WASHINGTON – With another round of stimulus checks underway, a new study concludes that poor people, black or Latin were less likely to receive the $ 1,200 payments distributed last spring under a new federal law aimed at mitigating the economic fallout from the coronavirus pandemic.
The study by the nonpartisan Tax Policy Center concluded that while the roll-out of cash payments was successful in many ways, there were significant disparities in terms of income, race, ethnicity and citizenship. family in terms of recipients of the money.
Thirty percent of adults under 65 said their families had not received the stimulus payments or were unsure if the money had arrived by the end of May.
Only six in 10 adults (nearly 59 percent) with incomes at or below 100 percent of the federal poverty line reported receiving the payments. Almost 74% of white adults said they got the checks, compared to nearly 69% of black adults and almost 64% of Hispanics.
The report cited various reasons for the disparities, such as some people not having a bank account or not having internet access. Among Latinos, some adults may have been ineligible because they or their spouse were undocumented or did not qualify as residents of the United States, according to the report.
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The problems identified in the report could pose problems again if lawmakers decide to send a second round of stimulus payments, as planned.
Congressional leaders hope to have another coronavirus aid package ready by the end of the month. President Donald Trump met with GOP leaders Monday at the White House and outlined his main demands for the package.
While Republicans and Democrats have different ideas on what should be in the next bill, they all seem to agree that many Americans need another stimulus check to help them recover from the economic woes caused. by the pandemic.
“I think we’ve made a lot of progress,” Trump said of the negotiations.
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More than 159 million checks totaling $ 267 billion were distributed in the first round of stimulus payments earlier this year. Payments of up to $ 1,200 were made to individuals with adjusted gross income of $ 75,000 or less. Married couples who filed a joint application and had incomes of up to $ 150,000 were eligible for $ 2,400.
The Internal Revenue Service used the 2018 and 2019 tax returns to determine how much stimulus money a beneficiary would receive. But most people with incomes below the federal poverty line are not required to file tax returns, making it harder for the government to find them if they were eligible for a stimulus payment.
This was the biggest barrier to getting checks for many people, according to the Center for Tax Policy report. In some cases, people may not know they were eligible for a check.
Another problem was that many people who had not received a check by the end of May did not have bank accounts, according to the report. Most people received the stimulus money as a direct deposit into their account. People without a bank account had to wait for the Treasury Department to send them a paper check, a process that began later than direct deposits.
Another obstacle, according to the report, is the role of the Internet in the distribution process. People who have not filed income tax returns in the past two years can enter their information into an online portal provided by the IRS. But one in five low-income people who did not receive a check said they did not have Internet access at home.
“It’s a problem at all times, but it’s a particular problem during the pandemic,” said Janet Holtzblatt, a tax expert and lead author of the study.
Many libraries or other facilities offering free internet access or voluntary tax assistance have been closed due to the coronavirus pandemic. Filing a paper claim was not possible because IRS offices were also closed due to the pandemic and faced a significant backlog when they began to reopen in stages.
For many people, that meant “there was no other option,” Holtzblatt said.
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The study suggests that one way to get around this problem in the next cycle would be to channel payments to non-tax filers through state agencies that administer the Supplemental Nutritional Assistance program or benefits. Medicaid. But that could require changes to federal privacy laws and investments in new infrastructure, according to the report.
Another way to get money faster to recipients who don’t have a bank account would be to issue prepaid debit cards. The Treasury tried this approach in May and sent stimulus payments to 4 million people via debit cards.
“The problem was that they came in envelopes with the seller’s name, and the cards had the seller’s name on it,” Holtzblatt said. “So what do you do when you get a card from someone you don’t recognize?” A lot of people did what I would have done and said, “Oh, that’s junk mail,” and tore it up and threw it away.
The government could avoid this problem in the next round, she said, by making sure the Treasury Department is marked on the envelope that debit cards are mailed and included on the cards themselves- same.
“It would help provide people with money,” Holtzblatt said.
Michael Collins covers the White House. Contact him on Twitter @mcollinsNEWS.