Our tax attorneys have learned that strategist for Goldman Sachs Jan Hatzius has predicted that one more round of stimulus payments may be going out to American households in 2020. He was referring to the relief plan House Democrats put forth on May 12, 2020. The new Covid-19 stimulus plan included a $3 trillion proposal called the HEROES Act, which would result in a second round of checks, with some households receiving as much as $6000.
CARES Act and New Legislation
In the initial relief package called the Coronavirus Aid, Relief, and Economic Security Act–CARES–some married couples received $2400, and single individuals received up to $1,200. Those with children under 17 were given an additional $500 per child. These amounts came via direct-deposit in April, and exact amounts ultimately depended on the recipients’ income levels. The HEROES Act, if passed, would be the largest relief plan in American history. However, in its current form, it is not likely to pass a Republican-controlled Senate. The GOP-controlled upper chamber has minimized the need for a second large stimulus package as states begin reopening and the economy starts to move again. Nevertheless, Goldman believes a revised and much scaled-down version of HEROES Act may pass before the end of the year.
Global Recession Looming
The HEROES Act was designed to meet escalating economic challenges and addresses very serious financial problems many Americans are currently experiencing. For example, three million individuals filed for unemployment during the second week of May, and more than 36 million have done so since mid-March. The unemployment rate in the United States hit 14.7% in the month of April, and financial experts warn of a significant global recession that has the potential to be the worst since the Great Depression.
Support for Proposed Legislation
According to the House of Representatives’ fact sheet, the legislation being proposed is a self-described bold response to the economic collapse caused by the Covid-19 pandemic, and says that this crisis has led to the need for a significant amount of financial support for certain Americans. However, the Senate must now vote on the plan, which may lead to extensive renegotiations between the two chambers before the bill is passed.
Goldman Sachs’s Jan Hatzius went on to predict that about $550 billion in new stimulus money will be distributed in 2020, but that in the absence of a forcing event in May, Congress is unlikely to enact the next round of relief payments until the end of June. Goldman Sachs believes that when this next stimulus package is passed, it will include additional checks for households and individuals, extended unemployment benefits, state relief, and a lengthening of the employee retention tax credit, all of which were part of the original CARES package. If you have questions about your stimulus payment or other issues involving the IRS or what type of relief you qualify for, contact one of our experienced tax attorneys for additional information.
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