COVID-19 and Direct Payments: Comparison of First and Second Round of “Stimulus Checks” to a Proposed Third Round in the American Rescue Plan Act of 2021 (ARPA; H.R. 1319) (IN11605, Version 6, Updated March 8, 2021)

Summary

Insight IN11605, Version 6, of the Congressional Research Service, updated March 8, 2021, comparing the first and second rounds of direct payments, or stimulus checks, with the proposed third round in the American Rescue Plan Act of 2021 (H.R. 1319, as amended), passed by the Senate on March 6, 2021. It notes that the House version passed on February 27, 2021 had different phaseouts. Under the Senate version the payment phases out between $75,000 and $80,000 for singles, $112,500 and $120,000 for heads of households and $150,000 and $160,000 for married joint filers.

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INSIGHTi

COVID-19 and Direct Payments:
Comparison of First and Second Round of
“Stimulus Checks” to a Proposed Third
Round in the American Rescue Plan Act of
2021 (ARPA; H.R. 1319)
Updated March 8, 2021
On March 6, 2021, the Senate passed the American Rescue Plan Act of 2021 (ARPA; H.R. 1319, as
amended), which includes a third round of direct payments (often referred to as “stimulus checks”). (A
similar proposal for a third round of payments passed the House on February 27, 2021. That version had
different phaseouts from the Senate version discussed in this Insight.) A first round of direct payments
was enacted in the CARES Act (P.L. 116-136) in March 2020. The second round of direct payments was
enacted in the Consolidated Appropriations Act, 2021 (P.L. 116-260) in December 2020.
This Insight compares some of the major aspects of the proposed third round of direct payments to the
first and second rounds. A summary of the proposed third round of direct payments can be found here.

Table 1. Major Provisions of First, Second, and Proposed Third Round of Direct Payments
First Round of Direct Payments Second Round of Direct Proposed Third Round of
(CARES Act | P.L. 116-136, as Payments Direct Payments in H.R.
amended)a (P.L. 116-260) 1319

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:

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IN11605

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First Round of Direct Payments Second Round of Direct Proposed Third Round of
(CARES Act | P.L. 116-136, as Payments Direct Payments in H.R.
amended)a (P.L. 116-260) 1319

$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
would result 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
Certain certain Department of Veterans was directed to issue payments would be given broad authority
Households Not Affairs (VA) benefits, Treasury based on information provided by to make payments based on
Required to File a generally issued payments based on the Social Security Administration information available to the
Tax Return their 2019 annual benefit statements (SSA), Railroad Retirement Board, Treasury.
(“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 on the applicable tax return.
Congressional Research Service 3

First Round of Direct Payments Second Round of Direct Proposed Third Round of
(CARES Act | P.L. 116-136, as Payments Direct Payments in H.R.
amended)a (P.L. 116-260) 1319
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
Treasury may offset the amount of the Return: Same as first round. Return: Same as first round
direct payment that the taxpayer (applicable benefit claimed on
claims as a credit on their 2020 2021 return).
income tax returns.
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
FY2020-FY2030 FY2021-FY2030 e FY2021-FY2031

Source: CRS analysis of P.L. 116-260; P.L. 116-136; H.R. 1319; and JCX-11R-20, JCX-24-20, JCX-13-21.
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. 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.

Author Information

Margot L. Crandall-Hollick
Acting Section Research Manager
Congressional Research Service 4

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IN11605 · VERSION 6 · UPDATED

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