What is the HEROES Act?
The HEROES Act (Health and Economic Recovery Omnibus Emergency Solutions Act) was a proposed $3 trillion economic stimulus bill passed by the U.S. House of Representatives on May 15, 2020. It was designed to provide additional financial relief to Americans during the COVID-19 pandemic, building upon the earlier CARES Act.
The legislation aimed to address ongoing economic challenges by providing another round of direct stimulus payments to eligible Americans, along with extended unemployment benefits, funding for state and local governments, and support for essential workers.
- $1,200 stimulus payment for eligible individuals
- $2,400 for married couples filing jointly
- $1,200 per dependent (a significant increase from CARES Act)
- Maximum family payment of $6,000
- Extended eligibility to ITIN holders
Am I Eligible for the HEROES Act?
Eligibility for the HEROES Act stimulus payment is determined primarily by your Adjusted Gross Income (AGI) and filing status. Here are the key eligibility requirements:
Income Thresholds for Full Payment
- Single Filers: AGI up to $75,000
- Married Filing Jointly: AGI up to $150,000
- Head of Household: AGI up to $112,500
Income Thresholds for Partial Payment
- Single Filers: AGI between $75,000 and $99,000
- Married Filing Jointly: AGI between $150,000 and $198,000
- Head of Household: AGI between $112,500 and $136,500
Additional Eligibility Requirements
- Must have a valid Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)
- Cannot be claimed as a dependent on someone else's tax return
- Must have filed a 2018 or 2019 tax return, OR be a Social Security recipient
How Does the HEROES Act Work?
The HEROES Act stimulus payment is a direct payment from the federal government to eligible Americans. The payment amount is determined by several factors:
- Base Payment: Each eligible adult receives a base payment of $1,200
- Spouse Payment: Married couples filing jointly receive an additional $1,200
- Dependent Payment: $1,200 for each qualifying dependent, up to 3 dependents ($3,600 maximum)
- Phase-Out: Payments are reduced for incomes above the threshold at a rate of $5 for every $100 over the limit
How Is My Payment Calculated?
The calculation follows a straightforward formula:
Base Payment = $1,200 (or $2,400 for married filing jointly)+ Dependent Payment = $1,200 x Number of Dependents (max 3)- Phase-out Reduction = (AGI - Threshold) x 5%= Total Stimulus Payment
Example Calculation
Let's calculate the stimulus payment for a married couple with 2 children and an AGI of $160,000:
- Base Payment: $2,400
- Dependent Payment: $1,200 x 2 = $2,400
- Total Before Phase-out: $4,800
- Amount Over Threshold: $160,000 - $150,000 = $10,000
- Phase-out Reduction: $10,000 x 5% = $500
- Final Payment: $4,800 - $500 = $4,300
HEROES Act vs CARES Act
The HEROES Act proposed several improvements over the original CARES Act stimulus payments:
| Feature | CARES Act | HEROES Act |
|---|---|---|
| Individual Payment | $1,200 | $1,200 |
| Married Couple Payment | $2,400 | $2,400 |
| Per Dependent | $500 | $1,200 |
| Dependent Age Limit | Under 17 | No limit |
| Maximum Dependents | Unlimited | 3 |
| ITIN Holders Eligible | No | Yes |
| Maximum Family Payment | Unlimited | $6,000 |
Understanding Income Phase-Out
The phase-out mechanism ensures that higher-income individuals receive reduced or no payments. The phase-out works as follows:
- For every $100 your AGI exceeds the income threshold, your payment is reduced by $5
- This is equivalent to a 5% reduction rate
- Once your income reaches the upper limit, you receive no payment
Phase-Out Example for Single Filers
A single filer with an AGI of $85,000:
- Amount over threshold: $85,000 - $75,000 = $10,000
- Reduction: $10,000 / 100 x $5 = $500
- Final payment: $1,200 - $500 = $700
Dependent Benefits Explained
One of the most significant improvements in the HEROES Act was the increased dependent payment:
Key Differences from CARES Act
- Payment Amount: $1,200 per dependent vs. $500 in CARES Act
- Age Limit: No age limit for dependents (CARES Act limited to under 17)
- Dependent Cap: Maximum of 3 dependents ($3,600 total)
- College Students: Now eligible as dependents
- Adult Dependents: Including elderly parents or disabled family members
Frequently Asked Questions
Is the HEROES Act stimulus taxable?
No, the proposed stimulus payment under the HEROES Act would not be considered taxable income. It was structured as a refundable tax credit, similar to the CARES Act payments.
Do I have to pay back the stimulus?
No, the stimulus payment is not a loan and does not need to be repaid. It is a one-time payment based on your eligibility.
What if I didn't file taxes?
Non-filers who receive Social Security, Railroad Retirement, or VA benefits would automatically receive payments. Others would need to use the IRS Non-Filer tool to claim their payment.
Can I receive a payment if I'm claimed as a dependent?
No, if you are claimed as a dependent on someone else's tax return, you cannot receive your own stimulus payment. However, the person claiming you may receive the dependent payment for you.
How long does it take to receive the payment?
Payments are typically processed within 1-2 weeks for those with direct deposit information on file with the IRS. Paper checks take longer, typically 2-4 weeks.
What if my income changed from 2019?
The payment is based on your most recent tax return (2018 or 2019). If your 2020 income is lower, you may be able to claim an additional credit when filing your 2020 taxes.