Yesterday Republicans released their HEALS Act, but really it’s kind of a hodgepodge of bills spearheaded by various committee chairs. I want to address 10 questions about the stimulus checks as proposed in the HEALS Act in particular before moving on to make other topics about the HEALS Act and student loans and take a deeper look at unemployment and other provisions in there.
1. Who would be eligible for a stimulus payment under the HEALS Act?
Exact same people who were eligible under the CARES Act except if you have adult dependents and were excluded based on income under the CARES Act, in which case it’s possible you would be eligible for a HEALS Act stimulus even though you weren’t for a CARES Act stimulus simply because you’d be eligible for more stimulus under the HEALS Act given that you have adult dependents who are eligible for the $500 under the HEALS Act but weren’t eligible under the CARES Act.
So the levels where the income phaseouts begin are the same between the HEALS Act and the CARES Act, $75,000 for single, $112,500 for head of household, and $150,000 for married filing jointly.
But let’s say that you’re single and your income is $99,000 a year and you have one adult dependent. Your maximum stimulus under the CARES Act would have been $1,200 but due to your income you were completely ineligible.
However, under the HEALS Act because the HEALS Act proposes to include all dependents for the $500, your maximum stimulus would be $1,700, so now you would be eligible for $500 stimulus.
If your income is $100,000, you wouldn’t have been eligible for a CARES Act stimulus, but you would be eligible for a $450 HEALS Act stimulus on account of your dependent, because you lose eligibility of five cents on the dollar you make over the threshold amounts, just like in the CARES Act.
2. Would those on Social Security, SSI, and other federal benefit programs be eligible for a stimulus check under the HEALS Act?
Yes, if you were eligible under the CARES Act, you would be eligible under the HEALS Act. And unlike the CARES Act where there was a lot of confusion for these folks, the HEALS Act has specific language in it directing Treasury to obtain relevant information from the Social Security Administration, Veterans Affairs, etc.
The HEALS Act also speaks directly about representative payees, saying that the stimulus payment will go to the representative payee but that the payment must be used for the beneficiary not the representative payee.
3. Would there be retroactive stimulus checks for dependents aged 17 or older?
No. While the Republican legislation does propose to make all dependents eligible for the $500 stimulus to the individual or individuals that claim them as a dependent, there is nothing in this legislation that speaks to a retroactive payment like the Democrat’s HEROES Act proposed.
4. Is the number of dependents that would be eligible for a HEALS Act stimulus be limited to three?
No. Under the HEROES Act, Democrats proposed making all dependents eligible, bumping up the payment per dependent to $1,200 up to a maximum of three dependents.
Under the HEALS Act Republicans put out yesterday, they are also making all dependents eligible, even adult dependents, college students, but they’re keeping the amount the same at $500 but not limiting the number of dependents eligible for the $500, same as CARES Act.
5. Would those behind on child support be eligible for a stimulus payment under the HEALS Act?
No, unless the amount of your past due child support is less than the stimulus you would be eligible for if you weren’t past due on child support in which case you would be eligible for the difference.
6. Are nonresident aliens eligible for a stimulus payment under the HEALS Act?
No, the HEALS Act has the same language in there excluding nonresident aliens as defined by the IRS for a stimulus payment.
7. Would those married to somebody without a social security number and who filed a joint tax return with them be eligible for a stimulus check under the HEALS Act?
No. The HEALS Act has the same social security number requirements as the CARES Act and as does the CARES Act specifically excludes these individuals along with dependents without a social security number, as did the CARES Act.
There is still the exception made for mixed status families where at least one spouse is in the Armed Forces, same as the CARES Act.
8. What about deceased individuals?
HEALS Act says that if someone is deceased before January 1, 2020, they are ineligible, and this would be retroactive to the CARES Act stimulus. This is curious because the IRS’s position with respect to deceased individuals was that if they were deceased when they got the payment they were ineligible, which is a more aggressive position.
So let’s say someone passed away on May 1, and they got the stimulus payment on May 15, IRS said that individual would be ineligible, but it seems to me that the HEALS Act is saying that that individual could still be eligible for the stimulus because they did not pass away before January 1, 2020. And like I said previously the HEALS Act would make this rule retroactive to the CARES Act, so if this aspects of the HEALS Act becomes law, it’ll be interesting to see how the IRS responds.
9. What about prisoners?
HEALS Act says that those who are in prison at the time Treasury processes the rebate is ineligible for a stimulus check, and it also says that those who are in prison every day of 2020 is ineligible for a stimulus payment, and this rule would be made retroactive to the CARES Act stimulus.
However, what about those who, they were ineligible for a check because they were in prison when Treasury processed them, but they were released before the end of 2020? It seems that that group may be eligible to claim a credit on their 2020 tax return and get the stimulus then, but if this passes, we’ll have to see what the guidance is on that.
10. What about garnishment?
So the CARES Act did not exclude stimulus payments from being levied for seized by banks, private debt collectors, those who have a garnishment order.
This HEALS Act proposes that stimulus payments be federally protected from such things to ensure that people get their stimulus money, and it proposes that this be made retroactive to the CARES Act stimulus payments as well.