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Some U.S. direct payments will take months to reach Americans: congressional panel

EconomyApr 03, 2020 11:36PM ET
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© Reuters. FILE PHOTO: A person in a mask walks on a nearly empty street in the coronavirus outbreak near the Treasury Department in Washington

By David Morgan

WASHINGTON (Reuters) - Americans should start receiving direct payments from the U.S. government in mid-April to help them cope with the coronavirus pandemic, but some may not see the money until mid-September, according to a congressional committee.

The government is expected to distribute 60 million payments of up to $1,200 per individual during the week of April 13 using bank deposit information from 2018 and 2019 federal income tax filings, according to a memo from Democrats on the House of Representatives Ways and Means Committee.

It will not begin to send out paper checks to those who have no bank deposit information on file until around May 4, according to the memo, which was reviewed by Reuters.

The Internal Revenue Service expects to issue about 5 million checks per week, meaning some Americans may wait 20 weeks, the memo said. The checks will be issued in "reverse adjusted gross income order," starting with people with the lowest income.

Under that schedule, the last checks would arrive around Sept. 21, potentially blunting the effectiveness of the direct payments, which economists call one of the quickest and most effective ways to stimulate the economy.

An IRS spokesman did not respond to a request for comment.

The payments are authorized by a $2.2 trillion coronavirus stimulus bill passed by Congress and signed into law by President Donald Trump last week.

People earning up to $75,000 a year can expect payments of up to $1,200, with an additional $500 per child. Those earning more than $99,000 are not eligible.

The money will flow to Americans sooner than under past initiatives.

In 2001, the IRS needed over six weeks to issue rebates authorized by President George W. Bush's tax cut. Seven years later, it took nearly three months to issue the first payments to fight the Great Recession.

But the summer-long timeline for checks is too slow to help people beset by the current pandemic, analysts said.

"Not very effective," said Howard Gleckman of the nonpartisan Tax Policy Center. "I've got to buy food today. I've got to pay bills now. Giving me money in September? I'll take it, but it's not helping with my immediate problems."

The Trump administration initially said people who do not file tax returns would have to fill out a simplified form to get a payment. Under pressure from Democrats who said senior citizens and others would be penalized, the Treasury later announced that Social Security beneficiaries would not have to complete additional paperwork.

Others who do not file tax returns still need to file a simplified form to get the money.

The IRS expects to create an online portal by late April or early May through which taxpayers can learn the status of their payment and update direct deposit information, the memo said.

The IRS is also looking for information on about 90 million to 110 million taxpayers who are either filers or non-filers, the document said.

Some U.S. direct payments will take months to reach Americans: congressional panel
 

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