Congress is working to pass another stimulus check bill, but the second round will likely look different than the first. According to experts, Americans can expect three major changes.
Back in March, Congress passed the Cares Act. The bill included a one-time $1,200 stimulus check for adults (and $500 for children). However, Congress capped the qualifying individuals at $75,000 for single taxpayers and $150,000 for joint taxpayers.
In the next potential stimulus check, Congress looks to narrow down the qualifying individuals even further. Majority Leader McConnell previously mentioned that Congress hopes to target payments to Americans in the greatest financial need. “I think the people who have been hit the hardest are people who make about $40,000 a year or less,” he said.
According to the experts at Forbes, here are the three major changes for the next stimulus check bill:
Lower Federal Unemployment Benefits
Currently, the weekly $600 federal unemployment benefits extend through July 31st. However, some lawmakers feel it creates a disincentive to work in states with a low cost of living.
For example, in the state of Tennessee someone on unemployment can earn an annual pre-tax salary of $45,500. This number includes the maximum weekly unemployment benefit in TN of $275 plus the $600 Cares Act benefit. In many parts of the state, $45,500 is quite a comfortable income.
Smaller and More Targeted Stimulus Payments
Two of the major questions about the second stimulus bill remain. Firstly, who gets a check? Secondly, how much?
The most-affect households during the coronavirus pandemic make $40,000 or less. While the Cares Act and the Heroes Act share a $75,000 limit, the next bill will likely set the bar at $40,000 and below. Additionally, lawmakers haven’t shed any light on the amount given per check.
Payroll Tax Cut
Over the course of second stimulus bill discussions, President Trump remained constantly in support of payroll tax waivers on Social Security and Medicare tax withholdings.
Currently, the Social Security tax rate is 6.2% on the first $137,700 in annual income with 1.45% for Medicare. The new bill may temporarily reduce the tax amount and increase take-home pay.