Pandemic Rebate Payments Still Haven’t Reached Many Who Need Them Most

By Ashley Burnside

While many Americans received federal aid to help them get by during the economic crisis, 12 million people are still waiting for this drastically needed relief. Congress enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March, which provided economic impact rebate payments to eligible Americans. These one-time payments provided families struggling to make ends meet with cash they could use for rent, increasing utility costs, and other everyday expenses. The U.S. Internal Revenue Service (IRS) distributed most of these payments efficiently. But people with the lowest incomes or who don’t have bank accounts or internet access have faced confusion and delays. In some cases, they have not received their payments yet. Thankfully, outreach campaigns can provide a solution if we act soon.

To get a stimulus payment—unless a person receives certain federal benefits like Supplemental Security Income (SSI)—you must have filed taxes in either 2018 or 2019. Otherwise, people must complete a non-filer form on the IRS website by October 15.

This marks the first problem: the need for people to file a tax document who usually don’t have to. People with the lowest incomes are not required to file tax returns. They have little financial incentive to do so, because they would receive such a small Earned Income Tax Credit (EITC) refund. As a result, about 12 million people—who likely need it the most—risk not getting their stimulus payments because they didn’t file taxes. Due to racism and ongoing discrimination in areas such as employment, this group of non-filers is disproportionately people of color. In a mid-May survey, over 73 percent of white respondents reported that someone in their household received a stimulus payment compared to only 57 percent of Black respondents, 55 percent of Asian American respondents, and 56 percent of Hispanic respondents. 

People living in poverty can face hurdles with the filing process itself. Anyone who hasn’t filed taxes must complete the non-filer form to get a payment. But this form can only be submitted online, a barrier for many families with low incomes. Over four in ten households with an income of less than $30,000 per year don’t have broadband access. 

Additionally, anyone who is unbanked (which includes 14 percent of people with incomes below $40,000), must wait for it to be mailed because the IRS can’t deposit their payment electronically without an account. This caused great delays for unbanked people and has posed additional barriers for those who are homeless or living in temporary housing. The requirement to have a bank account is often a barrier for the Black community. Banks charge higher fees to open an account in predominantly Black neighborhoods, and customers may face racial bias among bank tellers. People may also live in “bank deserts,” where no bank branches are nearby. Fourteen percent of Black adults are unbanked, compared to just 3 percent of white adults, according to the Federal Reserve

While stimulus payments reached many people quickly, many others who need payments the most faced delays: families with the lowest incomes, communities of color, and those without internet access or a bank account. State agencies and community organizations should create outreach campaigns to help these non-filers get their rebate payment by the October 15 deadline. For future payments, the IRS should make them automatic for people who already receive public benefits. The IRS should also provide additional options for those without internet access to complete the required paperwork. As the economic crisis drags on, this assistance will remain vital to meeting the basic needs of families earning low wages—including many people of color—who would otherwise face poverty.