by: Ryan J. Stevens
Congress passed the CARES Act nearly six months ago, which provided roughly $2 trillion to individuals, businesses, and states in response to the global coronavirus pandemic. The Act also included payments of as much as $1,200 for individual taxpayers and $500 per child, phased out when incomes exceed $75,000 for individuals and $150,000 for couples filing jointly.
In May, the House passed the $3 trillion Heroes Act, which, among other things, would fund another round of stimulus checks. The Senate has failed to consider the measure and has been unable to reach a compromise with the White House on further spending. Instead, Senate Majority Leader Mitch McConnell recently unveiled a “skinny” coronavirus relief bill that does not include any new stimulus checks for individual Americans. The bill is limited to an additional $250 billion round of Paycheck Protection Program loans to small businesses, $10 billion for childcare support, and $10 billion to forgive a loan from the CARES Act to the United States Postal Service. The “skinny” bill failed to pass in the Senate.
With the Senate & White House deadlocked on another federal coronavirus relief package, could states go out on their own and issue stimulus payments to their residents? Are lawmakers taking any action related to the stimulus checks already released by the federal government?
Earlier this month, North Carolina Governor Roy Cooper signed House Bill 1105 into law, creating the Coronavirus Relief Act 3.0. The bill created the Extra Credit Grant Program, administered by the State Department of Revenue, which will provide eligible individuals a $335 grant. The State will pay for the Program by allowing the Department of Revenue to use up to $5 million of funding from the Coronavirus Relief Fund. More than a million households in North Carolina would receive the $335 checks.
The State will process all grants as soon as practicable, but no later than December 15, 2020. The State may issue the grants by direct deposit if the individual received a 2019 State tax refund by direct deposit.
Under the bill, the State Department of Revenue must include an explanatory insert specifying that the grant is intended to assist with the additional virtual schooling or childcare expenses incurred due to the COVID-19 pandemic with each grant award.
The bill stipulates that spouses who filed a joint 2019 state income tax return will be considered one eligible individual. The Department of Revenue must provide a grant to individuals that meet the following eligibility requirements:
- Automatic grant award. – An individual who filed a 2019 State income tax return on or before October 15, 2020, as provided under G.S. 105-263 and meets both of the following conditions:
- The taxpayer reported on Form D-400 that either the taxpayer or, if filing a joint return, the taxpayer’s spouse, was a resident of the State for the entire 2019 calendar year.
- The taxpayer reported at least one qualifying child on line 10a of Form D-400. (2)
- Application for grant award. – An individual who applied for a grant under this program on a form prescribed by the Secretary of Revenue postmarked on or before October 15, 2020, and meets all the following conditions:
- The applicant did not file a 2019 State income tax return solely because the applicant’s gross income for the 2019 taxable year did not exceed the State filing requirements for the taxpayer’s filing status.
- The applicant provides a name, mailing address, and any other information required by the Secretary.
- The applicant reports that the applicant was a resident of the State for the entire 2019 calendar year.
- The applicant reports the applicant had at least one child that met the conditions of a qualifying child, as that term is defined in Section 24 of the Internal Revenue Code, for the 2019 calendar year. The applicant must include the name, age, and social security number of the qualifying child. Only one applicant can claim a qualifying child.
In Missouri, Governor Mike Parsons signed Senate Bill 676 in mid-July. The bill exempts stimulus checks received as part of the coronavirus relief bill from state income taxes. Current state law allows a taxpayer to deduct from their Missouri adjusted gross income a portion of their federal income taxes paid. SB 676 provides that the State will not consider federal income tax credits received under the federal CARES Act when determining the amount of federal income tax liability allowable as a deduction.
Current state law also requires taxpayers who itemize deductions to include any federal income tax refund amounts in their Missouri adjusted gross income if they previously claimed a deduction for federal income tax liability on their Missouri income tax return. SB 676 provides that the State will not include any amount of a federal income tax refund attributable to a tax credit received under the CARES Act in the taxpayer’s Missouri adjusted gross income.
In Pennsylvania, the Assembly introduced Senate Bill 1248,part of the Pennsylvania Coronavirus Relief Package. The bill, the Pennsylvania Investment in Economic Stimulus (PIES) Act, would provide direct payments to qualified adults in Pennsylvania. The PIES Act would define a qualified resident of Pennsylvania as an individual over 17 years of age who has for 90 days:
- Resided in the Commonwealth;
- Had legal immigration or citizenship status; and
- Is not currently incarcerated.
The PIES Act would disperse to Pennsylvanian taxpayers as a state-stimulus plan through the Fiscal Year 2020/2021 the remaining funds from 2019-20 and all 2020-21 Commonwealth Financing Authority (CFA) funds. It is unclear how much a direct payment would be under this legislation. The Senate Community, Economic & Recreational Development Committee has not yet advanced the PIES Act.
Further, State Senator Anthony Williams released a cosponsor memo in late March for legislation that would create the Pennsylvania Common Wealth Fund. The fund would be a restricted account overseen by the Department of Revenue and would provide an additional option to Pennsylvanian individuals who voluntarily wish to give back all or a portion of their federal stimulus checks. The bill would authorize the government, in turn, to direct the funds into programs to help those in need, such as property tax & rent rebates, temporary assistance for needy families, CHIP, or medical assistance. Williams has not yet formally introduced the bill.
Last week, the Vermont House approved a $5 million program to provide stimulus checks to residents who did not receive a federal stimulus payment earlier this year due to their immigration status. The bill, H. 968, would establish the Vermont Coronavirus Economic Stimulus Equity Program. The bill would require applicants to the program to certify that they are Vermont residents, were ineligible to receive a CARES Act stimulus payment due to their immigration status, and had an adjusted gross income of less than $99,000, or $198,000 if filing jointly, in 2019.
Like the federal stimulus payments under the CARES Act, H. 968 also would allow adults to receive $1,200 and $500 for each eligible child. The program could benefit between 3,500 and 4,000 adults and up to 1,000 children.
Governor Phil Scott previously called for $2 million for the program in last month’s budget proposal. The Vermont Legislative Joint Fiscal Office noted of the appropriated $5 million, $2 million would come from the General Fund, and $3 million would come from funds appropriated to the Judiciary from the Tobacco Litigation Fund to address adjudication of Children in Need of Supervision Cases (CHINS). Any remaining funds not awarded would revert to the fund to the CHINS program.
Local Florida governments have also considered providing residents direct payments. Orange County received $243 million from the CARES Act and is allocating $36.5 million for the Individual and Family Assistance Program, which will provide a one-time payment of $1,000 per household for residents impacted by COVID-19. The payments will assist those who need to bridge financial gaps for rent, mortgage, medical, or an eligible utility expense.
The Jacksonville City Council approved a plan in April to allow eligible residents to apply for $1,000 stimulus payments. The funds are from a $159 million federal grant, which helped to fund payment cards for 40,000 households both making less than $75,000 and who could demonstrate that they lost 25% of their income because of the coronavirus. On the first day, the Council issued 1,544 people a $1,000 card. This amounts to the Council distributing $1.544 million.
Jacksonville also launched the Senior and Disabled Financial Assistance Program to support senior citizens over the age of 72 and receiving Social Security Disability benefits. The program provided one-time payments of $300 for up to 3,300 qualifying seniors and disabled citizens. All Jacksonville residents claimed the 3,300 payments in less than an hour after enrollment began in June. The City later launched phase two of the program in late August, making one-time payments of $300 to an additional 3,000 qualifying seniors and disabled citizens.