The CARES Act — a $2.2 trillion relief package enacted by Congress to address the fallout from coronavirus — includes a provision for one-time payments to most households across the country.
These stimulus checks will provide valuable assistance to many families, but many low- to moderate-income Mainers may face long delays receiving their checks. Others are poised to receive nothing at all.
How payments are calculated
American adults are eligible for a payment of $1,200, plus $500 for each qualifying dependent child. For married couples, each adult will receive $1,200. For example, a family of two adults and two children will receive $3,400 — $2,400 for the adults and $1,000 for the children.
Individuals with adjusted gross incomes under $75,000 and married couples with incomes under $150,000 will receive the full stimulus payment. The payments are reduced by $5 for every $100 of adjusted gross income above those thresholds, until they phase out entirely for individuals earning more than $99,000 and couples earning more than $198,000.
The Institute for Taxation and Economic Policy estimates that eligible Mainers will be entitled to just under $1.3 billion in total payments, with an average payment of $1,770 per household. (Note: Stimulus payments are structured as an advance on a new, one-time refundable tax credit for 2020. They are not considered taxable income and, in nearly all cases, will not affect any household’s future tax liability or refund.)
Some eligible filers will wait months before receiving their checks
Eligible Mainers who have already filed their 2019 or 2018 taxes, and those who receive Social Security payments, don’t need to do anything to receive their stimulus payment. The IRS has all the information it needs to send a stimulus payment, and some Mainers are already receiving them.
But not everyone will receive their payments quickly. Eligible households will receive their payments within the next few weeks if the IRS has direct-deposit information on file.
Everyone else will wait for a paper check, but the IRS has limited capacity to cut and mail checks, and plans to send paper checks at a rate of 5 million per week.
That means the Mainers who did not include direct-deposit information in their tax filing — either because they didn’t receive a refund or because they chose to receive a check in the mail — could be waiting until October to receive a paper check from the IRS. According to IRS data, only 59 percent of Maine tax returns included direct deposit details in 2017. That leaves almost 270,000 Maine households with a long wait for a paper check.
74,000 Maine households must file new paperwork to claim their payments
Some eligible households will need to take action to claim their stimulus payment because the IRS lacks sufficient information to send the payment. This includes households with very low incomes, who are not required to file federal income taxes each year.
ITEP analysis for MECEP finds that 73,540 households in Maine neither file taxes nor receive Social Security income. That’s just over one in eight Maine households. Elsewhere, ITEP’s national analysis reveals these households are overwhelmingly low-income.
For those Mainers who neither file taxers nor collect Social Security, the IRS has published a special form online to enter payment information.
Tens of thousands excluded from federal stimulus program
As crafted by Congress, the federal stimulus program excludes people over 16 years old if they are claimed as dependents on someone else’s tax return, including high school and college students as well as adults with disabilities.
These Mainers won’t receive payments themselves, nor will they be counted toward the payment for someone else’s household. ITEP estimates 69,600 Mainers are adult dependents who are overlooked by the CARES Act.
The stimulus program also excludes anyone without a Social Security number, making undocumented immigrants who file taxes with an Individual Taxpayer Identification Number ineligible for stimulus payments. Precise figures are hard to determine, but there may be fewer than 5,000 undocumented immigrants in Maine, according to the Pew Research Center.
Stimulus payments are a good start, but more relief will be needed
The $1.3 billion dollars in one-time payments will no doubt be a relief for many Mainers and their families who are facing immediate financial pressure because of the pandemic. But with tens of thousands of Mainers losing their jobs every week and tens of thousands more being excluded from receiving one-time payments or having to complete additional paperwork to get a payment months from now, many Maine families will continue to struggle highlighting the need for additional state and federal action.