With the announcement that the coronavirus relief bill passed the Senate early Thursday morning, we at KNWA and FOX24 were overwhelmed with questions about how it works, who is receiving the stimulus checks and much more.
Many questions are answered here with an FAQ article. We also reached out to our political analyst, Dr. Brian Calfano, to take a deeper look and get answers to more of your questions.
Will those on Social Security or Disability receive a stimulus check?
“The good news is even if you’re on Social Security and had no earned income for tax year 2018, you’re eligible for a stimulus check so long as you receive a 1099 form from Social Security to report to the IRS for 2018,” says Dr. Calfano. “So you’re going to get a stimulus check.”
Is the stimulus money taxable?
“The money is like a grant, not a loan. You’re not paying this money back to the government with interest over time. It’s money the government wants to get into the hands of mid to low income earners to be able to stimulate purchases and get the economy moving. The money, therefore, is not taxable. It wouldn’t make any sense for the government to come along and give us this money to stimulate the economy and then have it add to our tax burden. So the money that we’re getting is not going to be taxable.”
So do I pay it back?
“As of right now there is no payback mechanism. There was use of the term ‘rebate’ in earlier versions of the bill, but there is no provision in the Senate bill for paying it back. The only possibility of someone paying back the money is if they jump significantly in income in 2020 versus 2018 and 2019. So much so that it pushes them over the cut off thresholds. But the projected number of people in this situation is about one percent of taxpayers.”
Who gets the payment for children? Do I have to be married to receive it?
“Every parent or guardian with a kid under the age of 17 is eligible for $500 per child, but that has an income cap limit on it. So if you’re single and you’re making up to $99,000 you will get the $500 per child. Head of Household up to $146,000, you’ll get the $500 per child. Married couple up to about $198,000, you’re going to get $500 per child. If, however, you exceed those income limits, under the Senate bill, you’re not getting the $500 per child.”
What should I use this stimulus money for? Should I spend it or save it?
“You can use the money for whatever you want,” says Dr. Calfano. “You can save it, you can spend it. The idea is the government wants you to spend it because it wants to stimulate supply and demand and make sure that people are able to get the goods they need and to help people keep their jobs that have been threatened by these shutdowns attributed to the coronavirus.”
Has this type of stimulus payment been tried before? If so, did it work?
“It’s happened before, back in 2007 former President George W. Bush and Congress sent out about $500 per American to try and stimulate the economy in the face of an economic downturn. The big question is, does it really help? It helps to a certain degree. It might keep things from getting worse in certain sectors and certain parts of the country. Is it gonna keep us out of a recession? No, I don’t think any economist is anticipating that. But it is something that will at least soften the blow.”
There had been talk before about two stimulus checks, but this bill just has one. Will we see another stimulus check later in the year?
“Of course 2020 is an election year, so it behooves the President and Congress to do what they can to help Americans with their jobs so the politicians can keep their jobs. The current bill does not call for any more stimulus checks but the one. However if the jobless rate continues to tick up and you end up having recession of any kind of depth, I think you’re going to see another series of checks coming out this summer from Congress and the President.”