2020 Stimulus Checks Compared to 2009 and 2008

Compare to 2020 Stimulus Checks

A man holding a toddler opens a mailbox and takes out letters.

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In March 2020, Congress included stimulus checks as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). This $2 trillion aid package will help those impacted by the coronavirus pandemic.

2020 Stimulus Checks

The CARES Act sends a $1,200 check to eligible adults earning up to $75,000. It sends $2,400 to couples earning up to $150,000.  The income is based on 2019 adjusted gross income (or 2018 AGI if you hadn't filed your 2019 tax return). Eligible families can apply for an additional $500 for each child under the age of 17.

Stimulus checks ("Economic Impact Payments") started arriving the week of April 13, according to the IRS. To determine the amount of your stimulus check, the IRS relies on either your 2018 or 2019 tax return. For those who don't normally file, the IRS set up an online tool to register and determine eligibility.

People with higher incomes receive smaller rebates: $5 less per every $100 they make over the limits. It phases out completely at $99,000 singles ($198,000 for couples). If you made too much in 2019 to qualify for the rebate but your 2020 income qualifies you for the rebate, you’ll claim it as a credit on your 2020 tax return.

Recipients began receiving payments via direct deposit the week of April 16, 2020, according to Treasury Secretary Steve Mnuchin. If the IRS does not have your bank information, payments come via mail and take longer to arrive. Some Americans are also ineligible for stimulus checks and may receive nothing.

There are five other components of the bill.

  1. $130 billion for hospitals for ventilators and other equipment
  2. Extended unemployment insurance for workers
  3. $150 billion for state and local government
  4. Expanded lending for corporations
  5. Interest-free loans for small businesses

2009 Stimulus Checks

In 2009, the Economic Stimulus Act sent out $14.2 billion in stimulus checks.  The one-time payment went to recipients of Social Security, Supplemental Security Income, veterans, and railroad retirees.

The checks were part of the American Recovery and Reinvestment Act. Congress passed the ARRA to end the 2008 recession. The government’s goal was that recipients would immediately spend the checks. That would be a quick, direct way to jumpstart economic growth.

When Did Stimulus Checks Go Out?

In May 2009, the federal government sent a one-time Economic Recovery Payment (ERP) of $250 each. These checks went to more than 52 million beneficiaries of certain federal programs. These included Social Security, Supplemental Security Income (SSI), Railroad Retirement Board (RRB) and the Department of Veterans Affairs (VA).

Did Everyone Receive Stimulus Checks?

ARRA was unusual in that only those beneficiaries received checks. Most taxpayers received tax rebates called the Making Work Pay program. Instead of a check, the rebates showed up as a reduction in their tax withholding amount. The Obama administration argued that they would receive benefits quicker than waiting for a rebate after they filed their taxes in 2010.

In 2009, the average taxpayer received a tax cut of $400 per individual or $800 per family.

The tax cuts appeared in each paycheck starting in June 2009. Each employee had about 6% less withheld from their checks. 

What Other Stimulus Benefits Taxpayers Received in 2009

Stimulus checks were just one part of ARRA. Another $247 billion went to immediate relief for families, according to the now-defunct Recovery.gov website. This included tax cuts, tax credits, and extended unemployment benefits. The goal was to stimulate auto and home sales.

For example, the child tax credit was expanded for the working poor. Also, the earned-income tax credit was expanded for families with three or more children. ARRA added a $2,500 tax credit for college tuition. Many of the newly-unemployed took advantage of this credit to update their skills or change careers. It budgeted more than $1 billion for an $8,000 tax credit for first-time homebuyers. It allowed taxpayers to deduct sales taxes on new car purchases.

Congress set aside almost $1 billion to suspend taxes on unemployment benefits.

Congress also budgeted $70 billion to continue the Alternative Minimum Tax shelter.

What else did ARRA allocate? It targeted $83 billion to modernize federal infrastructure. To increase alternative energy production, it allocated $23 billion. Another $138 billion went to expand health care. It allocated $117 billion to improve education, including teacher salaries and Pell Grants. Science research received $18 billion. Small businesses were helped with $54 billion in tax deductions, credits, and loan guarantees.

2008 Stimulus Checks

The year before ARRA, the George W. Bush administration sent out stimulus checks to battle the 2008 recession. It spent $120 billion in fiscal years 2008 and 2009. It rebated taxes on the first $6,000 of income for individuals or the first $12,000 of income for couples. Stimulus checks were mailed out as follows:

  • Individual taxpayers received up to $600
  • Married couples were eligible for up to $1,200
  • Households with children received $300 per dependent child
  • Rebates were reduced for higher incomes at $75,000 for individuals and $150,000 for couples

Around 20 million retirees on Social Security and disabled veterans also received checks for $300 if they earned at least $3,000 in benefits in 2007. Couples received $600.

The Bush Economic Stimulus Package didn't have the impact it should have. A 2008 survey found that only 20% of those who received checks spent them. Another 32% put the money into savings. The rest use the checks to pay off debt.

Which Worked Better?

The ARRA's $14.2 billion in checks was less than the $120 billion in stimulus checks distributed by the Bush tax rebate. But ARRA disbursed the checks between May and October 2009. That's two months faster than the Bush checks, which went out between May and December 2008. 

In addition to the checks, the ARRA tax rebates put money in people's hands starting in June. It should have turned the recession around quicker. Unfortunately, many people didn't realize they had received a tax cut. They expected checks in the mail. As a result, they didn't spend the extra money because it didn't feel like a bonus.

The self-employed and others who made estimated payments didn't get their tax cuts until April 2010. Many of these small business owners also didn't notice the tax cut. By the time they received it, the recession was over. They should have gotten a tax break sooner, so they could have used it to hire workers.