New Coronavirus Relief Package: What Does it Mean for You and a Second Stimulus Check

Tax News A new coronavirus relief package was passed by Congress. Here is what the pending legislation could mean for you and your second stimulus payment.

A second stimulus is coming for millions of Americans.

The Coronavirus Response and Relief Supplemental Appropriations Act of 2021 – a $900B relief package to deliver the second round of economic stimulus for individuals, families, and businesses was signed into law December 27, 2020. The bill provides relief through multiple measures and expands many of the provisions already put into place under the CARES Act, including a second round of direct stimulus payments to individuals and families.

Here is what relief is included:

Stimulus Payments for Individuals and Joint Taxpayers

A second wave of direct stimulus payments for millions of Americans – up to $600 for eligible individuals, $1,200 for joint taxpayers, and an additional $600 for each dependent child under 17 – is on the way for millions. This means a family with two children could receive $2,400.

There is nothing you need to do to get a stimulus payment. The IRS has begun to issue stimulus payments using the most recent information they have on file, likely from your 2019 tax return, either by direct deposit or by check.

As part of the income tax filing, the IRS receives accurate banking information for all TurboTax filers who receive a tax refund, which the IRS is able to use to deposit stimulus payments. For up to date information on your stimulus payment, visit the IRS Get My Payment tool.

So, how do you know if you may be eligible to receive a second stimulus payment?

If you have an adjusted gross income (AGI) of up to $75,000 ($150,000 married filing jointly), you could be eligible for the full amount of the recovery rebate.

*Note, adjusted gross income (AGI) is your gross income like wages, salaries, or interest minus adjustments for eligible deductions like student loan interest or your IRA deduction. Your AGI can be found on line 8b of your 2019 Form 1040.

As your AGI increases over $75,000 ($150,000 married filing jointly), the stimulus amount will  go down. The stimulus check rebate will completely phase out at $87,000 for single filers with no qualifying dependents and $174,000 for those married filing jointly with no dependents. 

The bill also expands stimulus payments to mixed-status households (households with different immigration and citizenship statuses), meaning more households may be eligible for this stimulus than were for the first round. This may be retroactive, so some individuals that were ineligible for the first stimulus, provided under the CARES Act, may then be eligible to receive that payment as well.  

*Note, if you think you may have been eligible for the first stimulus, but didn’t receive it, don’t worry. TurboTax will help you claim your stimulus payment in the form of a recovery rebate credit when you file your 2020 tax return.

Those people receiving Social Security retirement, disability, Railroad Retirement, VA, or SSI income and are not typically required to file a tax return, will again receive a stimulus payment. As in the first round, the IRS would use the information from your Form SSA-1099, Form RRB-1099, or the Veterans Administration to generate your stimulus payment.

Why haven’t I received my stimulus payment yet?

Unfortunately, because of an IRS error, millions of payments were sent to the wrong accounts and some may not have received their stimulus payment.  

We have been working tirelessly with the Treasury and IRS to get stimulus payments to our customers. We know how important these funds are for so many Americans and we regret that an IRS error caused a delay.

UPDATE – January 8th

We are happy to share that stimulus payments will begin to be deposited on January 8th for millions of our customers affected by the IRS error. We expect most of these payments to be available that day, but banks could take a few business days to process. Payment will be deposited into the same bank account that customers received their 2019 tax refund.

Customers receiving a stimulus payment will receive an email from TurboTax informing them of the deposit. We will have more emails going out in the coming days – so if you did not receive one on January 8th, it could still be coming. 

We appreciate your patience as these payments are processed. This update may not immediately be reflected in the IRS Get My Payment tool.

For more information, visit “Where’s My Second Stimulus Check?” article.

Extended Unemployment

Unemployment payments will increase by $300 per week and the benefits will be extended until March 14, 2021.

The bill also extends the Pandemic Unemployment Assistance (PUA), which expands unemployment to those who are not usually eligible for regular unemployment insurance benefits. This means that self-employed, freelancers, and side giggers will continue to be eligible for unemployment benefits.

Certain workers who have at least $5,000 per year in self-employment income, but are disqualified from receiving Pandemic Unemployment Assistance because they also have an employer could also be eligible for an additional $100 per week in unemployment benefits.

For more information on what the new coronavirus relief package means for the unemployed, visit our blog post here.

Special Lookback for Earned Income Tax Credit and the Child Tax Credit

This is a very important provision which has the potential to help workers who experienced lower income in 2020, or received unemployment income in lieu of their regular wages, get bigger tax credits and larger refunds in the coming year.  

The special lookback rule will allow lower income individuals to use their earned income from 2019 to determine their Earned Income Tax Credit and the refundable portion of the Child Tax Credit in 2020, since their lower 2020 income could reduce the amount they are eligible for. 

The Earned Income Tax Credit is the country’s largest program for working people with low to moderate income. More than 25 million eligible tax filers received federal Earned Income Tax Credit last tax season and the average Earned Income Tax Credit was $2,476 per filer.

Expanded Paycheck Protection Program (PPP) for Small Businesses and Eligible Non-Profits

The Emergency Coronavirus Relief Act of 2020, provides a second round of payments under the Paycheck Protection Program. 

Self-employed individuals, small businesses, small 501(c)(6) organizations, restaurants, live venues, and EIDL grants will  again be eligible. Also, businesses experiencing severe revenue reductions will have the opportunity to apply for a second PPP loan.

Businesses with 300 or fewer employees that have experienced 25% revenue loss in any 2020 quarter and small 501(c)(6) organizations that have 150 employees or fewer would be eligible for a Paycheck Protection Program under the COVID-19 Emergency Relief Package.  

The expanded Paycheck Protection Program, also broadens the type of business expenses that can be forgiven under the loan to include supplier costs, will allow business expenses paid utilizing PPP proceeds to be tax deductible, and would simplify the loan forgiveness process.

Contractor Paid Leave

Contractors who were temporarily unable to work due to facility closures and other restrictions could be able to receive reimbursement for paid leave from federal agencies.

Eviction Moratorium and Rental Assistance

The Coronavirus Response and Relief Supplemental Appropriations Act of 2021 extends the moratorium on evictions under the CARES Act, designed to protect renters from eviction, until January 31, 2021.

Families struggling to pay rent or with past due rent could  be able to get assistance with paying past due rent, future rent payments, as well as utility bills.

Tax Extenders

The bill includes the permanent passage and, in some cases, multi-year extension of many additional tax provisions – commonly referred to as tax extenders. Tax Extenders provide tax relief and support for families and individuals through various mortgage relief, education and medical expense relief. Check back here for more details.

TurboTax Has You Covered

Don’t worry about knowing these tax provisions. TurboTax is here for you and will continue to keep you updated on coronavirus relief as more details and guidance come out. Be sure to check back with the TurboTax Blog and our TurboTax Coronavirus Tax Center for the latest information.

Comments (52) Leave your comment

  1. I just to say THANK YOU for your tireless work in repairing the error with the stimulus. I received mine today and it means a lot seeing you really help! Thank you!

  2. Thanks, TurboTax for correcting the IRS screwup. Received my Stimulus payment this afternoon.
    – – A nine year TurboTax customer

  3. When am I going to get my second stimulus check. I have not received an email from you saying my check is coming. What’s up??

  4. Is it true that are checks was sent to a Turbo Tax bank account if we filed with you’ll. If so how do we fix it or do we have to file it on our 2020 tax return?

  5. Hello. I have filed my taxes with you for the past three years with NO changes to my banking information. I’m getting the error message that my second stimulus update is unavailable and I don’t understand why! I know I qualify and with people in dire need of this assistance, how does it help to have to wait to file taxes which cannot be done until the end of the month should all of the paperwork needed to do so, be available as mail is substantially delayed right now?

  6. everyone wants to know where their stimulus payment will be delivered or how it is to be delivered, but. no one wants to know how it will impact their income taxes. I would like to know how the stimulus checks will affect my taxes. Do we have to declare them as income and if so how will they be taxed?

    1. Hi,
      The Economic Impact Payments, also known as stimulus payments (both the first and second) are an advance rebate and are not considered taxable income. Also, if you receive too little based on your 2020 income you may be able to claim more when you file your 2020 taxes in the form of a recovery rebate credit. If you received too much per the IRS you don’t have to pay it back.

      TurboTax will guide you through stimulus and claiming the recovery rebate credit if you are eligible.

      I hope this helps.
      Best,
      Lisa Greene-Lewis

    1. Hi Beth,
      Under the CARES Act, if you made a coronavirus related withdrawal, meaning you were impacted by coronavirus then the 10% early withdrawal penalty may be waived on withdrawals up to $100,000. You may qualify for a coronavirus related withdrawl if:
      – You, your spouse, or dependent were diagnosed with the virus
      – You experienced adverse financial consequences due to being quarantined, furloughed, laid off, or work hours reduced, closing or reducing hours of your own business, or lack of child care.

      I hope this helps you!
      Best,
      Lisa Greene-Lewis

  7. I’m curious about co-parenting and how the stimulus money is supposed to be divided if the parents alternate each year for claiming the child as their dependent. The parent that claimed the child on 2019 taxes has received both stimulus relief checks and has not split this with the other parent in which they share joint custody with. The other parent will claim the child in 2020. How will this affect the parent claiming the child in 2020? Also, is the parent that received the stimulus money supposed to split the amount with the other parent.

    Thank you.

    1. Hi Carla,
      The IRS is responsible for determining taxpayer eligibility for receiving a stimulus and, if a taxpayer is eligible, how and when the stimulus payments will be delivered to them. According to the IRS, they will issue payments using the most recent information they have on file, likely from your 2019 tax return. If one parent already received a full stimulus payment for their qualifying child under 17 then the other parent most likely would not be able to get another stimulus payment if they claim the same child for 2020.

      If you received a stimulus payment for your self remember that if you didn’t receive the full stimulus payment amount, you may be able to claim the stimulus in the form of a recovery rebate credit when you file your 2020 taxes.

      TurboTax will guide you through claiming the recovery rebate credit to make sure you get every dollar you deserve.

      Best,
      Lisa Greene-Lewis

  8. I have 2 dependents living at home. When the first stimulus check was sent out my daughter was 17, my second daughter was 9. Now they are 18 and 10. The first stimulus didn’t pay anything for my 17 year old which I didn’t understand because she is still in school and doesn’t work and I get no assistance for her. Now that she’s 18, she’s a senior in high school and I’m curious if the same crazy rule applies for her this time or is there something I could’ve done to receive that stimulus payment for her to help offset additional expenses.

    Thank you for your help!
    Kristin

    1. Hi Kristin,
      Under the CARES Act one of the requirements to receive the additional $500 for your child is they have to be under 17 to be considered a qualifying child. The same will apply for the second stimulus payment under the new coronavirus relief package.
      I hope this helps.

      Best,
      Lisa Greene-Lewis

    1. Hi Dana,
      If you have your Turbo card, you can use it anywhere Visa debit is accepted in the U.S. You can also withdraw your stimulus money at more than 19,000 fee-free ATMs across all 50 states.

      We expect stimulus payments will be delivered within a couple of weeks. We’ll update when more information is available.

      I hope this helps!
      Best,
      Lisa Greene-Lewis

  9. So just to understand the stimulus is money we do not have to pay back to the government and will not effect our tax refund correct? And also do we need to mention the stimulus when filing our tax ?

    1. Hi Taha,
      The Economic Impact Payments, also known as stimulus payments (both the first and second) are an advance rebate and are not considered taxable income. Also, if you receive too little based on your 2020 income you may be able to claim more when you file your 2020 taxes in the form of a recovery rebate credit. If you received too much per the IRS you don’t have to pay it back. If you did not receive the full stimulus payments and can claim a recovery rebate credit, generally the recovery rebate credit can increase your refund or lower what you owe.

      If you received the full stimulus payments you don’t need to mention stimulus when filing your 2020 taxes, but if you didn’t receive the full amount TurboTax will guide you through stimulus payments and claiming the recovery rebate credit if you are eligible.

      I hope this helps you!

      Best,
      Lisa Greene-Lewis

  10. Hi there! My question is,
    – According to my 2019 taxes, I was 23 and a dependent. I am NOW 24 and married (as of, 04/20 – 24 yrs old and as of October 2nd 2020 – marriage). Will I receive any type of stimulus immediately like most, will turbo tax catch on that I should receive it and do that retroactive thing, or will I most likely receive nothing ?

    Thanks so much!
    Many blessings,
    Lexi P

    1. Hi Alexis,

      The IRS is responsible for determining taxpayer eligibility for receiving a stimulus and, if a taxpayer is eligible, how and when the stimulus payments will be delivered to them. According to the IRS, they will issue payments using the most recent information they have on file, likely from your 2019 tax return. Therefore stimulus payments will likely not include a payment for a child born in 2020.

      When you file your 2020 taxes you can claim the stimulus in the form of a recovery rebate credit.

      TurboTax will guide you through claiming the recovery rebate credit to make sure you get every dollar you deserve.

      Hope this helps.

      Sincerely,
      Katharina Reekmans

    1. Hi Carla,

      We do not expect a way for you to update your bank account with the IRS for this round of stimulus payments.

      If your bank information is invalid or the bank account has been closed, the bank will reject the deposit and the IRS will mail your payment to the most recent address they have on file. Typically, once the payment is mailed, it will take up to 14 days to receive the payment, standard mailing time.

      If you received your refund on a Turbo Card, this stimulus payment may also go to the same account.

      You will be able to check the status of your stimulus check at the IRS Get My Payment tool.

      Hope this Helps!

      Sincerely,
      Katharina Reekmans

  11. My son never received the first one. He called the IRS and they said they would look into it. That’s as far as it went.
    Question….. is this stimulus money taxable on our income tax return?

    1. Hi Barbara,

      The Economic Impact Payments (both the first and second) are not considered income, and therefore are not taxable.

      There is however, a special temporary rule allowing individuals to use their earned income from tax year 2019 to determine their eligibility and amount of Earned Income Tax Credit and the refundable portion of the Child Tax Credit (i.e., the Additional Child Tax Credit) in the 2020 tax year. TurboTax will help you to do this when you file your 2020 tax return this year.

      If your son didn’t receive the correct amount of stimulus payment and was not claimed as a dependent, he may be able to claim a Recovery Rebate Credit when he files his 2020 taxes. TurboTax will guide him through this to make sure he gets every dollar he deserves.

      Hope this helps!

      Thanks,
      Katharina Reekmans

  12. Hello, we have another dependent as of July 22, 2020. Are we eligible to receive an additional $600? I started my 2020 Taxes and added a dependent but I don’t think the IRS will know until I file in February 2021…

    1. Hi Mia,
      The IRS is responsible for determining taxpayer eligibility for receiving a stimulus and, if a taxpayer is eligible, how and when the stimulus payments will be delivered to them. According to the IRS, they will issue payments using the most recent information they have on file, likely from your 2019 tax return. Therefore stimulus payments will likely not include a payment for a child born in 2020.

      If you don’t receive the additional $600 for your qualifying child you had this year, you can claim the $600 in the form of a recovery rebate credit when you file your 2020 taxes. TurboTax will guide you through claiming the recovery rebate credit when you file.

      Hope this helps!

      Sincerely,
      Katharina Reekmans

    1. Hi Kimberly,

      We do not expect a way for you to update your bank account with the IRS for this round of stimulus payments.

      If your bank information is invalid or the bank account has been closed, the bank will reject the deposit and the IRS will mail your payment to the most recent address they have on file. Typically, once the payment is mailed, it will take up to 14 days to receive the payment, standard mailing time.

      If you received your refund on a Turbo Card, this stimulus payment may also go to the same account.

      You will be able to check the status of your stimulus check at the IRS Get My Payment tool.

      Hope this helps!

      Sincerely,
      Katharina Reekmans

    1. Hi Shayley,

      The Economic Impact Payments, also known as stimulus payments (both the first and second) are an advance rebate and are not considered taxable income. Also, if you receive too little based on your 2020 income you may be able to claim more when you file your 2020 taxes in the form of a recovery rebate credit. If you received too much per the IRS you don’t have to pay it back.

      TurboTax will guide you through claiming the recovery rebate credit if you are eligible.

      Hope this helps!

      Thanks,
      Katharina Reekmans

    1. Hi Eric!
      The Economic Impact Payments, also known as stimulus payments (both the first and second) are an advance rebate and are not considered taxable income. Also, if you receive too little based on your 2020 income you may be able to claim more when you file your 2020 taxes in the form of a recovery rebate credit. If you received too much per the IRS you don’t have to pay it back.

      TurboTax will guide you through claiming the recovery rebate credit if you are eligible.

      Hope this helps!

      Thanks,
      Katharina Reekmans

  13. Hi. For the 2nd stimulus payment will TurboTax help us claim the full payment in the form of a recovery rebate credit as it does for the first one under the Cares Act. My 2020 AGI is below the threshold requirement due to the pandemic. 2019 was not. Thanks, Kevin

  14. Hello, If someone claim their parent, can that parent apply to get a stimulus check? They don’t do taxes because they falls under the taxes of their child’s household.

    1. Hi Jay,

      If you claim your parent as a dependent, as it pertains to the stimulus payments they do not qualify for an additional payment. The IRS is responsible for determining taxpayer eligibility for receiving a stimulus and, if a taxpayer is eligible, how and when the stimulus payments will be delivered to them. The dependent rules for the stimulus are for dependents under age 17.

      Besides meeting the income requirements

      Generally, you are eligible to claim the Recovery Rebate Credit if you:
      Were a U.S. citizen or U.S. resident alien in 2020
      Were not claimed as a dependent
      Have a social security number valid for employment that is issued before the due date of your 2020 tax return.

      Hope this helps.
      Thanks,
      Katharina Reekmans

  15. Hi Lisa, thank you for the great article, I have a question regarding the tax treatment for the IRA withdrawal during 2020, is there anyway to avoid or reduce penalty if income was not reduced?

    1. Hi Alfred,
      Under the CARES Act, if you made a coronavirus related withdrawal, meaning you were impacted by coronavirus then the 10% early withdrawal penalty may be waived on withdrawals up to $100,000

      Hope this helps!

      Sincerely,
      Katharina Reekmans

  16. I have a college-aged son who I claimed on my 2019 taxes. I did not receive the stimulus due to income. If I don’t claim my son on my 2020 taxes, will he be able to get either stimulus 1or2 or both by filing a recovery rebate on his 2020 taxes?

    1. Hi Michelle,
      Generally, if your son plans to file his own tax return for tax year 2020 and is not claimed as a dependent he may qualify and receive the stimulus in the form of a recovery rebate credit.

      Hope this helps.

      Sincerely,
      Katharina Reekmans

  17. Hi! Thank you for the information. My son was a dependent on our 2019 tax return as a senior in college. He did not file a tax return that year. However in May of 2020 he graduated and began working fulltime in June. He is 23 years old and is not a dependent on our 2020 tax return we will file. Does he have any recourse to claim the stimulus checks for 2020? Thank you for any advice.
    Michelle E

    1. Hi Michelle,

      Generally, if your son plans to file his own tax return for tax year 2020 and is not claimed as a dependent he may qualify and receive the stimulus in the form of a recovery rebate credit.

      Hope this helps!
      Sincerely,
      Katharina Reekmans

    1. Hi Antone,

      If you have your Turbo card, you can use it anywhere Visa debit is accepted in the U.S. You can also withdraw your stimulus money at more than 19,000 fee-free ATMs across all 50 states.

      We expect stimulus payments will be delivered within a couple of weeks. We’ll update when more information is available.

      Hope this helps.
      Sincerely,
      Katharina Reekmans

  18. I was required to take a 25% pay cut for a couple of months this year and did not have a part-time job, thus reducing my income in 2020. My 2019 tax return does not reflect that loss. So frustrating. I see that there may be a way to retroactively claim the stimulus money. Where can I learn more about that?

    1. Hi Allyson,

      I understand this can feel frustrating but TurboTax is here to help.

      If you didn’t receive the correct amount of stimulus payment, you can claim a Recovery Rebate Credit when you file your 2020 taxes. TurboTax will guide you through this to make sure you get every dollar you deserve.

      Hope this helps!
      Sincerely,
      Katharina Reekmans

  19. Informative article…a 2019 tax return has not been processed by IRS 8 months waiting. After many inquiries, still no information (includes EIC/CTC Form 1040). Can I expect the new stimulus check without delay?

    1. Hi Denise,
      First I would make sure that the IRS received your tax return if you e-filed. If the IRS does not confirm receipt, I would send your return certified return with a signature. Regarding the second stimulus the IRS will go by the latest filing, so your 2018 tax filing information. If you don’t receive the second stimulus you can claim it on your 2020 tax return in the form of a recovery rebate credit.
      I hope this helps you.
      Best,
      Lisa Greene-Lewis

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