Hill Street Studios | DigitalVision | Getty Images
As Congress works to hammer out a deal for a new coronavirus relief bill, that could mean new stimulus checks for millions of Americans.
New $1,400 direct payments are among the aid expected to be included in the package. The proposal also includes other measures to help Americans get through the ongoing pandemic, such as more enhanced federal unemployment benefits and raising the federal minimum wage to $15 per hour.
Currently, the terms call for direct payments of $1,400 per individual, or $2,800 per married couple, plus $1,400 for both child and adult dependents.
More from Personal Finance:
Students lament Biden refusal to cancel $50,000 in student debt
As tax season starts, many still wonder where their $600 stimulus check is
Child tax credit proposal could give families more aid than stimulus
The payments would be based on the same income thresholds as the first two checks. Individuals with up to $75,000 in adjusted gross income, heads of household with up to $112,500, and married couples who file jointly with up to $150,000 would get full payments.
But the checks would be phased out for those with incomes above those levels. This time, that would be individuals earning $100,000, heads of household with $150,000 and married couples with $200,000.
The coronavirus stimulus package is working its way through the House and Senate under budget reconciliation. That process will prevent big alterations to the plan, although final numbers could change.
Some lawmakers have pushed for lowering the income phase outs to $50,000 or $60,000 in order to better target those who need the money.
“These details are not yet final and could see further adjustment,” Ed Mills, Washington policy analyst at Raymond James, wrote last week, “but so far have received little pushback from moderate Democrats who sought a greater degree of targeting for upper-income payment recipients.”
Prospective $1,400 payments timeline
The legislation is expected to become final around early to mid-March.
At that point, the IRS will be deep into tax-filing season, which could make it more challenging for the tax agency to process both payments and incoming returns, said Howard Gleckman, senior fellow at the Urban-Brookings Tax Policy Center.
Last year, the first $1,200 stimulus checks were also authorized during tax season. Ultimately, the tax filing deadline was extended to July 15 from April 15 .
Still, the IRS was able to get the bulk of those $1,200 payments out within a few months.
“They did an amazing job, much better than we ever imagined they would do, getting particularly that first round of economic impact payments out,” Gleckman said.
This time, Democrats have proposed for the checks to be based on either 2019 or 2020 returns.
That could create an incentive to file early, particularly if your income dropped in 2020, which could increase the size of your check, Gleckman said.
If instead the IRS uses your 2019 information and you qualify for more money based on your 2020 income, you may have to wait a full year until next tax-filing season to get the rest of what you are due, he said.
Alternatively, if your income was less in 2019 than in 2020, you could get a bigger check if the IRS uses last year’s filing.
As with the first two stimulus checks, the bulk of the payments will likely be sent via direct deposit to those who have their bank information already on file with the IRS. Based on past checks, that money could start to arrive within days of the legislation getting finalized.
The rest of the direct payments will go out by mail either as debit cards or checks. Those payments may take several weeks to arrive.
“The good news is that there is a bit more infrastructure and a more formalized process to do this than this time last year, because they’ve been through it twice,” said Garrett Watson, senior policy analyst at the Tax Foundation.
One wild card is a proposal to expand the child tax credit. If that gets passed along with the current relief bill, the IRS may send families who qualify monthly payments of up to $300 per child.
On Tuesday, the IRS said it had sent out all “legally permitted” first and second stimulus checks and is now focusing on the tax-filing season.
The tax agency sent more than 160 million $1,200 stimulus checks that totaled more than $270 billion. It has also sent more than 147 million $600 direct payments totaling more than $142 billion.