Treasury Secretary Steve Mnuchin says payments will be available as soon as three weeks after the bill is passed. Photo: Sarah Silbiger/Getty Images

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Part of the $2.2 trillion coronavirus stimulus package signed by President Trump on March 27 is an emergency universal income payment of $1,200 for most every adult who makes under $75,000 a year. (According to an estimate by the conservative Tax Foundation, 93.6 percent of tax-filers will receive some sort of payment.) While progressive Democrats and voices on the left have made forceful arguments for why the one-off sum is not enough, the $1,200 is an unprecedented step in U.S. politics. And like most unprecedented additions to the safety net, for many it’s unclear how the stimulus program will translate from an idea in a bill to money in Americans’ billfolds. To help understand the stopgap measure, below is a guide on how to access the $1,200 payment, and the political conversations surrounding the historic action.

How much money is the payment?

Based on 2019 tax filings, individuals who earn up to $75,000 a year are eligible for a full $1,200 check. Prorated checks will go out to those making up to $99,000 a year, with the payment decreasing by $5 for every $100 in income above $75,000. That math breaks down to $50 less for every $1,000 earned over $75,000. So a person earning $80,000 would get a check of $950; a person earning $90,000 would get a check of $450; and a person earning $98,000 would get a check of $50.

Married couples are eligible for a check of $2,400, as long as adjusted gross income is less than $150,000 a year; reduced checks will be cut for married couples earning up to $198,000. Married couples will also receive $500 for every child under 17, while parents who file as a “head of household” — a tax status usually reserved for single parents — are eligible for the $500 per child under 17 as well, and can receive the $1,200 check if they earn less than $112,500 a year. Heads of households can get prorated checks if they earn up to $136,500.

While Senate Republicans initially pushed for low-income Americans who do not earn enough to pay an income tax to receive a check of $600, that proposal was scrapped after bipartisan criticism of the questionable logic that poor people deserve less cash during an unprecedented crisis.

How and when do I get the payment?

While Americans with Social Security numbers do not need to apply to receive the payments, the Internal Revenue Service needs to already have bank-account information on file in order to send out cash via direct deposit. For those who have direct deposit on file with the IRS, the payments began appearing in accounts during the week of April 13. For those who will receive the check by mail, NBC News reports that the checks could take as long as five months to be delivered.

For those who do not have bank information on file with the agency, Secretary Mnuchin said that the Treasury Department will “create a web-based system for people where we don’t have their direct deposit they can upload it, so that they can get the money immediately as opposed to checks in the mail.”

On Monday, the IRS released more information on how to access the payment: If people have not filed a 2019 return, their eligibility will be based upon information from 2018.

Can banks seize the payment to pay off existing debts?

Perhaps. On April 14, after some direct deposits had already been distributed, the American Prospect reported that “Congress did not exempt CARES Act payments from private debt collection” and that “banks would be first in line to grab the payments to offset a delinquent loan or past-due fees.” Per the report:

The Treasury Department effectively blessed this activity on a webinar with banking officials last week. In audio obtained by the Prospect, Ronda Kent, chief disbursing officer with Treasury’s Bureau of the Fiscal Service, can be heard explaining that banks had posed questions to her about “whether these payments could be subject to collection from the bank to which the money is deposited, if the payee owes an outstanding loan or other payments to the bank.” She responded—twice—that “there’s nothing in the law that precludes that action,” while counseling that the banks’ compliance officers should consult with their legal offices about what policies their banks will implement. “You will want to know for your bank what your bank has decided to do.”

After a report detailed USAA’s decision to revoke $3,400 in CARES payments to a disabled veteran to offset his negative balance, the bank — founded to provide insurance and financial services for the armed forces — announced it would no longer use the payments to pay off existing debts.

Have there been delays in the processing of the direct deposit payments?

Yes. The Treasury Department announced that there were delays or missing payments for dependents for several million Americans who filed their taxes through H&R Block and TurboTax, as the IRS did not have their information on file. The Washington Post reported more frustrations: The “Get My Payment” tool debuted by the IRS on Wednesday will often display a “Payment Status Not Available” message for those who have experienced delays, and will lock out users if they try multiple times in a day.

Will I have to pay the $1,200 back in taxes in the future?

No. While the program will cost taxpayers at-large an estimated $292.4 billion over a decade, individuals who receive the direct payment will not owe the IRS in their filing next April and do not have to pay income taxes on the cash they receive.

What are some of the criticisms of the payment plan?

Because the check is a one-off deal, some Senate Democrats argue that it — together with extended unemployment benefits — is not enough to tide Americans over. While senators Michael Bennet, Cory Booker, and Sherrod Brown argued for multiple payouts based on changes in the unemployment rate, Bernie Sanders and representatives Maxine Waters, Ilhan Omar, and Rashida Tlaib pushed for monthly cash injections. (That Canada will provide people who are quarantined or have been laid off with $2,000 a month for the next four months adds to the frustrations of those who consider the cash injection not enough.) And even if the $1,200 is a welcome boost, the five-month timeline for those without bank accounts on file with the IRS is far too long to have a significant impact during the heart of the crisis. Having some extra money in September isn’t going to do much for an economic crash occurring mostly in April and May.

“$1,200 is the average rent for most Americans,” Natalie Foster, the co-chair of the pro-UBI organization the Economic Security Project, told The Guardian. “This first check is eaten up, and what are they supposed to do after that?” On March 30, the Federal Reserve Bank of St. Louis projected that job losses due to the coronavirus would reach 47 million, pushing America’s unemployment rate to 32.1 percent. On April 2, that number came crashing toward reality when the Department of Labor reported that the previous week saw 6.6 million people file for unemployment — doubling the 3.3 million who filed the week before.

There’s also the concern of those Americans who have not filed taxes in recent years: The IRS estimates that around 30 to 40 million adults, about 15 percent of the population, don’t file tax returns; many of these individuals are exempt because they do not earn enough to qualify for federal income taxes. (For Americans who have not filed tax returns in the past two years, the IRS instructed them to fill out a “simple” tax return, which will be available soon.) In addition, New York representative Alexandria Ocasio-Cortez noted that these checks are only going to people with Social Security numbers, and not to immigrants with tax IDs.

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