Congressional Research Service IN11605.8 (COVID-19 and Direct Payments: Comparison of First and Second Round of “Stimulus Checks” to the Third Round in the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2))

Summary

A Congressional Research Service Insight, IN11605 (version 8), updated March 25, 2021, comparing the third round of direct payments in the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2) with the first round in the CARES Act (P.L. 116-136) in March 2020 and the second round in the Consolidated Appropriations Act, 2021 (P.L. 116-260) in December 2020. It compares some of the major aspects of the three rounds. Its table of major provisions lists payment amounts of $1,200 per eligible individual ($2,400 for married joint filers) in the first round, $600 ($1,200) in the second and $1,400 ($2,800) in the third, along with other features of each round.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

INSIGHTi

COVID-19 and Direct Payments:
Comparison of First and Second Round of
“Stimulus Checks” to the Third Round in the
American Rescue Plan Act of 2021 (ARPA;
P.L. 117-2)
Updated March 25, 2021
The American Rescue Plan Act of 2021 (ARPA; P.L. 117-2) includes a third round of direct payments
(often referred to as “stimulus checks”). A first round of direct payments was included in the CARES Act
(P.L. 116-136) in March 2020. A second round of direct payments was included in the Consolidated
Appropriations Act, 2021 (P.L. 116-260) in December 2020.
This Insight compares some of the major aspects of the third round of direct payments to the first and
second rounds. A summary of the third round of direct payments can be found here.

Table 1. Major Provisions of First, Second, and Third Round of Direct Payments
First Round of Direct Payments Second Round of Direct Third Round of Direct
(CARES Act | P.L. 116-136, as Payments Payments (ARPA; P.L. 117-
amended)a (P.L. 116-260) 2)

Payment amount $1,200 per eligible individual $600 per eligible individual $1,400 per eligible individual
$2,400 for married joint filers $1,200 for married joint filers $2,800 for married joint filers
Additional $500 for each qualifying Additional $600 for each Additional $1,400 for each
child (i.e., dependent child under 17 qualifying child (i.e., dependent dependent (including older
years old as defined for the child child under 17 years old as children and adult dependents).
credit). defined for the child credit).

Phaseout Total payment amount phased out by Same as first round Total payment phases out
5% of adjusted gross income over ratably between following
thresholds: income levels:

Congressional Research Service
https://crsreports.congress.gov
IN11605

CRS INSIGHT
Prepared for Members and
Committees of Congress
Congressional Research Service 2

First Round of Direct Payments Second Round of Direct Third Round of Direct
(CARES Act | P.L. 116-136, as Payments Payments (ARPA; P.L. 117-
amended)a (P.L. 116-260) 2)

$75,000 singles (S) $75,000-$80,000 S
$112,500 heads of households (HOH) $112,500-$120,000 HOH
$150,000 married filing jointly (MFJ) $150,000-$160,000 MFJ

Eligibility Everyone except:b Everyone except :b Everyone except :b
 Nonresident aliens  Nonresident aliens  Nonresident aliens
 Dependents of other taxpayers  Dependents of other  Dependents of other
taxpayers taxpayers
 Individuals who died before  Individuals who died before
January 1, 2020 January 1, 2021

ID requirement Unmarried individuals: Eligible Same as first round Unmarried individuals: Same
individuals must have had a Social as first and second rounds.
Security number (SSN).
Married individuals: Eligible Married individuals: Same as
individuals must have had an SSN. If first and second rounds.
one otherwise eligible spouse did not
have an SSN, maximum amount halved
(i.e., $1,200 for married joint filers).
Qualifying children. If an eligible Qualifying dependent: If an
unmarried individual did not have an eligible individual does not have
SSN, or neither spouse of a married an SSN or neither spouse of a
joint filer had an SSN, the household married joint filer has an SSN,
could not receive any amount for a the household could receive any
qualifying child with an SSN.c amount for a qualifying child with
an SSN.c
Type of SSN: For all eligible Type of SSN: For all eligible
individuals and qualifying children, individuals and dependents, SSNs
SSNs must generally be associated may or may not be associated
with work authorization. with work authorization.

Automatic Payments automatically issued based Payments automatically issued Payments automatically issued
Issuance of on information from 2019 tax returns based on information from 2019 based on information from 2020
Payments to Tax or, if unavailable, 2018 returns. tax returns. tax returns or, if unavailable,
Filers 2019 returns.
If 2020 tax return information
results in a larger payment, the
IRS is directed to top-up
payments in 2021 after it
processes 2020 returns.
Automatic For eligible nonfilers who were For eligible nonfilers who were For eligible nonfilers (individuals
Issuance of recipients of Social Security, recipients of Social Security, SSI, who did not file a 2020 or 2019
Payments to Supplemental Security Income (SSI), or or certain VA benefits, Treasury income tax return), the IRS is
Certain certain Department of Veterans was directed to issue payments given broad authority to make
Households Not Affairs (VA) benefits, Treasury based on information provided by payments based on information
Required to File a generally issued payments based on the Social Security Administration available to the Treasury.
Tax Return their 2019 annual benefit statements (SSA), Railroad Retirement Board,
(“Eligible (e.g., SSA-1099 or RRB-1099). or VA (including but not limited
Nonfilers”) to annual benefit statements).d

Offset and All rounds of payments are structured as an advance of a temporary tax credit. Offset and garnishment/levy provisions
Reduction for Past- tend to differ depending on whether this benefit is received as an “advanced credit” (referred to simply as a “payment” in
this Insight) or claimed as a tax credit—the Recovery Rebate Credit—on the applicable tax return.
Congressional Research Service 3

First Round of Direct Payments Second Round of Direct Third Round of Direct
(CARES Act | P.L. 116-136, as Payments Payments (ARPA; P.L. 117-
amended)a (P.L. 116-260) 2)
Due Debts Offset of Payment: Payments could Offset of Payment: Same as Offset of Payment: Similar to
not be offset—or reduced before first round, except these payments the second round.
issuance—to satisfy certain debts also could not be offset for child
owed to governmental agencies. Such support debt.
exempt debts included tax debts,
debts owed to federal agencies, and
unemployment compensation debts,
but did not include child support debt.
Offset of Credit on Tax Return: Offset of Credit on Tax Offset of Credit on Tax
Generally, Treasury may offset the Return: Same as first round. Return: Same as first round
amount of the direct payment that the (applicable benefit claimed on
taxpayer claims as a credit on their 2021 return). (Unclear if IRS will
2020 income tax returns.e In mid- forgo offset for federal tax debt
March 2021, the IRS agreed not to for 2021 Recovery Rebate
offset the 2020 Recovery Rebate Credit.)
Credit for federal tax debts.
Garnishment: Not addressed. Garnishment: Payments would Garnishment: Not addressed.
generally be exempt from debt
collection actions, such as
garnishment or levy, which occur
after the Treasury issues the
payments. These protections only
apply insofar as the payment is
received as an advance credit.
Budgetary Cost $292.4 billion $164.1 billion $410.6 billion
FY2020-FY2030 FY2021-FY2030 f FY2021-FY2031

Source: CRS analysis of P.L. 116-136; P.L. 116-260; P.L. 117-2; and JCX-11R-20, JCX-24-20, JCX-14-21.
Notes: The second (and proposed third) round of payments are (would be) extended to the U.S. territories in a manner
similar to the first round of payments.
a. P.L. 116-260 amended ID requirements of the first round of payments, clarified issues for representative payees, and
modified provisions affecting offset of the payments when claimed as a tax credit on 2020 returns.
b. Estates and trusts are ineligible to receive the first, second, and proposed third rounds of payments.
c. Households can also receive additional amounts for qualifying children if those children have adoption taxpayer IDs
(ATINs).
d. If a direct payment for a recipient of a federal benefit program is deposited into the account of a representative payee
or fiduciary, the law explicitly states that it shall be used only for the benefit of the entitled beneficiary.
e. Change made retroactively by P.L. 116-260, Division N, Title II, Subtitle B §273(b).
f. Budgetary cost estimates reflect the score for a second round of payments only. P.L. 116-260 includes retroactive
modifications to the first round of payments, estimated to cost an additional $1.6 billion between FY2021 and
FY2030.
Congressional Research Service 4

Author Information

Margot L. Crandall-Hollick
Acting Section Research Manager

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United
States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However,
as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the
permission of the copyright holder if you wish to copy or otherwise use copyrighted material.

IN11605 · VERSION 8 · UPDATED

File and source

File: IN11605.8.pdf
Size: 725,335 bytes
SHA-256: ad285e4a7162c1338a82509111dbf41392fa9be691b38d132ecf98b6140a0c6e
Our copy: IN11605.8.pdf
Original: crsreports.congress.gov