COVID-19 and Direct Payments to Individuals: Comparison of Recent Proposals for a Second Round of Payments

COVID-19 and Direct Payments to Individuals: Comparison of Recent Proposals for a Second Round of Payments

link to page 2

INSIGHTi

COVID-19 and Direct Payments to
Individuals: Comparison of Recent Proposals
for a Second Round of Payments
Updated October 20, 2020
The CARES Act (P.L. 116-136), signed into law on March 27, 2020, included direct payments to
individuals. These payments, most of which have already been issued, were equal to $1,200 per eligible
individual ($2,400 for most married couples), with an additional $500 per eligible child. The payments
phase down for higher-income households. (For more information on the CARES Act payments, see the
CRS resource guide.)
The following subsequent legislative proposals would provide a second round of payments
 the Heroes Act (H.R. 6800), which passed the House on May 15, 2020;
 the American Workers, Families, and Employers Assistance Act (S. 4318), which was
introduced in the Senate on July 27, 2020 (S. 4318 is one component of what has been
referred to as the HEALS Act); and
 the “revised version” of the Heroes Act (H.R. 8406), introduced on September 29, 2020.
The House passed the revised version of the Heroes Act on October 1, 2020, as a House
amendment to the Senate amendment to H.R. 925.
Table 1 provides a summary of the major provisions of these proposed second rounds of payments.
Although these proposals differ, there are several major similarities. First, as with the CARES Act
payments, all the proposals for a second round of payments nominally structure them as a new one-time
refundable tax credit for 2020 that would be automatically issued this year, as opposed to 2021 (when
taxpayers will file their 2020 income tax returns). The IRS would determine payment amounts based on
2019 tax return data, or if unavailable, 2018 income tax return data. Second, recipients of Social Security,
Supplemental Security Income (SSI), Railroad Retirement, or certain VA benefits who have not filed a
recent federal income tax return would be eligible to receive these payments automatically. Third, as with
any tax credit, these payments would not count as income or resources for a 12-month period in
determining eligibility for, or the amount of assistance provided by, any federally funded public benefit
program. Finally, these payments would not be taxable.
Congressional Research Service
https://crsreports.congress.gov
IN11513
CRS INSIGHT
Prepared for Members and
Committees of Congress

link to page 4 Congressional Research Service
2
Table 1. Major Provisions of Direct Payments in Recent Legislative Proposals
First Round of
Proposed Second Round of Direct Payments
Payments in the
CARES Act
Heroes Act
HEALS
“Revised” Heroes Act

(P.L. 116-136)
(H.R. 6800)
(S. 4318)
(H.R. 8406)
Payment
$1,200 payments for
Same as CARES Act
Same as CARES Act
Same as CARES Act
amount
eligible individuals

($2,400 for married

joint filers).

Additional $500 for
Additional $1,200 for each
Additional $500 for each
Additional $500 for each
each dependent child
dependent, including older
dependent, including older
dependent, including older
under 17 years old (as
children and adult
children and adult
children and adult
defined for the child
dependents, up to a
dependents.
dependents.
credit).
maximum of three
dependents.
Phaseout
Total payment amount
Same as CARES Act
Same as CARES Act
Same as CARES Act
phases out by 5% of
adjusted gross income
over thresholds:
$75,000 singles
$112,500 heads of
households
$150,000 married joint
filers
Eligibility
Everyone except:
Same as CARES Act
Everyone except:
Same as CARES Act

Nonresident


Nonresident aliens
aliens


Dependents of other

Dependents of

taxpayers
other taxpayers


Individuals who died

before January 1, 2020


Incarcerated

individuals as defined

under 42 U.S.C.

402(x)(1)(A)a

Dependents eligible for Dependents eligible for
Dependents eligible for
Dependents eligible for
$500 amount are
$1,200 payment are those
$500 amount are those
$500 payment are those
those defined under
defined for the dependent
defined for the dependent
defined for the dependent
IRC §24(c) for the
exemption. In other words,
exemption. In other words,
exemption. In other words,
child tax credit.
all qualifying children and
all qualifying children and
all qualifying children and
qualifying relatives.
qualifying relatives.
qualifying relatives.

link to page 4 link to page 4 link to page 4 Congressional Research Service
3
First Round of
Proposed Second Round of Direct Payments
Payments in the
CARES Act
Heroes Act
HEALS
“Revised” Heroes Act

(P.L. 116-136)
(H.R. 6800)
(S. 4318)
(H.R. 8406)
ID
All eligible individuals
All eligible individuals and
Same as CARES Act
All eligible individuals and
requirement
and qualifying children
qualifying children must

qualifying children must
must have a work-
have a SSN or ITIN for the

have a SSN or ITIN for the
authorized Social
household to receive the

household to receive the
Security Number
payment.b

payment.b
(SSN) for the

household to receive a
payment.b

Households in which

at least one otherwise
eligible individual does
not have an SSN—and
instead uses an
Individual Taxpayer
Identification Number
(ITIN)—are ineligible
for the payments.
(Exception for certain
married members of
the Armed Forces.)

ITINs are issued by the
Internal Revenue
Service (IRS) to
taxpayers who are not
eligible for a SSN so
that they can comply
with federal tax law.
ITIN users include
many noncitizens who
are unlawful y present
or unauthorized to
work in the United
States.
Offset and
The CARES Act
Same as CARES Act, except Same as CARES Act
Same as CARES Act, except
Reduction for
payments cannot be
these payments cannot be

these payments cannot be
Past-Due
offset (reduced before
offset for child support
offset for child support
Debts
being issued) to satisfy
debt.

debt.
certain debts owed to

governmental agencies,
such as tax debts or

unemployment
compensation debts.
These payments can be
offset for child support
debt.

Congressional Research Service
4
First Round of
Proposed Second Round of Direct Payments
Payments in the
CARES Act
Heroes Act
HEALS
“Revised” Heroes Act

(P.L. 116-136)
(H.R. 6800)
(S. 4318)
(H.R. 8406)

In addition, these payments
In addition, these payments
In addition, these payments
would, with certain
would be generally exempt
would be generally exempt
exceptions, be exempt from from debt col ection
from debt col ection
debt col ection actions, such actions, such as garnishment actions, such as garnishment
as garnishment or levy, that
or levy, that occur once
or levy, that occur once
occur once payment are in
payments are in accounts
payments are in accounts
accounts (i.e., after
(i.e., after payments are
(i.e., after payments are
payments are issued).
issued).
issued).
Modifications
NA
Yes
Yes
No
to CARES Act
payments
Budgetary
$292.4 bil ion
$412.5 bil ion
NA
$306.9 bil ion
Cost
FY2020-FY2030
FY2020-FY2030
FY2021-FY2030
Sources: CRS analysis of H.R. 8406, as introduced September 29, 2020; S. 4318, as introduced on July 27, 2020; the
Heroes Act (H.R. 6800), as passed by House on May 15, 2020; the CARES Act (P.L. 116-136); and the Joint Committee on
Taxation, JCX-11R-20, JCX-16-20, JCX-21-20.
Notes: Estates and trusts are ineligible to receive the CARES Act payments, and would also be ineligible under the three
proposals. Under all three proposals, the payments would be extended to the U.S. territories in a manner similar to
CARES Act payments. Budgetary cost estimates are the costs for a second round of payments only, and do not include
the cost of modifying the CARES Act payments, if applicable.
a. These individuals would also be ineligible to receive these payments as a tax credit claimed on their 2020 income tax
returns if they were considered incarcerated (as defined under 42 U.S.C. 402(x)(1)(A)) for all of 2020.
b. Adoption taxpayer IDs (ATINs) could also be used for adopted children.

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
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United
States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However,

Congressional Research Service
5
as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the
permission of the copyright holder if you wish to copy or otherwise use copyrighted material.

IN11513 · VERSION 5 · UPDATED