IRS Says Much Of Next Stimulus Payout Will Be Faster Direct Deposits

The money for a second round of $1,200 stimulus checks for individual Americans could come quicker than the first, according to The Wall Street Journal (WSJ).

The heightened speed at which the payments will come is based around the procedures, online tools and bank account information that were not present during the hasty rollout of the first payments, new at the time due to the pandemic’s rapid onset.

“Since the IRS has already assembled the data it needs to deliver the first-stimulus payment, they should be able to deliver a second payment fairly quickly and at a lower administrative cost,” Jack Smalligan, a former Office of Management and Budget official, told WSJ.

Congress is set to approve the second round of the checks, which were meant to offset the economic damage of layoffs and business closures from the pandemic in March, soon, although a whole stimulus package has not yet been finalized.

Roughly 60 percent of the disbursements are expected to be paid out via direct deposit this time. About 80 million of the 160 million payouts were direct deposited in the first round. Since then, 14 million people have signed up for direct deposits on the IRS website for a total of 94 million.

As of Thursday (July 23), the White House and GOP have agreed on a stimulus plan, which will be a $1 trillion package. The package will include a replacement for the $600 extra unemployment benefit, with “enhanced unemployment insurance” based on 70 percent of a person’s wage. There will also be money allotted to help schools reopen, and for liability issues with businesses and healthcare providers.

WSJ reported that there is still contention over exactly what will be passed into law in the end. Democratic lawmakers have been pushing for more expensive individual checks and broad financial aid measures. In a bill passed in May, they proposed giving $1,200 per adult along with another $1,200 for each dependent, along with expanding eligibility to include adult dependents, college students and households in which not every resident is a legal citizen.

Republicans have pushed back some, preferring to repeat the original plan of $1,200 for adults and $500 for dependents; although the new plan is likely to include all types of dependents this time and not just children, WSJ reported, citing an unnamed source.

Both proposals, though, would begin shrinking payments past certain income levels: over $75,000 for individuals or $150,000 for married couples.

However, the more complex the eventual plan becomes, the longer it could take to send out the checks, WSJ reported.