The first wave of IRS stimulus payments from the Coronavirus Aid, Relief and Economic Security Act are out, with more on the way, yet it remains unclear what the benefit of these checks will actually be to many residents here in the Santa Clarita Valley.
For those who had previously set up direct deposit with the federal government, the IRS began transferring coronavirus payments into bank accounts last week, while government officials confirmed earlier this week that paper checks began to go out Friday.
While the stimulus package is meant to assist in the suffering caused by the current health crisis, the flat payments aren’t adjusted for cost of living across the country.
Californians face the highest rents in the country, according to a study released by Zippa, which means these stimulus checks will cover the least of Californians’ bills.
Eight of the 10 cities with the highest rents are in California, and Santa Clarita is ranked No. 8 in cities where the stimulus check covers the least amount of rent, per the study.
That being said, nearly one in four Americans, or 24%, couldn’t pay their rent or mortgage payment in April, according to an Apartment List study. Of those, findings suggest half were able to make a partial payment, while the other half made no payment at all.
“Those who can’t work remotely are at higher risk of being furloughed or laid off and, therefore, are more at risk of not being able to afford to pay their bills,” financial analyst Peggy Williams added. “And, that’s not even scratching the surface of what will happen come May or June if the stay-at-home order is extended.”
The Apartment List study shows that 68% of those who cannot work from home lack confidence that they can continue to afford housing if the order is extended.
Williams says there are a number of flaws with this first round of payments, agreeing with another study that found Santa Clarita is No. 23 on a list of U.S. cities where the fewest people will benefit from the COVID-19 stimulus checks, with only 65% of households expected to receive the full benefits, according to Smart Asset.
“Under the IRS’ qualifications, there are a number of individuals who are being overlooked, including those earning too little and those who didn’t file taxes,” she said.
While the Treasury Department plans to develop a system that allows these individuals to identify themselves, those checks could arrive as many as five months later.
“It’s these people who are already struggling that need it most, yet won’t be getting that much-needed money until this is all said and done,” Williams added.
Even so, many who have yet to receive their stimulus payment are wondering when it’s going to arrive or if they’re eligible.
The IRS plans to send 5 million checks per week, starting with taxpayers who have the lowest annual adjusted gross income as reported on their 2018 or 2019 tax returns, while checks for those with the highest income can take approximately 20 weeks.
Those eligible for a payment can also track their money through the IRS’ Get My Payment web portal.
For more information, visit irs.gov/coronavirus/get-my-payment.
To view all coronavirus-related stories, visit signalscv.com/category/news/coronavirus.
