Second $1,200 Stimulus Check And Reduced Unemployment Insurance Boost: How HEALS Act Could Affect You

Another massive round of economic stimulus might soon be on the way as the U.S. economy continues to fight through the devastating coronavirus-induced downturn.

U.S. Senate Republican leaders on Monday unveiled a draft $1 trillion package known as the “HEALS Act” that proposes trimming extended unemployment benefits, issuing a second round of direct payments, replenishing small business loans and providing firms with tax credits for operating during the pandemic, among other key provisions that could impact your wallet.

“The pandemic is not finished, the economic pain is not finished, so Congress cannot be finished either,” said Senate Majority Leader Mitch McConnell, a Republican from Kentucky, in a Monday speech on the Senate floor.

But the GOP proposal sets the stage for a divisive clash among party lines, and the clock is ticking. The bill omits a payroll tax cut previously championed by President Donald Trump and differs dramatically from the $3 trillion-plus HEROES Act that the House of Representatives passed in May, days before the CARES Act-backed extended $600 unemployment benefits are set to expire.

Here’s what you need to know about the proposal, including the provisions that could impact your wallet and the likelihood that they’re passed.

1. Another round of $1,200 (or more) stimulus payments

The most wide-sweeping impact to your wallet, another round of direct stimulus payments could be in the works, if the HEALS Act is passed.

The bill structures eligibility similarly to the first round in March. Individuals with incomes of $75,000 or less a year and couples making up to $150,000 a year are eligible for $1,200 payments or $2,400, respectively, with an extra $500 reserved for individuals or households with a dependent.

Separate from the CARES Act, the HEALS Act would allow for parents caring for a dependent of any age, including college-aged dependents, to still receive a $500 payment. Meanwhile, the proposal also ensures that those who have died prior to January 1, 2020, do not receive a check. Individuals in prison for all of 2020 or those incarcerated at the time that the Treasury department processes the checks cannot receive a stimulus payment, nor can they claim it as a 2020 tax credit.

Both parties back stimulus payments, meaning it’s likely going to make it into the final draft of the bill, though the amount is considerably less generous from Democrats’ previous proposals.

The House’s HEROES Act proposed more generous checks of up to $6,000 per family, $2,400 per married couple and $1,200 per dependent for up to three children, while a separate proposal from Sens. Kamala Harris (D-Calif.) and Bernie Sanders (I-Vt.) floated sending monthly payments of $2,000 to Americans making less than $120,000.