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New stimulus check facts: What you should know about eligibility, payment size and more

The bottom line on when a second stimulus check might arrive, how to estimate your total payment, what to do if you never got your first check and other important details.

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Here's what's happening with a second stimulus check.

Angela Lang/CNET

This week, we will learn if stimulus negotiations can yield an agreement before the Nov. 3 election. If the stimulus bill passes and you qualify, that timeline will determine when a second stimulus check might hit your mailbox or bank account, as well as the total sum you could expect.

We're going to take you through the most important facts about stimulus payments, from the way the IRS calculates payments to how federal taxes could change your next stimulus check, and beyond.

1. Stimulus negotiations are coming to a head

With the election just over two weeks away, Tuesday is an important inflection point. The Senate plans to vote on a new stand-alone bill to renew the Paycheck Protection Program. A day later, Senate Majority Leader Mitch McConnell will lead another vote on last month's failed "skinny" stimulus bill -- note that this bill doesn't contain money for another round of stimulus checks. This could potentially set up a battle between Senate Republicans and the White House, which is currently negotiating a comprehensive package with Democrats

Whether Senate Republicans will fall in line with the White House remains to be seen, but McConnell has reportedly said behind the scenes that he'd bring the White House bill to a vote in the Senate, despite his public repudiation, according to reporters from Politico and The Washington Post.

Tuesday also happens to be the deadline House Speaker and lead Democratic stimulus negotiator Nancy Pelosi set as the last day to finalize the White House's $1.8 trillion stimulus offer if the bill has a chance of passing before the election. "I am optimistic that we can reach agreement before the election," she said in a statement on Sunday.

If either of these opposing approaches to take root -- a large bill with checks or a small bill without direct payments to Americans -- it will be the last chance to send Americans more aid before the end of 2020. Otherwise, it's likely we'll will have to wait until the election results are in for another chance.

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High unemployment rates and a faltering economy underscore the need for more aid.

Angela Lang/CNET

2. People who are incarcerated might get money after all

A judge in California ruled that imprisonment should not disqualify someone from receiving a stimulus check (PDF) and ordered the IRS to release payments to people who would otherwise meet the qualifications. The ruling found that the CARES Act did not specifically or legally bar this group of people from getting checks and that the IRS' interpretation is incorrect. If it holds, up to 2 million people or their families could still receive payments for those individuals.

3. Stimulus payment calculations follow this formula

You may be interested to know that the IRS has a formula for working out how much stimulus money you could get, and that's what determines whether you receive the full amount, a partial payment or far more than the $1,200 if you have kids.

It also explains how you might still be able to get some stimulus money, even if your family's yearly income exceeds the limit set out by the CARES Act in March. The calculations start with your household's total adjusted gross income, add on the money allotted to qualifying dependents, and then start deducting from the total, based on your income bracket (as defined by the CARES Act). 

You can calculate how much you could get in a stimulus check now, including for a second check. 

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4. Most people paid off debt or banked their stimulus money

A new survey this week on how people in the US used their first stimulus check shed light on the economic reality of the coronavirus' effects. The survey from the Federal Reserve Bank of New York polled 1,300 households between June and August. The study found that of the 89% who reported receiving a stimulus check ($2,400 median total):

  • 29% spent the stimulus money (on essentials, nonessentials and donations).
  • 36.4% saved their stimulus money.
  • 34.5% used it to pay down debt.

When asked what they'd do with a second check of $1,500, 45% of respondents said they'd save the money, 30.9% said they'd apply it toward debt, and 24.2% said they'd spend it in some way.

5. You might be in one of 5 different payment waves

Eligible Americans get their checks at different times, often due to how they're getting paid. For example, people who have direct deposit -- an electronic transfer of funds into their bank account -- set up with the IRS could get their checks weeks before those who receive a paper check or prepaid EIP card in the mail. We identified five priority groups based on the first stimulus checks

6. New eligibility changes may get more money for dependents

It's likely that a second stimulus check would largely follow the same rules and guidelines as the first. But the qualifications for who could get money are subject to change, in ways that could benefit your family. One proposed bill redefines who counts as a qualifying dependent, and would give your family $500 for each dependent you claim on your taxes, regardless of age. 

The current $1.8 trillion proposal from the White House offers a $1,000 payment per child dependent. We've explained how some families might benefit more from one bill versus the other in terms of a total payment. (Here's how young people could qualify for their own $1,200 check.)

7. Your second payment could arrive quicker than the first

With the first check, the IRS learned how to mobilize and delivery stimulus money, and worked out many of the growing pains in the plan. If a second check is approved, it's likely that the agency could speed up the process of sending out the first set of payments. The tracking tool is already up and running, the system is in place and it's likely that the majority of people who qualified for a first check will also receive another. 

The timeline is constantly changing, but we've mapped out potential dates a check could be sent if approved before -- or after -- the election.

8. There are many confusing exceptions and rules

If and when a second stimulus check is approved, there will be lots of small details, rules and exceptions that can get confusing. While some situations will be easy to understand, others around you and your dependents might make it unclear if you're eligible, and for how much money. The fringe cases are many. 

For example:

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Less than a quarter of eligible recipients received their payment as a check in the mail.

Sarah Tew/CNET

9. The IRS still owes some people money from the first check

If you're still waiting for your first stimulus payment, there are several ways to hunt it down. As many as 9 million people were estimated to be eligible for a first check but didn't receive it, because it requires registering with the IRS -- an extra step most people didn't have to take. The deadline is Nov. 21 and we show you how to do it. Some people with dependents received only a partial payment and are still owed money. The deadline to get that in 2020 passed Sept. 30, but we explain how you can claim it with next year's taxes. 

10. You won't have to pay taxes on any stimulus money

The IRS doesn't consider stimulus money to be income. That means a payment you get this year won't reduce your refund in 2021 or increase the amount you owe when you file your 2020 tax return. You also won't have to repay part of your stimulus check if you qualify for a lower amount in 2021. The IRS said if you didn't receive everything you were owed this year, you can claim it as a credit on your 2020 federal income tax return by filing in 2021. Here's everything to know about stimulus checks and taxes.

There's much more to know about other government payments during the pandemic, including a possible interest check from the IRS and where the $300 federal unemployment benefit is now.