- Congressional Democrats are encouraging people to file taxes early this year.
- Sen. Ron Wyden tweeted that people who lost jobs or income should report their 2020 income “ASAP.”
- Biden’s proposal would provide a $1,400 check to individuals earning $75,000 and under and couples earning $100,000 and under.
- Visit the Business section of Insider for more stories.
Congressional Democrats are starting to encourage people to file their taxes early this year so they qualify for more generous federal relief under President Joe Biden’s stimulus package.
Sen. Ron Wyden of Oregon, chair of the Senate Finance Committee, tweeted that tax-filing season starts this week on February 12. He encouraged people who lost employment or suffered any loss of wages to file their taxes “ASAP” to ensure the timely arrival of federal aid.
The third round of stimulus checks could be based on 2020 income
Past stimulus checks were based on 2018 or 2019 adjusted gross income (AGI) — whichever the filer had submitted most recently — so the IRS could quickly deliver payments without having to wait until the 2020 tax-filing season. However, anyone who qualifies for more relief based on their 2020 income can claim it on their tax return as a credit.
There is mounting concern among experts that many people could receive less in federal aid under this latest stimulus package than they are eligible for. Congress will likely settle on allowing the IRS to use either 2019 or 2020 income tax data to determine relief eligibility. Some people whose income was lower last year but has not yet been reported to the IRS could be left out of relief.
For example, an individual who earned $100,000 in 2019 but only made $50,000 in 2020 may not get a full $1,400 stimulus check under the Biden plan, unless they file their 2020 tax return, and the IRS processes it, before the legislation is approved and checks start going out.
As of now, Biden’s proposal would provide a $1,400 check to individuals earning $75,000 and under, along with couples making $150,000 or less.
Wyden’s remarks come as Democrats move on an aggressive timeline for Biden’s rescue package. Committees in the House are expected to spend around two weeks drafting legislation around the Biden plan with the intention of a floor vote during the week of February 22.
They are still divided on some core components over the next wave of stimulus checks. Insider reported last week that Democrats were considering reducing the income thresholds on $1,400 checks to scale back the number of people eligible for relief.
The plan under consideration would provide full $1,400 checks for single-filers earning $50,000 and under, along with joint-filers making $100,000 or less.
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