1 1 (July 28, 2020)

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              Researh Sevice

COVID-19: Summary of Direct Payments in

the American Workers, Families, and

Employers Assistance Act (S. 4318)

Updated July 28, 2020
The American Workers, Families, and Employers Assistance Act (S. 4318) introduced on July 27,
includes a second round of direct payments to help alleviate the economic effects associated with the
Coronavirus Dis ease 2019 (COVID- 19) pandemic. The bill also includes modifications to the first round
of direct payments enacted in the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L.
116-136). This Insight provides a brief overview of the s ec ond round of payments proposed in S. 4318, as
well as a comparison to the enacted CARES Act payments and those proposed in the Heroes Act (H R.

Direct Payments
The proposed second round of direct payments would equal $1,200 per eligible individual ($2,400 for
married individuals filing a joint tax return), plus an additional $500 per eligible dependent, phased down
for higher-income taxpayers. In contrast to the CARES Act payments, which were effectively limited to
devend~ts under age 17, eligible individuals could receive the $500 amount for all dependents. This
more expansive definition includes an estimated 20.4 million dependents who are 17 years old and
older-including older children, students, and adult dependents.
Like the CARES Act payments, these payments would be nominally structured as a new one-time
refundable tax credit for 2020 that would be automatically advanced so that payments would be received
this year, as opposed to 2021 (when 2020 income tax returns willbe filed). Hence, the Internal Revenue
Service (IRS) would generally issue these payments automatically in 2020 based on 2019 tax return data,
or if unavailable, 2018 income tax return data.
As with the CARES Act payments, recipients of Social Security, Supplemental Security Income (SSI),
Railroad Retirement, or certain VA benefits who have not filed a recent federal income tax return would
be eligible to receive these payments automatically. Unlike the CARES Act, the bill would also direct the
IRS to automatically issue payments to all eligible nonfilers who received benefits from these programs
prior to this bill's enactment, not just to those who received benefits in 2019. In addition, the bill would

                                                             Congressional Re search Service

Prepa red M. Membersand
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