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Second stimulus check proposed by Senators - here's all you need to know

Second stimulus check proposed by Senators - here's all you need to know
(Image credit: Pixabay)

New proposals for a second coronavirus stimulus check have been revealed following the announcement of the so-called HEALS Act - Health, Economic Assistance, Liability Protection and Schools - by Senators. With the coronavirus pandemic showing few signs of relenting, Republicans have revealed the next stage of their plan to counter the job losses and financial challenges being felt by many Americans. 

At the forefront of the plan is a second stimulus check, but how much would it pay this time around and who would be in line to receive it? Here we take a look at what we know about stimulus check 2 after this latest announcement. 

How much will stimulus check 2 pay?

Under the proposals, a second stimulus check would come in at the same amount as the first stimulus payment. This means individuals who qualify could receive up to $1,200, joint-filers could receive $2,400, and an additional $500 would be paid for each qualifying dependent.

And as before, those individuals earning less than $75,000 a year could expect the full amount, with joint tax filers whose combined income is under $150,000 receiving $2,400 in total. A sliding scale would see individuals who earn up to $99,000 and couples on up to $198,000 receive a steadily decreasing payout, with the checks phasing out altogether for those who earn more. 

Second stimulus check proposed by Senators - here's all you need to know

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Who will qualify for the second stimulus check?

If you qualified for a check first time round, you are likely to receive a second payment. So as well as taxpayers, this means individuals who have no income, along with those whose income comes entirely from non-taxable means-tested benefit programs, such as SSI benefits, can expect another payout. 

Will the stimulus check rules change for dependents? 

One difference for the second round of stimulus payments is that there will be no age cap on eligible dependents. For the first stimulus check, the additional $500 was limited to taxpayers with a dependent child under 17; this time, the additional $500 will be paid to taxpayers with dependents of any age. 

When will stimulus check 2 be paid?

While the White House would like the second round of checks to begin arriving in August (opens in new tab), nothing is assured in terms of deadlines. First of all, Congress and President Trump need to agree on the makeup of the second stimulus package overall - while all sides accept a package is needed, agreeing over the finer details is the tricky task. The Senate's last day in session before August recess is August 7, so a final bill will need to be agreed before then to avoid waiting for the session to pick up again on September 8.

Second stimulus check proposed by Senators - here's all you need to know

(Image credit: Pixabay)

Once agreement has been reached, it will still take time to arrange for the payments to be made. The CARES Act that agreed the first stimulus check was passed by the Senate on March 25, the House on March 26, and signed on March 27 - the first checks were sent on April 15, so a period of three weeks from start to finish. However, with the processes already in place, it must be hoped that any turnaround time would be quicker for a second check

What will I need to do to receive the payment?

Details over what you might need to do to receive the second payment are nowhere near being finalized, but are unlikely to stray far from the original process. Most people did not need to take any action to receive the first payment, because eligible taxpayers who had filed tax returns for either 2019 or 2018 were automatically sent the payment that they were eligible for. Those in receipt of Social Security retirement, SSDI, survivors benefits, SSI, Railroad Retirement benefits, or VA Compensation and Pension (C&P) benefits in 2019 also received their payment automatically. 

Of those who did need to take action, most were people who don’t usually file a tax return - such as low-income taxpayers, senior citizens, veterans and those with disabilities. They were asked to complete a simple tax return in order to secure the first payment. 

How will the second stimulus check be paid?

The delivery of the original stimulus checks was not without its problems (opens in new tab), but with a system already in place, things should run a lot smoother for the second checks. It is likely the same combination of mailed checks, direct deposits to accounts and prepaid debit cards (opens in new tab) will all be used again. 

Second stimulus check proposed by Senators - here's all you need to know

(Image credit: pixabay)

What should you do in the meantime?

While it is good news that the wheels are definitely in motion for a second stimulus payment, there are still millions of Americans who are already struggling to cope with their financial situation. For them, there are still measures that you could potentially take to try and ease the burden.

The best mortgage companies (opens in new tab) continue to offer leeway to homeowners (opens in new tab) worried about meeting their monthly payments, while foreclosures and evictions continue to be banned. 

For those with credit card or loan debt who are struggling to meet their payments, credit card issuers are also being more sympathetic than they have probably ever been, so worried borrowers should give them a call to see what assistance is on offer (opens in new tab)

Understandably, household debt overall has been on the rise across the US, and for those for whom debt is becoming a growing concern, the advice is not to let your situation slide out of control. The best debt consolidation companies (opens in new tab) can help you bring your debts together into one place and hopefully result in  a more manageable monthly payment. As an option nearing a last resort, the best debt settlement companies (opens in new tab) could even be used to try and negotiate your debts down. 

With over 20 years’ experience in the financial services industry, Tim has spent most of his career working for a financial data firm, where he was Online Editor of the consumer-facing Moneyfacts site, and regularly penned articles for the financial advice publication Investment Life and Pensions Moneyfacts. As a result, he has an excellent knowledge of almost areas of personal finance and, in particular, the retirement, investment, protection, mortgage and savings sectors.