Second Stimulus Payments May Include Millions Left Out of Federal Aid Program

As Americans await a second round of stimulus checks, many are hoping the new payments will include those left out of the initial federal aid program.

Two months ago, the U.S. House of Representatives passed the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, and that now awaits debate on the Senate floor.

The first batch of federal funds released under the Coronavirus Aid, Relief and Economic Security (CARES) Act faced backlash for excluding millions of Americans, such as older high school students and the spouses of some immigrants.

However, because the HEROES Act will have a broader definition of a dependent, about 26 million more people will be eligible for federal aid this time around.

The Joint Committee on Taxation estimates that payments under the HEROES Act would be more than $100 billion than that of the payments handed out from the CARES Act.

The second federal aid program would also provide a larger amount per qualifying dependent, which would increase the economic relief provided to the average household.

An American Enterprise Institute analysis predicts that the average household would receive $2,170 from the HEROES Act, compared with the $1,729 from the CARES Act.

Pelosi HEROES Act
Nancy Pelosi urges the Senate to pass the HEROES Act during a news conference at the U.S. Capitol on July 15. The second round of stimulus checks is expected to include millions of Americans left out of the first batch of payments. Chip Somodevilla/Getty

HEROES will set the same income limits as CARES, which would exclude high income households from the second round of payments unless there are dependents who would quality for one.

These dependents would include children, specifically older teens who were left out of the first stimulus package.

Individual payments of $1,200 will be directed to up to three children per household. The checks are $700 more than the support provided under the CARES Act and will include older teens who have turned 17. The previous definition excluded children over the age of 17.

College students who are claimed as dependents on their parents' taxes would also be eligible for the same $1,200 payment. Adults claimed as dependents on another taxpayers' returns were excluded from the first batch of payments. Because most college students are classified as adults, they failed to qualify for the CARES payments.

In the last round of payments, Social Security numbers presented a barrier to immigrants from applying for federal aid. Both spouses were required to have an SSN under the CARES Act

However, American citizens who are married to immigrants without an SSN will receive a check in the next round.

According to the American Enterprise Institute, the HEROES Act will also be directing payments to filers with a valid tax ID number, which would widen the eligibility of resident aliens who may use an Individual Taxpayer Identification number as opposed to a SSN.

"Although the HEROES Act proposed much larger second-round rebates, it's unclear whether this is what ultimately passes," Kyle Pomerleau, a resident fellow at the American Enterprise Institute, told Newsweek in an email. "The Senate and the White House have already indicated that they would like to limit the eligible [population] of the second round of rebates."

Pomerleau said Senate Republicans are looking to limit payments to those with with incomes under $40,000, as opposed to the $75,000 cap under the CARES Act.

Although similar to the first federal aid program, the HEROES Act would be based on 2018 or 2019 tax filings and the cutoff will remain at $98,000 for single taxpayers and $199,000 for married couples.

White House economic adviser Larry Kudlow told Fox Business last week the second stimulus checks would target those in lower income brackets and without jobs.

Data has shown that nearly half of U.S. households have seen their income decline as a result of the new coronavirus pandemic.

Update 07/17/20 3:10 p.m. EDT This story was updated with comments from Pomerleau.