COVID-19 and Stimulus Payments to Individuals: Summary of the 2020 Recovery Rebates in H.R. 748 (IN11282, Version 1)
Summary
Insight IN11282, Version 1, of the Congressional Research Service by Margot L. Crandall-Hollick, dated March 26, 2020, on the 2020 recovery rebates proposed in H.R. 748, which passed the Senate on March 25, intended to broadly stimulate the economy. The rebates equal $1,200 per person ($2,400 for married taxpayers filing a joint return) and $500 per child, phasing out at 5% of adjusted gross income above $75,000 ($112,500 for head of household filers and $150,000 for married joint returns). They are structured as tax credits automatically advanced in 2020 based on 2019 returns, paid by direct deposit or check.
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 Stimulus Payments to
Individuals: Summary of the 2020 Recovery
Rebates in H.R. 748
Margot L. Crandall-Hollick
Acting Section Research Manager
March 26, 2020
H.R. 748, which passed in the Senate on March 25, proposes direct payments intended to broadly
stimulate the economy in response to concerns about an economic slowdown stemming from the COVID-
19 pandemic. This Insight provides a brief overview of the proposed 2020 recovery rebates included in
H.R. 748. These payments are virtually identical to those included in bill text circulated on March 22,
2020.
The proposed 2020 recovery rebates equal $1,200 per person ($2,400 for married taxpayers filing a joint
tax return) and $500 per child. These amounts would phase down for higher-income taxpayers. These
payments are structured as tax credits automatically advanced to households in 2020 if they filed a 2019
income tax return and would be received as a direct deposit or check by mail. If a 2019 return had not
been filed, rebates would be advanced automatically based on 2018 return information. Social Security
and Railroad Retirement recipients who did not file an income tax return would have the credit
automatically advanced in 2020 based on information on their 2019 Social Security or Railroad
Retirement Benefit Statement.
Credit Amount
The proposed credit equals $1,200 per person ($2,400 for married joint filers) for eligible individuals.
Generally, an eligible individual is any individual excluding (1) nonresident aliens, (2) individuals who
can be claimed as a dependent by another taxpayer, and (3) an estate or trust.
Individuals eligible for the credit would receive an additional $500 for each child that qualifies for the
child tax credit—generally a taxpayer’s dependent child that is aged 16 or younger.
Congressional Research Service
7-....
www.crs.gov
IN11282
CRS INSIGHT
Prepared for Members and
Committees of Congress
Congressional Research Service 2
The total proposed credit phases out at a rate of 5% of adjusted gross income (AGI) above $75,000
($112,500 for head of household filers and $150,000 for married joint returns). An illustration of the
amount of the rebate by income level is provided in the figure below.
As with any tax refund, these payments would not count as income or resources for a 12-month period in
determining eligibility for, or the amount of assistance provided by, any federally funded public benefit
program. In addition, these payments would not be taxable.
The proposed credit would be a fixed amount until income reaches the phaseout level. Lower-income
taxpayers with little or no income tax liability would be eligible for a tax credit equal in dollar value to
that received by middle-income and upper-middle-income taxpayers. Hence, as a percentage of income,
this rebate would be largest for the lowest-income recipients. The tax credit would phase out at the upper
end of the distribution as shown in the figure above.
Estimates by the Congressional Research Service and the Tax Policy Center suggest these payments
would provide significant benefits to eligible low- and middle-income households.
Other Features of the Proposed 2020 Recovery Rebates
SSN Requirement: Taxpayers would be required to provide a Social Security number
(SSN) for themselves, their spouse (if married filing jointly), and any child for whom
they claim the $500 child credit. Adoption taxpayer ID numbers (ATINs) are also
acceptable for adopted children. Taxpayers who provide an individual taxpayer
identification number (ITIN) would be ineligible for the credit. Hence, married couples in
Congressional Research Service 3
which one spouse has an SSN and another has an ITIN would generally be ineligible for
the credit.
The bill would relax these ID requirements for married joint filers in which at least
one spouse is a member of the Armed Forces. In those cases, only one spouse must
provide an SSN.
Public Awareness Campaign: The bill would instruct the Treasury Secretary, in
coordination with the Commissioner of Social Security and the heads of other relevant
federal agencies, to provide information about the payment to individuals who may not
have filed a 2019 or 2018 income tax return.
Notice to Taxpayers: The bill would require that individuals identified as eligible to
receive a payment be sent a notice that provides them with information on the amount of
the payment, how it will be delivered (direct deposit/paper check), and a phone number at
the Internal Revenue Service (IRS) to call if the payment is not received.
Nonresident Aliens: The credit would not be available to nonresident aliens.
Territories: The bill includes a provision requiring the U.S. Treasury to make payments
to individuals in the territories (mirror code and non-mirror code) equal to the aggregate
amount of credits claimed by their residents.
Past-Due Debts: The credit cannot be reduced for certain unpaid debts, including debts
owed to a federal agency (excluding child support), past-due state income taxes, federal
taxes, or unemployment compensation debts.
Appropriations: The bill would appropriate $617.35 million in FY2020 for the
administration of these payments.
Advancing the Proposed 2020 Recovery Rebates
The bill would automatically advance the credit, which would be received as a direct deposit or a check
by mail. The advancing provision would allow taxpayers to receive this credit before 2020 tax returns are
filed in early 2021.
The advanced credit amount would be estimated by the IRS based on taxpayers’ 2019 income tax return
information (if the taxpayer did not file a 2019 income tax return, 2018 income tax return information
could be used instead). For Social Security and Railroad Retirement recipients, if neither a 2019 nor a
2018 income tax return were filed, then information from their 2019 Social Security or Railroad
Retirement Benefit Statement (SSA-1099 or RRB-1099, respectively) could be used instead. To expedite
payments, the bill would allow the recovery rebates to be delivered electronically to any account which
the taxpayer had authorized to receive a tax refund or other federal payment on or after January 1, 2018.
Otherwise, paper checks would be issued.
If, when taxpayers file their 2020 income tax returns in 2021, they find that the advanced credit is greater
than the actual credit, then they would not be required to repay the excess credit. In contrast, if the
advanced credit is less than the actual credit, then taxpayers would be able to claim the difference on their
2020 income tax returns.
Nonfilers
Taxpayers with gross income less than the standard deduction amount are not required to file a federal
income tax return. In general, public cash assistance for low-income populations, such as Supplemental
Security Income, is not considered gross income under a limited general welfare exclusion. Hence, many
low-income individuals and families whose income is largely from public assistance may not have filed a
Congressional Research Service 4
2018 or 2019 income tax return and as such, would not receive these rebates in 2020. A 2017 study found
that “nonfilers” were more likely to be either seniors or recipients of public assistance compared to those
who filed a tax return.
IN11282 · VERSION 1 · NEW
EveryCRSReport.com
The Congressional Research Service (CRS) is a federal legislative branch agency, housed inside the
Library of Congress, charged with providing the United States Congress non-partisan advice on
issues that may come before Congress.
EveryCRSReport.com republishes CRS reports that are available to all Congressional staff. The
reports are not classified, and Members of Congress routinely make individual reports available to
the public.
Prior to our republication, we redacted phone numbers and email addresses of analysts who
produced the reports. We also added this page to the report. We have not intentionally made any
other changes to any report published on EveryCRSReport.com.
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 permission of the copyright holder if you wish to copy or
otherwise use copyrighted material.
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' institutional role.
EveryCRSReport.com is not a government website and is not affiliated with CRS. We do not claim
copyright on any CRS report we have republished.
File and source
- File
- IN11282.621030.pdf
- Size
- 726,756 bytes
- SHA-256
- 7ef5283ea190035986564b1c7aa1868926909f6307614a2b5e978ff46b6fc28d
- Our copy
- IN11282.621030.pdf
- Original
- www.everycrsreport.com