Stimulus checks are direct payments to American families that was provided by the US government in order to help the families during covid-19 pandemic. Stimulus checks were intended to stimulate the economy by providing consumers with some spending money. Stimulus checks are a form of a fiscal policy which means this policy is used by the government to try and influence the economic condition of the country. These Stimulus checks were either mailed out to taxpayers or provided as an equivalent tax credit, People with unpaid taxes will mostly see the checks automatically applied to their outstanding amount owned.
Eligibility to qualify for a stimulus check:
-Must be a resident of California for most of last year and still live in that state.
-Must have filled a 2020 tax return.
-Total income i.e. gross income and wages earned must be less than $75000 during the 2020 tax year.
-Must have a social security number(S S N) or an individual taxpayer identification number (I T I N) and cannot be claimed as a dependent by any other taxpayer.
People who are not eligible for a stimulus check
-Individual taxpayers with AGI of $80000 or more aren’t eligible
-Married couples filing jointly aren’t eligible if they have an AGI of $160000 or higher
-Non US citizens or ‘nonresident aliens’ aren’t qualified
How to check the stimulus check status?
There is a website created by IRS where the status can be checked
If the payment has been processed the IRS will specify its status including whether it has been sent, the date issued and whether the money will be directly deposited or mailed.
If payment hasn’t yet processed or the person is not eligible the status will read as “payment not available”.
If the check was returned to the IRS after an attempted delivery it will read as “Need more information”, if that’s the case give IRS the bank information and the money will be received.
There were three round of issue of stimulus check
-The first round of stimulus payment was authorized under CARES act. The initial payment issued in the beginning of 2020 was $1200 per person or $2400 for people filing jointly also $500 for qualifying child.
-The second round of stimulus payment was authorized in December 2020 as a part of consolidated appropriations act 2021.These payments were $600 per person or $1200 for married individuals also $600 for each qualifying child.
As of March 2021, about $135 billion of the second round of payments have been sent out; overall, such payments are expected to cost a total of $164 billion according to the Congressional Budget Office.
-The third and the most recent were in the American rescue plan which was enacted on March 11, 2021. Eligible people will receive a payment of $1400, plus an additional $1400 per eligible child.
President Biden and Senate Democrats settled on that amount because many Americans thought the $600 second-round checks were insufficient and that they should have been for $2,000. However, not every lawmaker was willing to go that far and support an additional round of $2,000 stimulus checks. So, instead, the idea of authorizing a combined total equaling $2,000 was born ($600 second-round checks + $1,400 third-round checks = $2,000)
Also, if someone does not have to pay immediate bills they can invest their stimulus check through a number of ways:
- High Yield Saving Account: Investing the stimulus check into high yield saving account make the money accessible, avoid risks, and help earn a reasonable rate of return.
- Certificate of deposit: If someone is okay with locking up their money for a long time then certificate of deposit is one of the best option to invest stimulus check. Opening a CD with stimulus check can provide higher interest compared to High yield saving account.
- Brokerage: Short term investment in brokerage is riskier compared to long term investment. A brokerage mainly allows investment in a variety of assets which consist of ETFs, stocks and mutual funds. One can potentially earn larger returns by investing with one of the best online stock brokers.
Money market account: Money markets are very similar to savings account and generally have easier access to money through debit card or cheque. Although the money market rates are slightly lower than that of saving accounts.