Blacks, Latinos and the poor less likely to get $1,200 coronavirus stimulus checks
(USA Today) - With another round of stimulus checks in the works, a new study concludes that people who are poor, Black or Latino were less likely to get the $1,200 payments distributed last spring under a new federal law aimed at blunting the economic fallout of the coronavirus pandemic.
The study, by the nonpartisan Tax Policy Center, concluded that while the rollout of the cash payments was a success in many ways, there were significant disparities by income, race, ethnicity and family citizenship in terms of who received the money.
Thirty percent of adults younger than age 65 reported that their families had not received the stimulus payments or that they didn’t know if the money had arrived as of late May.
Just six in 10 adults (nearly 59 percent) with incomes at or below 100 percent of the federal poverty level reported receiving the payments. Nearly 74 percent of white adults reported getting the checks, compared to almost 69 percent of Black adults and nearly 64 percent of Hispanics.
The report cited various reasons for the disparities, such as some people having no bank account or lacking access to the internet. Among Latinos, some adults may have been ineligible because they or their spouse were undocumented or did not qualify as residents of the United States, the report said.
The issues identified in the report could pose challenges again if lawmakers decide to send out a second round of stimulus payments, as expected.
Congressional leaders are hoping to have another coronavirus aid package ready by the end of the month. President Donald Trump met with GOP leaders at the White House on Monday and laid out his key demands for the package.
While Republicans and Democrats have different ideas about what should be in the next bill, they all seem to agree that many Americans need another stimulus check to help them bounce back from the economic hardships caused by the pandemic.
“I think we’ve made a lot of progress,” Trump said of the negotiations.
More than 159 million checks totaling $267 billion were distributed during the first round of stimulus payments earlier this year. Payments of up to $1,200 went to individuals with an adjusted gross income of $75,000 or less. Married couples who filed jointly and had incomes of up to $150,000 were eligible for $2,400.
The Internal Revenue Service used tax returns from 2018 and 2019 to determine how much stimulus money a recipient would get. But most people whose incomes are below the federal poverty level aren’t required to file tax returns, which made it harder for the government to find them if they were eligible for a stimulus payment.
That was the biggest barrier in getting checks to many people, the Tax Policy Center’s report said. In some cases, people may not have known they were eligible for a check.
Another problems was that many people who had not received a check by the end of May did not have a bank account, the report said. Most people got the stimulus money as a direct deposit into their account. People without bank accounts had to wait until the Treasury Department sent them a paper check, a process that started later than the direct deposits.
Another barrier, the report said, was the role of the internet in the distribution process. People who have not filed taxes during the past two years could enter their information into an online portal provided by the IRS. But one in five low-income people who did not receive a check reported that they did not have internet access at home.
“That’s a problem anytime, but it’s a particular problem during the pandemic,” said Janet Holtzblatt, a tax expert and the study’s lead author.
Many libraries or other facilities that offer free internet access or volunteer tax assistance were closed because of the coronavirus pandemic. Filing a paper application wasn’t possible because IRS offices also were closed because of the pandemic and faced a large backlog when they began reopening in phases.
For many people, that meant “there was no other option,” Holtzblatt said.
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The study suggests one way around that problem during the next round would be to channel payments to tax nonfilers through state agencies that administer Supplemental Nutrition Assistance Program or Medicaid benefits. But that could require changes to federal privacy laws and investments in new infrastructure, the report said.
Another way to get the money quicker to recipients who don’t have bank accounts would be to issue prepaid debit cards. The Treasury tried that approach in May and sent stimulus payments to 4 million people via debit cards.
“The problem was they came in envelopes with the vendor’s name, and the cards have the vendor’s name,” Holtzblatt said. “So what do you do when you receive a card from somebody you don’t recognize? Many people did what I would have done and said, ‘Oh, that’s junk mail,’ and tore it up and threw it away.”
The government could avoid that problem in the next round, she said, by making sure the Treasury Department is written on the envelope that the debit cards are mailed in and include on the cards themselves.
“That would help get the money to people,” Holtzblatt said.