COVID-19 and Direct Payments: Comparison of First and Second Round of “Stimulus Checks” to the Third Round in the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2)

COVID-19 and Direct Payments: Comparison of First and Second Round of “Stimulus Checks” to the Third Round in the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2)

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INSIGHTi
COVID-19 and Direct Payments:
Comparison of First and Second Round of
“Stimulus Checks” to the Third Round in the
American Rescue Plan Act of 2021 (ARPA;
P.L. 117-2)
Updated March 25, 2021
The American Rescue Plan Act of 2021 (ARPA; P.L. 117-2) includes a third round of direct payments
(often referred to as “stimulus checks”). A first round of direct payments was included in the CARES Act
(P.L. 116-136) in March 2020. A second round of direct payments was included in the Consolidated
Appropriations Act, 2021 (P.L. 116-260) in December 2020.
This Insight compares some of the major aspects of the third round of direct payments to the first and
second rounds. A summary of the third round of direct payments can be found here.
Table 1. Major Provisions of First, Second, and Third Round of Direct Payments
First Round of Direct Payments
Second Round of Direct
Third Round of Direct
(CARES Act | P.L. 116-136, as
Payments
Payments (ARPA; P.L. 117-

amended)a
(P.L. 116-260)
2)
Payment amount
$1,200 per eligible individual
$600 per eligible individual
$1,400 per eligible individual
$2,400 for married joint filers
$1,200 for married joint filers
$2,800 for married joint filers
Additional $500 for each qualifying
Additional $600 for each
Additional $1,400 for each
child (i.e., dependent child under 17
qualifying child (i.e., dependent
dependent (including older
years old as defined for the child
child under 17 years old as
children and adult dependents).
credit).
defined for the child credit).
Phaseout
Total payment amount phased out by
Same as first round
Total payment phases out
5% of adjusted gross income over
ratably between fol owing
thresholds:
income levels:
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First Round of Direct Payments
Second Round of Direct
Third Round of Direct
(CARES Act | P.L. 116-136, as
Payments
Payments (ARPA; P.L. 117-

amended)a
(P.L. 116-260)
2)

$75,000 singles (S)
$75,000-$80,000 S
$112,500 heads of households (HOH)
$112,500-$120,000 HOH
$150,000 married filing jointly (MFJ)
$150,000-$160,000 MFJ
Eligibility
Everyone except:b
Everyone except:b
Everyone except:b

Nonresident aliens

Nonresident aliens

Nonresident aliens

Dependents of other taxpayers

Dependents of other

Dependents of other

taxpayers
taxpayers


Individuals who died before

Individuals who died before
January 1, 2020
January 1, 2021
ID requirement
Unmarried individuals: Eligible
Same as first round
Unmarried individuals: Same
individuals must have had a Social
as first and second rounds.
Security number (SSN).

Married individuals: Eligible
Married individuals: Same as
individuals must have had an SSN. If
first and second rounds.
one otherwise eligible spouse did not

have an SSN, maximum amount halved
(i.e., $1,200 for married joint filers).

Qualifying children. If an eligible
Qualifying dependent: If an
unmarried individual did not have an
eligible individual does not have
SSN, or neither spouse of a married
an SSN or neither spouse of a
joint filer had an SSN, the household
married joint filer has an SSN,
could not receive any amount for a
the household could receive any
qualifying child with an SSN.c
amount for a qualifying child with
an SSN.c

Type of SSN: For al eligible
Type of SSN: For al eligible
individuals and qualifying children,
individuals and dependents, SSNs
SSNs must general y be associated
may or may not be associated
with work authorization.
with work authorization.
Automatic
Payments automatical y issued based
Payments automatical y issued
Payments automatical y issued
Issuance of
on information from 2019 tax returns
based on information from 2019
based on information from 2020
Payments to Tax
or, if unavailable, 2018 returns.
tax returns.
tax returns or, if unavailable,
Filers
2019 returns.
If 2020 tax return information
results in a larger payment, the
IRS is directed to top-up
payments in 2021 after it
processes 2020 returns.
Automatic
For eligible nonfilers who were
For eligible nonfilers who were
For eligible nonfilers (individuals
Issuance of
recipients of Social Security,
recipients of Social Security, SSI,
who did not file a 2020 or 2019
Payments to
Supplemental Security Income (SSI), or
or certain VA benefits, Treasury
income tax return), the IRS is
Certain
certain Department of Veterans
was directed to issue payments
given broad authority to make
Households Not
Affairs (VA) benefits, Treasury
based on information provided by
payments based on information
Required to File a
general y issued payments based on
the Social Security Administration
available to the Treasury.
Tax Return
their 2019 annual benefit statements
(SSA), Railroad Retirement Board,
(“Eligible
(e.g., SSA-1099 or RRB-1099).
or VA (including but not limited
Nonfilers”)
to annual benefit statements).d
Offset and
Al rounds of payments are structured as an advance of a temporary tax credit. Offset and garnishment/levy provisions
Reduction for Past-
tend to differ depending on whether this benefit is received as an “advanced credit” (referred to simply as a “payment” in
this Insight) or claimed as a tax credit—the Recovery Rebate Credit—on the applicable tax return.

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First Round of Direct Payments
Second Round of Direct
Third Round of Direct
(CARES Act | P.L. 116-136, as
Payments
Payments (ARPA; P.L. 117-

amended)a
(P.L. 116-260)
2)
Due Debts
Offset of Payment: Payments could
Offset of Payment: Same as
Offset of Payment: Similar to

not be offset—or reduced before
first round, except these payments
the second round.
issuance—to satisfy certain debts
also could not be offset for child
owed to governmental agencies. Such
support debt.
exempt debts included tax debts,

debts owed to federal agencies, and
unemployment compensation debts,

but did not include child support debt.
Offset of Credit on Tax Return:
Offset of Credit on Tax
Offset of Credit on Tax
General y, Treasury may offset the
Return: Same as first round.
Return: Same as first round
amount of the direct payment that the
(applicable benefit claimed on
taxpayer claims as a credit on their
2021 return). (Unclear if IRS will
2020 income tax returns.e In mid-
forgo offset for federal tax debt
March 2021, the IRS agreed not to
for 2021 Recovery Rebate
offset the 2020 Recovery Rebate
Credit.)
Credit for federal tax debts.
Garnishment: Not addressed.
Garnishment: Payments would
Garnishment: Not addressed.
general y be exempt from debt
col ection actions, such as
garnishment or levy, which occur
after the Treasury issues the
payments. These protections only
apply insofar as the payment is
received as an advance credit.
Budgetary Cost
$292.4 bil ion
$164.1 bil ion
$410.6 bil ion
FY2020-FY2030
FY2021-FY2030f
FY2021-FY2031
Source: CRS analysis of P.L. 116-136; P.L. 116-260; P.L. 117-2; and JCX-11R-20, JCX-24-20, JCX-14-21.
Notes: The second (and proposed third) round of payments are (would be) extended to the U.S. territories in a manner
similar to the first round of payments.
a. P.L. 116-260 amended ID requirements of the first round of payments, clarified issues for representative payees, and
modified provisions affecting offset of the payments when claimed as a tax credit on 2020 returns.
b. Estates and trusts are ineligible to receive the first, second, and proposed third rounds of payments.
c. Households can also receive additional amounts for qualifying children if those children have adoption taxpayer IDs
(ATINs).
d. If a direct payment for a recipient of a federal benefit program is deposited into the account of a representative payee
or fiduciary, the law explicitly states that it shal be used only for the benefit of the entitled beneficiary.
e. Change made retroactively by P.L. 116-260, Division N, Title II, Subtitle B §273(b).
f.
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, estimated to cost an additional $1.6 bil ion between FY2021 and
FY2030.

Congressional Research Service
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Author Information

Margot L. Crandall-Hollick

Acting Section Research Manager

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IN11605 · VERSION 8 · UPDATED