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THE LATEST ON ROUND 2 OF STIMULUS PAYMENTS

December 23, 2020

By Joshua Ashman, CPA & Nathan Mintz, Esq.

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After months of stalled negotiations, the U.S. Congress (both the House and Senate) on Monday night overwhelmingly passed a $900 billion relief bill, intended to again bolster the U.S. economy, which continues to reel from the Coronavirus pandemic.

A day later, however, President Trump criticized the bill, stating that the bill wastes money in certain areas, on the one hand, and does not provide enough money directly to American taxpayers, on the other hand.

It remains to be seen whether President Trump will sign the bill in its current form or whether Congress will present a new bill with modified provisions.

New Stimulus Payments

Like the CARES Act enacted in March, the current bill calls for stimulus payments to be made to U.S. taxpayers (including those living abroad). However, the stimulus payment is $600 per person, half the size of the $1,200 payments sent out earlier this year.

Further, the eligibility formula to receive the money is more restrictive than the first round. The payments are phased out completely for individuals who earn more than $87,000 and couples who earn more than $174,000. For the first round of payments, individuals who earned less than $99,000 were eligible to receive the money, while couples who earned less than $198,000 would receive a payment.

However, dependents under the age of 17 are eligible for up to $600 payments, which is more than the $500 limit in the first round.

Importantly for many expats, the new bill also includes a provision, which is seemingly retroactive to the first round of payments under the CARES Act, that expands payment eligibility to U.S. citizens who are married to foreign persons who do not have Social Security numbers.

What to Expect Next

Given that it took the US government about two weeks after the passage of the CARES Act to begin sending out the first round of stimulus payments via direct deposit, it seems unlikely that payments will be made before the end of the year.

Passage of a bill is being further slowed down by negotiations between Trump and Congressional members to finalize the bill.

We will continue to monitor the progress of the new stimulus bill and provide updates of the latest news.

 

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