US continues third round of stimulus payments with paper checks and pre-paid debit cards

The issue of a third round of stimulus checks under US President Joe Biden’s $1.9 trillion (€1.61 trillion) American Rescue Plan has now seen just over 127 million payments sent to US citizens in an effort to ameliorate the economic effects of the coronavirus pandemic. The first tranche of $1,400 (€1,189) one-off payments to eligible recipients was sent out by the Internal Revenue Service (IRS) in the week ending March 17, with a second issue the following week. The majority of payments were made via direct deposit to personal bank accounts with the remainder being sent out physically in the form of paper checks or pre-paid debit cards.

After the direct deposit system was closed on March 24, the IRS informed US citizens that the issue of non-direct deposit payments would be taking place over the next few weeks and suggested recipients keep an eye on their mailboxes for paper checks and Economic Impact Payment (EIP) debit cards amid ongoing delays being experienced by the US Postal Service. The postal issue is expected to reach a further 30 million eligible Americans.

The IRS said the issue of paper checks and debit cards would take place over the next few weeks

The Treasury Department has stressed it is not necessary for recipients to take any action to ensure the arrival of their stimulus check as the batch of postal credits is pre-guaranteed. The IRS has set up a Get My Payment portal on its website for recipients to track the status of their third stimulus check as well as providing information for people still awaiting delivery of a check from the first and second rounds issued under the $2.2 trillion (€1.9 trillion) CARES Act of March 2020 and the $900 billion (€764 billion) stimulus relief package included in the Consolidated Appropriations Act passed last December.

The IRS website has also set up a page with information regarding phone and email fraud after the Inspector General issued a warning over an increase in stimulus check-related scams targeting people’s personal and banking details.

The IRS has also taken measures to try and ensure that there is no recipient black hole in the latest round of stimulus payments after an estimated eight million people failed to receive their checks under the previous economic relief packages. Both the IRS and the Bureau of the Fiscal Service have increased payment coverage in the latest round of checks by means of the database updates made by users over the past few months.

The United States Congress passed the American Rescue Plan Act on March 10 after its passage through both the House of the Representatives and the Senate, where some amendments including the removal of a provision to raise the federal minimum wage to $15 (€12.70) an hour were made. Biden signed the $1.9 trillion bill into law the following day.

The postal issue is expected to reach a further 30 million eligible Americans

Among the other changes made were eligibility criteria for the third stimulus check. In the initial draft approved by the House, the annual income threshold was set at $75,000 (€63,700) in Adjusted Gross Income for individuals and $150,000 (€127,400) for married claimants with a sliding scale of reduced payments for individuals or joint filers earning more per annum based on a claimant’s 2019 or 2020 tax return. The upper limit was set at $100,000 (€849,000) and $200,000 (€169,000) respectively with people earning in excess of those amounts not eligible for a stimulus check.

In the amended final bill that was approved by the Senate, the criteria were narrowed to preclude individuals with an AGI of more than $80,000 (€68,000) a year, heads of household earning more than $120,000 (€101,000) and joint filers with a combined income of over $160,000 (€135,900) from qualifying for a stimulus check payment.

It is estimated that a total in the region of 160 million stimulus checks will be issued under the American Rescue Plan using these criteria. Those who don’t normally file taxes and are not receiving federal benefits may also be eligible if they submit a 2020 return. The IRS website provides access to a free tax return preparation facility for people requiring assistance with their returns.

English version by Rob Train.