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INSIGHTi
COVID-19 and Direct Payments to
Individuals: Comparison of the Second
Round of “Stimulus Checks” in P.L. 116-260
to the First Round in the CARES Act (P.L.
116-136)
January 13, 2021
At the end of 2020, lawmakers included a second round of direct payments in the Consolidated
Appropriations Act, 2021 (P.L. 116-260). The payments equal $600 per eligible individual ($1,200 for
most married couples) plus an additional $600 per eligible child, phasing down for higher-income
households. The first round of direct payments was enacted in the CARES Act (P.L. 116-136) in March
2020.
As with the first round of direct payments, the second round of payments are structured as a new one-time
refundable credit against 2020 income taxes. General y, these payments are being automatical y issued by
the Treasury based on 2019 tax data until January 15, 2021. Eligible households who do not automatical y
receive a second payment (or who receive less than they would based on their 2020 income and family
size) are to general y be able to receive the payment (or receive an additional payment) as a refundable
credit when they file their 2020 income tax return. These payments are not taxable and do not count as
income or resources for a 12-month period in determining eligibility for, or the amount of assistance
provided by, any federal y funded public benefit program.
Table 1 summarizes the second round of payments and compares them to the first round enacted in the
CARES Act.
Table 1. Major Provisions of First and Second Round of Direct Payments
First Round of Direct Payments
Second Round of Direct Payments
(CARES Act | P.L. 116-136)
(P.L. 116-260)
Payment amount
$1,200 per eligible individual
$600 per eligible individual
$2,400 for married joint filers
$1,200 for married joint filers
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First Round of Direct Payments
Second Round of Direct Payments
(CARES Act | P.L. 116-136)
(P.L. 116-260)
Additional $500 for each qualifying child
Additional $600 for each qualifying child
(i.e., dependent child under 17 years old as
(i.e., dependent child under 17 years old as
defined for the child credit).
defined for the child credit).
Phaseout
Total payment amount phases out by 5% of
Same as CARES Act
adjusted gross income over thresholds:
$75,000 singles
$112,500 heads of households
$150,000 married joint filers
Eligibility
Everyone except:a
Everyone except:a
Nonresident aliens
Nonresident aliens
Dependents of other taxpayers
Dependents of other taxpayers
Individuals who died before January 1,
2020b
ID requirement
Prior to enactment of P.L. 116-260, all
General y al eligible individuals who are
eligible individuals general y had to have a
unmarried (i.e., file their taxes as single or
Social Security Number (SSN) for the
head of household) must have an SSN for
household to receive a payment.c In other
the household to receive a payment
words, married couples in which one
(including any amounts for qualifying
spouse did not have an SSN—and instead
children).c For eligible individuals who are
used an Individual Taxpayer Identification
married and who file a joint return, the
Number (ITIN)—were ineligible for the
maximum amount of the credit is
payments (even if their qualifying children
determined by the number of spouses with
had SSNs).
an SSN. Married couples in which only one
ITINs are issued by the Internal Revenue
spouse has an SSN (e.g., the other has an
Service (IRS) to taxpayers who are not
ITIN) are eligible to receive up to $600
eligible for an SSN so that they can comply
(instead of $1,200).
with federal tax law. ITIN users include
If no eligible individual has an SSN (i.e., an
many noncitizens who are unlawful y
unmarried taxpayer does not have an SSN
present or unauthorized to work in the
or neither spouse of a married couple has
United States.
an SSN), they cannot receive any payment
P.L. 116-260 modified the ID requirements
for themselves or for a qualifying child with
so that they are the same as for the second
an SSN.
round of payments.
These ID requirements also apply
retroactively to the first round of payments
enacted under the CARES Act.
Automatic Issuance of
For eligible nonfilers who are recipients of
For eligible nonfilers who are recipients of
Payments to Certain
Social Security, Supplemental Security
Social Security, SSI, or certain VA benefits,
Households Not
Income (SSI), or certain Department of
Treasury is directed to issue payments
Required to File a Tax
Veterans Affairs (VA) benefits, Treasury was based on information provided by the Social
Return (“Eligible
directed to issue payments general y based
Security Administration (SSA), Railroad
Nonfilers”)
on their 2019 annual benefit statements
Retirement Board, or VA (including but not
(e.g., SSA-1099 or RRB-1099).d
limited to annual benefit statements).d
Other eligible nonfilers could use an online
Other eligible nonfilers who had already
portal created by the IRS (the “nonfiler
provided their information on the nonfiler
portal”) to receive payments in 2020.
portal for the first round of payments are to
Otherwise, these individuals can file a 2020
receive the payment automatical y based on
income tax return to receive the payments. this information. Otherwise, these
individuals must file a 2020 income tax
return to receive the payments.
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First Round of Direct Payments
Second Round of Direct Payments
(CARES Act | P.L. 116-136)
(P.L. 116-260)
Offset and Reduction for
The CARES Act payments cannot be offset
Same as CARES Act, except these payments
Past-Due Debts
(reduced before being issued) to satisfy
cannot be offset for child support debt.
certain debts owed to governmental
In addition, these payments would general y
agencies, such as tax debts or
be exempt from debt col ection actions,
unemployment compensation debts.
such as garnishment or levy, which occur
These payments can be offset for child
after payments are issued.
support debt.
Budgetary Cost
$292.4 bil ion
$164.1 bil ion
FY2020-FY2030
FY2021-FY2030e
Sources: CRS analysis of P.L. 116-260; the CARES Act (P.L. 116-136); and the Joint Committee on Taxation, JCX-11R-20
and JCX-24-20.
Notes: The second round of payments are extended to the U.S. territories in a manner similar to CARES Act payments.
a. Estates and trusts are ineligible to receive the first and second round of payments.
b. For married couples in which one spouse died before January 1, 2020, the maximum payment amount is halved (i.e.,
$600). No payment wil be available to any otherwise eligible qualifying children if an eligible individual (or in the case
of a married couple, both spouses) has died before January 1, 2020.
c. Households can only receive additional amounts for qualifying children if those children have SSNs or adoption
taxpayer IDs (ATINs).
d. If a direct payment for a specified Social Security, SSI, Railroad Retirement, or VA beneficiary is deposited into the
account of a representative payee (“payee”) or fiduciary, the law explicitly states that it shal be used only for the
benefit of the entitled beneficiary. The payee and fiduciary enforcement provisions apply as under current law. This
clarification also applies to the first round of payments enacted under the CARES Act.
e. Budgetary cost estimates reflect the score for a second round of payments only. P.L. 116-260 includes retroactive
modifications to the first round of payments, including modifying the ID requirements to conform to the
requirements for the second round of payment. Overal , these changes are estimated to cost an additional $1.6 bil ion
between FY2021-FY2030.
Author Information
Margot L. Crandall-Hollick
Acting Section Research Manager
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
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