Congress, IRS Prepare for Second Stimulus Payment
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Here's your money briefing for Friday, July 24th. I'm Charlie Turner for The Wall Street Journal. Congress is hashing out the details for a new coronavirus stimulus package.
There's a whole bunch of moving parts in here, and we're just trying to get to the point now where even though those expanded unemployment benefits expire at the end of the month, We're just trying to get to the point where there's a Democratic proposal and a Republican proposal for them to negotiate.
How might the new package compare with earlier efforts? Our U.S. tax policy reporter Rich Rubin will tell us what to expect after the break.
There's bipartisan support for a second round of $1,200 stimulus checks for American households. But what can we expect to emerge from Capitol Hill? And is the IRS prepared? Our U.S.
What stimulus proposals are Congress and the Senate currently negotiating?
tax policy reporter Rich Rubin is here with the latest. So, Rich, it appears that Congress is likely to approve a new coronavirus stimulus bill for President Trump to sign, but the House and Senate are working on different proposals. What do we know about them? Walk us through the major differences.
So in the big picture, the two sides are still very far apart. The House passed a $3.5 trillion bill in May, and the Senate has been kind of waiting to see what the situation is, and they don't yet have an exact plan on what they're going to do. They've been meeting amongst themselves, among Senate Republicans, and they've been talking to the administration, and they're trying to come up with a consensus that they can then take and use as a starting point to negotiate with Democrats. And so the size of unemployment insurance, how much money goes for coronavirus testing, details on the payments that we'll talk about, other tax proposals. There's a whole bunch of moving parts in here. And we're just trying to get to the point now where even though those expanded unemployment benefits expire at the end of the month, we're just trying to get to the point where there's a Democratic proposal and a Republican proposal for them to negotiate.
Well, would these new proposals likely include more people?
As far as the individual payments, yes, it looks like it. The House proposal does include more people, adult dependents. So like you can imagine, college students, senior citizens who are on someone else's tax return, as well as mixed status families, households where some people are citizens and some are not. Or some people are work eligible and have Social Security numbers and some are not. That includes some illegal immigrants, but it's more than that. And then the Senate proposal is likely to only expand for those adult dependents and not go beyond that. The income limits are likely to start phasing out at $75,000 for individuals and $150,000 for married couples, just like the earlier version did.
Let's talk about the first round of stimulus money from this past spring. The IRS faced some problems in getting the money out to taxpayers. Remind us of what happened.
Yeah, so look, in the big picture, this went really fast, right? The previous version in 2008 took months before they got a first set of payments out. They had 80 million payments, direct deposits out within a couple of weeks. That was a real significant accomplishment. And so we shouldn't underestimate the importance of that. On top of that, after that, though, there were some issues. There were payments to dead people. There were... Some households with children who didn't get the payments for the children. It took a while for the IRS to kind of work with Social Security Administration and the VA to get information about people who don't file tax returns but have benefits coming from those agencies and are still eligible.
But the key thing here is that the IRS has done a lot of that work. They have a lot of the information available. And so the more that the eligibility criteria for a second round of payments resembles the eligibility for the first round, the easier it's going to be for them to just hit the repeat button. It's not really that simple, but basically that and get payments out faster.
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