A stimulus package has made its way to the President’s desk, which means relief could be coming soon. Here’s the latest on the second round of relief as the economy struggles to recover from COVID-19.

Update: December 24

House Republicans blocked an effort by House Democrats to approve $2,000 stimulus payments for millions of Americans, leaving the fate of the proposed $900 billion stimulus package mired in doubt.

It likely won’t come in time to wrap it up and put it in your stocking, but Congress has officially passed a stimulus package. The $900 billion stimulus package includes a $600 payment to every qualifying adult and child. But before you start planning to spend the money, there are a few things you’ll need to know.

Use your first stimulus check to bulk up your emergency fund – earn a high APY with a Chime® Savings Account

The bill includes relief for those who fall below a certain income threshold, as well as loans for small businesses and support for vaccine distribution. Here’s what you need to know about a possible second stimulus check coming your way.

Who qualifies for the second stimulus?

Are You Expecting A Second Stimulus Check? You May Have To Wait- Will there be a second stimulus check?

As with the first stimulus payment, not everyone will qualify to receive a payment. To receive the full amount, your adjusted income will need to have fallen below $75,000 in the 2019 tax year. If your income was $75,000 or more, that $600 will be reduced by 5% for every $100 you made above the AGI limit. 

Like the previous payment, the amount phases out entirely for taxpayers who hit a certain income threshold in 2019. Single filers who made $87,000 or more, joint filers earning $174,000 or more, and heads of households earning $124,500 will not receive a stimulus payment at all.

Best of all, the relief payment includes a $600 check for qualifying dependent children. You’ll get $600 for each child under 17 that you claim as a dependent on your taxes. Dependents aged 17 and older won’t qualify for a second stimulus check. 

Why do we need a second round of stimulus checks?

The effects of the coronavirus pandemic are still being felt. While unemployment has dropped to 6.7%, it’s been a rough year for the U.S. economy. And there is still growing concern about the economic effects of COVID-19. Shutdowns have begun again as numbers increase, and the Fed has predicted a subdued economy through 2021. Efforts like stimulus payments can help keep businesses open when consumers might otherwise stop spending.

The second round of stimulus checks will inject more money into your pocket, and ultimately the economy (at least that is the hope). In doing this, it could spark another burst of economic growth, combined with other stimulus package dollars being infused, as well as what the Fed is doing to help economic growth (most recently they began buying corporate bonds).

What if my income dropped in 2020??

The stimulus payments are based on your 2019 taxes. But for many, the pandemic has caused that income to drop dramatically in 2020. If you earned $87,000 or more ($174,000 as a joint filer) in 2019, you won’t receive a second check right now, even if your 2020 income was significantly less. But that doesn’t mean you won’t receive one at all.

If your circumstances have changed, though, you’ll be able to claim the COVID relief payments as a credit on your 2020 taxes. Fortunately, this setup doesn’t work in reverse. If your income increased in 2020 and would put you over that threshold, you’ll still receive a second check based on your 2019 taxes. You don’t have to return either payment.

How soon will I receive my stimulus payment?

Your next question is probably, “When will I see the money?” That’s where the good news comes in. As soon as the President signs the bill, payments can begin being issued. According to Treasury Secretary Steven Mnuchin, “People are going to see this money at the beginning of next week.”

As with the previous stimulus check, though, your payment turnaround will depend on the payment information the IRS has for you. For the fastest payment, you’ll need to have direct deposit set up. If the IRS doesn’t have your banking information, your payment likely won’t come until after the first of the year. Even then, though, Mnuchin doesn’t expect paper checks or prepaid cards to take as long as they did with the first round.

Will I still get a check if I didn’t file a 2019 tax return?

As with the first round of stimulus payments, the second round will go to both filers and non-filers. As with the first stimulus payment, those who receive Social Security will be automatically issued a stimulus payment. Things get a little more complicated for those who don’t pay taxes.

One thing that’s changed with the second payment is that the IRS won’t consult your 2018 tax return if you didn’t file for 2019. However, the bill has expanded the sources the government can use to issue your payment. Instead of being limited to the Social Security Administration and your tax records, the IRS can now pull information from the Social Security Administration, Railroad Retirement Board, or Department of Veterans Affairs.

Is it taxable?

As with the first stimulus payment, the second one will not be taxable. It’s a tax credit, paid in advance, and it has no impact whatsoever on your tax refund. You’ll include it on your tax return, but it won’t be counted as part of your yearly income. You’ll also get the full amount of any refund you’re due next year regardless of whether you received a stimulus payment or not.

Will part or all of my payment be used to settle debts?

Are You Expecting A Second Stimulus Check? You May Have To Wait - If approved, when can Americans expect to see the second round of stimulus checks?

This is where the second payout differs from the first. This new bill specifically states that the funds can’t be garnished by creditors or debt collectors. As before, your payment can’t be held to pay government debts, including past-due taxes.

But what if you owe back child support? Unlike the first round, the second stimulus check can’t be held to pay past-due child support. The first stimulus payment didn’t have that protection.

What if my spouse doesn’t have a Social Security number?

The first payment went only to those who had a Social Security number. This affected spouses who filed jointly with those people. With this second payment, if you’re married and have a Social Security number, you’ll receive a payment even if your spouse doesn’t have one. You’ll also qualify for your under-17 dependent child to get a payment, even if only one spouse has a Social Security number.

This change doesn’t just apply to the second payment, though. If you’re married and one of you has a Social Security number, that person will be able to get the amount of the first credit retroactively. Simply apply for $1,200, plus $500 per qualifying child, as a recovery rebate when you file your 2020 taxes. 

What if I’m unemployed? Does the stimulus package include funding for expanded unemployment insurance?

If you’re unemployed, the package includes a little extra relief for you. You may qualify for $300 extra every week in extra unemployment. These benefits will be for 11 weeks, running from December 26th to March 14th. The Pandemic Unemployment Assistance program for freelancers and any state-specific benefits are also extended under the bill.

Another item in the bill that’s bringing sighs of relief is the expansion of the eviction moratorium. The original protections were set to expire on December 31st, which could have left millions at risk for homelessness. Unlike the unemployment extension, though, the eviction moratorium only lasts through the end of January. 

Does the bill include protections for small business owners?

Small businesses have been hit pretty hard by COVID-19, and this bill seeks to help a little. The new bill includes $284 billion for small business loans under the Paycheck Protection Program, which expired in August. The bill expands that program with some changes.

One of the biggest changes is that this new bill targets smaller businesses. To qualify, a small business must have fewer than 300 employees. A business must also have seen at least a 25% reduction in revenues during at least one quarter in 2020.

What else is included in the bill?

In addition to extending the moratorium on evictions, the new bill also includes $25 billion for tenants who are having a tough time paying rent. Those receiving benefits under the Supplemental Nutrition Assistance Program (SNAP) will see benefits expanded by 15% for four months.

The bill also includes $69 billion in funding to get the vaccine to the public. This funding will be provided to state, tribal, and local governments to help cover the cost of distributing and administering the vaccine. 


Although the bill is available to read, the IRS will likely provide more information on when the funds will be available. Watch the IRS Coronavirus Tax Relief and Economic Impact Payments news page for the latest information.

In the meantime, check out this list of side hustles so you can make some extra money while you’re waiting on your stimulus check. This way, you can in effect, create your own stimulus.

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About the author

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Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a writer for a credit card processing service and has written about finance for numerous marketing firms and entrepreneurs. Her work has appeared on Retirable, The Motley Fool, MoneyGeek, Ecommerce Insiders, GoBankingRates, and ThriveBy30. Learn more about Stephanie on her website or find her on LinkedIn, Facebook, or Twitter.