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1 1 (March 26, 2020)

handle is hein.crs/govcsyv0001 and id is 1 raw text is: I Cong ressinal Resea rch Sevice COVID-19 and Direct Payments to Individuals: Estimated Impact of Recovery Rebates in H.R. 748 on Family Incomes Updated March 26, 2020 H.R. 748 (CARES Act), as passed by the Senate on March 25, 2020, includes many provisions designed to provide emergency relief to the economy in response to the effects of the COVID-1 9 pandemic. One such provision of H.R. 748 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 two earlier versions of the CARES Act (S. 3548 and a draft circulated on March 22, 2020) also included a direct payment proposal. The direct payment in H.R. 748 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. H.R. 748 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 direct payment proposed in H.R. 748? 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 that families would receive under the proposal in H.R. 748. 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. These estimates are broken down by the ratio of family income to the poverty threshold to show the impacts of the 2020 rebate across the income distribution. Table 1 estimates that the median family living in poverty would receive a rebate that amounts to 182% of the amount of the family's monthly income. The median refers to the midpoint of the distribution- Congressional Research Service https://crsreports.congress.gov IN11270

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