Many Americans have obtained their COVID-19 stimulus checks. In this post, you’ll learn what stimulus checks are, how they came to be, the effects, how to check if you are eligible and possibly get the 4th stimulus check.
What is a Stimulus Check?
A stimulus check, according to Investopedia, is a check issued by the United States government to a taxpayer. The purpose of stimulus checks is to stimulate the economy by providing consumers with some spending money. Taxpayers are given this money because it is intended to increase consumption and revenue at retailers and manufacturers, thereby stimulating the economy.
A stimulus check can be received either through paper check or direct deposit. It can be part of a larger federal stimulus package designed to support the economy, as was the case with the CARES Act in 2020 and the American Rescue Plan in 2021.
Times the Stimulus Checks have been sent out:
The stimulus checks were used:
1. During the Great Recession of 2008.
2. Between March 2020 and March 2021, the US government sent three rounds of stimulus payments to Americans in order to alleviate the economic hardships caused by COVID-19.
How the coronavirus stimulus checks began
COVID-19 was declared a global pandemic by the World Health Organization on March 11, 2020. The United States reacted quickly. Individual states imposed a series of lockdowns to slow the spread, and as unemployment rose, the federal government stepped in. It passed relief legislation that included an Economic Impact Payment, also known as a coronavirus stimulus payment.
The stimulus checks eligibility
Individuals with low or no earnings who do not normally file taxes are among those who are eligible. This year, every American adult earning less than $75,000 (or couples earning less than $150,000) is eligible for a federal stimulus check.
To be eligible for the full payment, you must earn less than $75,000 per year ($150,000 if married filing jointly) or $112,500 if you are the head of household (typically single parents). Even if you have no income, you are eligible for a stimulus payment.
During the coronavirus pandemic, the IRS made three Economic Impact Payments to people who qualified:
- $1,200 in April 2020
- $600 in December 2020/January 2021
- $1,400 in March 2021
CHECK TO SEE IF YOU ARE ELIGIBLE (IRS.GOV)
Effects of Stimulus Checks
A stimulus check can be viewed as a form of tax reduction. The government can reduce taxes to encourage business and consumer consumption and savings. It can also encourage businesses and individuals to invest or spend more with their increased disposable income during a recession. Demand will rise as consumption rises, and businesses will hire more workers as a result. Wages will rise as labor demand rises, which will boost consumption in a virtuous cycle.
Will there be a fourth stimulus check?
Yes, some people are already getting theirs but not from the federal government, as the previous three stimulus payments did. It all depends on where you live this time, that is, your state.
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