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1 1 (March 25, 2020)

handle is hein.crs/govcaws0001 and id is 1 raw text is: Researh Sevice COVID-19 and Direct Payments to Individuals: Estimated Impact of Recovery Rebates in the March 22 CARES Act on Family Incomes March 25, 2020 A draft of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, circulated on Sunday, March 22, 2020, includes many provisions designed to stimulate the economy in response to the effects of the COVID-19 pandemic. One such provision of the March 22 draft is the 2020 recovery rebate, a direct payment made to individuals. Similar recovery rebates were sent to individuals in response to the 2001 and 2008 recessions. Several Members of Congress have recently proposed varying forms of direct payment, and an earlier version of the CARES Act (introduced as S. 3548) includes a direct payment proposal. The direct payment proposed in the March 22 draft is structured similarly to the 2008 recovery rebates. The rebate takes the form of an advance refundable tax credit and would rely on the tax system to pay the credit to eligible individuals. As such, this Insight refers to eligible individuals as taxpayers. In general, taxpayers would be eligible for a rebate of $1,200 ($2,400 if the taxpayer is a married couple filing jointly). Taxpayers could increase the amount they receive by $500 for each child that they could claim for the child tax credit. The rebate amount would gradually phase out for higher-income taxpayers. The March 22 draft includes other provisions related to the timing of rebate payments, the information used to determine the rebate amount, and administrative challenges related to paying the rebate. How Much Would Family Incomes Increase Due to the March 22 CARES Act Proposed Direct Payment? Policymakers may consider the extent to which a direct payment could increase family income. To estimate the potential impact of the 2020 recovery rebates, CRS calculated the amount families would receive under the proposal in the March 22 CARES Act. CRS then compared the estimated rebate a family would receive to their estimated monthly income. Table 1 presents families' median estimated monthly income and the median percentage of monthly income that families would receive as a rebate. Congressional Research Service https://crsreports.congress.gov IN11270 CFS NStGHT Prepaimed for Mernbei-s and Committees 4 o. C- --q . . . . . . . . . .. ..--------------------------------------------------------------------------------------------------------------------------------------------------------------------

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