals must earn $75,000 per year or less to receive the full payment, and couples need to earn $150,000 or less per year for the full payment.
- Parents will receive $500 per eligible child.
- You must be a U.S. citizen to receive this payment.
- The payment never has to be repaid.
- It would not be counted as income so taxes wouldn’t have to be paid on this money.
- College students and persons with disabilities are not eligible to receive the payment if they were claimed as a dependent on another person’s taxes.
- You are eligible to get this payment even if you didn’t earn any income.
- You are eligible to get this payment even if you’re unemployed or currently receiving funds via the Federal COVID-19 Unemployment Insurance Relief program. This program provides up to $600 per week of additional unemployment monies.
- If you don’t file taxes because you aren’t required to, you are still eligible to get this stimulus payment. If you earn too little income or have other reasons for not having to file taxes, use this IRS tool to insert your details and request the $1,200 stimulus payment.
- You don’t need a bank account to get the payment, but it does help. You can go here to use the IRS tool to add bank account details if you want to have your payment sent to your bank.
- You can wait to get your check in the regular mail, but it is likely to take longer, and the payment will be mailed to the address used on your 2018 or 2019 tax filing, whichever you’ve filed last.
- You need to have filed your 2018 or 2019 taxes if you earned more than $12,200 for individuals or $24,400 for couples or if you are otherwise required to file taxes. The government will pull information from the latest tax year you file (either 2018 or 2019) to determine your income eligibility.
- The filing deadline for 2019 taxes has been extended until July 2015. If you haven’t yet filed your 2019 taxes, you can choose whether it’s in your best interest to hurry and get them filed immediately. If you earned less in 2018 than you did in 2019 and the difference matters with regard to the stimulus payment income limits, then you can consider whether or not to file 2019 early or to go ahead and let your stimulus payment be determined from your 2018 tax filing income.
- Undocumented immigrants—even those who file tax returns and pay federal taxes—aren’t eligible for this stimulus payment.
- This stimulus payment can be withheld in full and/or reduced to pay delinquent child support payments. However, the $1,200 payment isn’t supposed to be withheld or reduced to pay delinquent student loan payments.
As an organizational leader, remember that information is power. Specifically during a crisis and at times of change, people value and need accurate information more than ever. You can alleviate some anxiety by ensuring that all employees know about their options and what to expect regarding any company and/or government financial support during this pandemic.