Second Stimulus Check Income Limit Will Likely Be Higher Than $40,000

While Senate Republicans begin preparing a proposal for the next coronavirus stimulus package, the parameters of a second stimulus check are beginning to take shape. Senate Majority Leader Mitch McConnell has sought to keep the cost of another package down to $1 trillion, about a third of the HEROES Act House Democrats passed in May. One idea he discussed recently involved targeting low-income Americans for the next stimulus package, but the threshold he suggested might not work out.

During stops in his home state of Kentucky last week, McConnell suggested that the next stimulus check would only be sent to Americans making $40,000 or less a year. "I think the people who have been hit the hardest are people who make about $40,000 a year or less. Many of them work in the hospitality industry. So that could well be a part of it," McConnell said during an event in Bardstown, Kentucky on July 6. However, a source "familiar" with the negotiations on the next stimulus package told Bloomberg a "cap at that level is not seen as likely."

The $40,000 threshold would have helped lower the cost of another stimulus check program. The first one, included in the CARES Act, cost almost $300 billion of the $2.1 trillion package. The first economic impact payment of $1,200 was sent to individual American taxpayers who made up to $75,000 a year. Couples who file taxes together and earned up to $150,000 qualified for $150,000. Dependents under 17 qualified for $500, added to the payments sent to those who claimed them. Individuals who made between $75,000 but less than $99,000 and couples who made as much as $198,000 a year also received payments.

To complicate matters further, there have been some mixed messages from the White House. Earlier this month, President Donald Trump said he supported "larger" stimulus checks than even what Democrats proposed. Then on July 10, Trump's economic advisor Larry Kudlow suggested the next payment could be less than $1,200.

Any coronavirus package needs some Democrats to support it in the Senate, but Republicans still have to iron out the differences among themselves. Aside from figuring out the stimulus payment, Republicans have to work out the federal unemployment insurance plan. The CARES Act provided unemployed Americans with $600 per week, but that expires on July 31. Democrats have wanted to keep this going until the end of the year, but some Republicans have considered it a disincentive for low-wage workers. Some Republicans have suggested lowering the payments to $200, while the Bipartisan Policy Center suggested $400. Sen. Rob Portman, a Republican from Ohio, suggested a $450 weekly payment.