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New Stimulus: Better Late than Never!

By Terry Savage on December 21, 2020

Congress finally passed another stimulus bill. It won’t be as much money as the first go-round last spring — but it will extend and increase unemployment benefits and send a $600 check to qualifying adults and dependent children. Here are some of the details, which will be refined as the legislation is written.

• $600 per adult and dependent child
• Extend Unemployment extra 11 weeks for ALL unemployment
• Adds $300/week to unemployment (vs original $600)
• Extends ban on evictions, foreclosures
• Money for PPP loans, airlines, live events, and more

The details of the stimulus are similar to the one earlier this year. Payments go to those earning up to $75,000 or $150K on joint return – but the income can be based on the 2019 return, or even the 2020 return that will be filed in the next few months.
A reminder that the $600/child goes only to dependent a child under 17. If you have older children, perhaps college students, and they can demonstrate that they contribute to their own support, they could also qualify for this new $600 check. But they cannot be listed as a dependent on a parent’s return!

The stimulus payment should arrive in the same way as the previous one. If the government has your banking information, you can expect a direct deposit in the next month. Otherwise, it will be sent in the form of a check or bankcard. Recipients of Social Security and SSDI should get their 2nd stimulus by direct deposit.

If you didn’t get the FIRST stimulus, don’t despair. If you qualify based on income on either 2018, 2019, or the 2020 return you will soon be filing, you can get the original stimulus payment when you file your 2020 return — using a special line called the RECOVERY REBATE CREDIT. It is a REFUNDABLE credit, meaning that even if you didn’t have much 2020 income and aren’t required to file, you should file just to get this credit as a refund! More details on this filing and forms will be forthcoming.

The unemployment extension applies to regular and PUA benefits – extending basic benefits plus $300/week until March 14th. It should happen automatically, but that will depend on state unemployment systems reorganizing their computer programs. In Illinois, given the mess at IDES, the situation is especially iffy. There is likely to be a gap if benefits were scheduled to end in December, but the law requires back payments be made.

This article will be updated as more details become available, regarding applications for the new round of PPP loans, and other opportunities.

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