Stimulus Check: Income Eligibility May Be Capped at $40,000 With Second Payment

As Donald Trump continues to voice his approval for the inclusion of a second round of stimulus checks in another coronavirus relief package, the number of Americans eligible for such a payment could be drastically lower. While the first round of economic impact payments capped income eligibility at $99,000 for singles and $198,000 for joint filers, recent remarks have suggested that a second round of stimulus checks could cap income eligibility at $40,000.

Those remarks were made by Senate Majority Leader Mitch McConnell on Monday as he discussed the next relief package, which will see negotiations begin upon Congress' return to Capitol Hill later this month. Stating that a second stimulus check "could well be" part of the next relief bill, McConnell added a caveat: "I think the people who have been hit the hardest are people who make about $40,000 a year or less." His statements suggest that while the next relief package could very well include economic impact payments, the number of Americans eligible to receive them will be drastically more limited.

Although this is the first income cap that has been publicly commented upon, Jeff Stein of The Washington Post, citing multiple sources, suggested that it is not a number to be taken lightly. According to Stein, "consensus within GOP is moving that direction, which would sharply limit eligibility." Kyle Pomerleau, an economist and resident fellow at the American Enterprise Institute, said that such a cut-off would result in approximately 80 million households being eligible for payments, roughly half the number as were eligible under the CARES Act.

It is unclear if that $40,000 figure would mark a strict cut off mark or phase-out, as was seen under the CARES Act. Under that bill, individual filers earning more than $75,000 but less than $99,000 were eligible for a partial check, whereas those earning less than $75,000 were eligible for a full $1,200 stimulus check.

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McConnell's remarks fall in line with previous comments he has made about discussions surrounding the fate of the second round of stimulus checks heats up. Staunchly against the Democratic-backed HEROES Act, McConnell in May reportedly told the president that the next relief bill cannot exceed $1 trillion, according to Forbes. Reducing the income cap for stimulus checks would help achieve that figure.

Despite McConnell's remarks, however, there has been no concise opinion on what the next relief package could look like. There are currently numerous options on the table, and lawmakers remain divided regarding another round of economic impact payments. It is believed that the next relief package will be passed by early August.