December 30 2020

US House of Representatives Passes Bill Increasing COVID Relief Payments

Source: IBFD Tax Research Platform News

On 28 December 2020, the US House of Representatives passed a bill (H.R. 9501) to increase the second round of coronavirus-related economic impact payments from USD 600 to USD 2,000 for individuals. The bill is entitled the "Caring for Americans with Supplemental Help Act of 2020" or the "CASH Act of 2020".

This second round of the economic impact payments (EIPs) was authorized under the COVID-related Tax Relief Act of 2020, which President Trump signed into law on 27 December 2020 as part of the Consolidated Appropriations Act, 2021 (H.R. 133).

The bill, if passed by the Senate and signed into law by the President, would allow the EIPs of up to USD 2,000 (up from USD 600) for individuals, or USD 4,000 (up from USD 1,200) for married couples filing a joint return, and up to USD 2,000 (up from USD 600) for each qualifying child.

The Chairman of the House Ways and Means Committee announced the passage of the bill through the House in a Statement of 28 December 2020. The Chairman also issued a statement of 29 December 2020 urging the Senate to conduct a standalone vote on the bill after Senate Majority Leader Mitch McConnell introduced different legislation that combines the increased EIPs with provisions regarding the freedom of speech on the Internet and election integrity.

The Treasury Department (Treasury) and the Internal Revenue Service (IRS) issued a News Release of 29 December 2020 (IR-2020-480) to announce that the second round of EIPs began to be issued on 29 December 2020 and that any additional amounts will be paid as quickly as possible.

The News Release of 29 December 2020 further states that the EIPs referred to as the recovery rebate credit (RRC) will appear on IRS Form 1040 (US Individual Income Tax Return) or IRS Form 1040-SR (US Tax Return for Seniors) for the 2020 taxable year because the EIPs are an advance payment of the recovery rebate credit. Taxpayers who did not receive the economic impact payments in 2020 are urged to review the eligibility criteria when they file their 2020 tax returns.