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Stimulus check will offer big boost to individuals – and Buffalo
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Stimulus check will offer big boost to individuals – and Buffalo

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WASHINGTON  It's not just a $1,400 check. 

For a family of four with an income of under $150,000, it's a sudden $5,600 boost.

And that means a massive influx of federal money  more than $1 billion  into the Buffalo Niagara economy.

The latest round of stimulus checks rank as the centerpiece of the $1.9 trillion American Rescue Plan that Congress finalized Wednesday. Most Americans, and the vast majority of Buffalo-area residents, will get the checks, probably within a few weeks.

Designed as part of the continuing federal effort to boost the economy amid the Covid-19 pandemic, the latest stimulus payment – the third in the past year – will no doubt make a lot of people happy, even though economists aren't sure that it is needed, or wise.

But the stimulus checks aren't the sort of thing that's up for debate in households that need the money. Here, then, are answers to some questions you may have about the payments.

Who is eligible for the payments?

Single taxpayers with incomes of up to $75,000 qualify for the full $1,400 payment, while couples who make up to $150,000 combined will get $2,800. On top of that, every one of their dependents – be they children, college students, elderly parents or disabled adult offspring – will get $1,400, too.

That makes the latest stimulus payment more generous than either the first round, which offered $1,200 for most taxpayers and $500 for dependents under age 17, or the second round, which delivered $600 payments to most taxpayers and dependents who were children.

Single taxpayers with adjusted gross incomes of between $75,000 and $80,000 will get smaller payments, as will couples with incomes of between $150,000 and $160,000. But people with incomes above those thresholds won't get any money.

How will the IRS determine who qualifies?

If you have already filed your 2020 tax return and the Internal Revenue Service has processed it, the agency will use that year's figures to determine whether you qualify for a stimulus payment. But if you have not yet filed your 2020 return, or if the IRS hasn't finished work on it, the tax agency will determine whether you qualify based on your 2019 return.

When will the payments arrive?

Just as they did for the first two stimulus payments last March and in December, the federal government plans to send the money quickly.

President Biden is expected to sign the bill – which he's been pushing for months – on Friday. Then the Internal Revenue Service will get to work delivering the payments, which will start going out almost immediately, White House Press Secretary Jen Psaki said earlier this week.

“Our focus right now is on getting this bill across the finish line, getting relief out to the American people, which we expect will happen by the end of the month,” Psaki said.

How many people in the Buffalo area will get the payments?

A lot.

It is difficult to estimate exactly how many people will receive checks, but IRS data offers some clues. In 2018, some 624,750 residents of Erie and Niagara counties lived in households with incomes of less than $75,000. That's 55% of Buffalo Niagara's population that year. Those people would clearly be eligible to get the checks if their family incomes remained steady or dropped in recent years.

But wait: 131,900 Erie County residents lived in families with incomes of between $75,000 and $100,000 in 2018. Unless they were single adults, those people would qualify for checks, too, so that's probably about 100,000 more local residents who would qualify.

The IRS does not break down how many families have incomes of less than $150,000, which makes it impossible to say exactly how many people will get the checks locally. But the IRS does report that 203,910 metro area residents lived in households with incomes between $100,000 and $200,000 – and it's safe to presume that the majority of them were in multi-person families with incomes of less than $150,000. So that's probably at least 100,000 or so additional locals who will qualify for checks.

That brings our ballpark estimate of the number of people getting $1,400 checks locally to 824,750 – or 73% of the region's population.

But that, too, could be too low of an estimate. In an interview with the Washington Post, Kyle Pomerleau of the conservative American Enterprise Institute said that about 84% of Americans would get the full $1,400 payment, while 6.8% would get a partial payment. Applying those estimates to our region, it would mean that more than 1 million Buffalo-area locals would get at least some stimulus money.

So how much money will be coming to the Buffalo area?

More than $1 billion. Using our conservative estimate that 824,750 locals will get $1,400 checks, the program would bring $1.15 billion to the region. Using Pomerleau's numbers, it is a $1.33 billion influx. And neither of those estimates includes people who get partial checks.

Rep. Brian Higgins, a Buffalo Democrat, predicts a late-year economic boom thanks to the vast amount of money the federal government is investing in stimulus efforts.

"It will be good for the individuals, because that money will get spent, and, therefore, it would be good for the larger economy because it will create demand," Higgins said.

But is this really a good idea?

Free money is popular, of course, but some economists wonder if the stimulus payments are the best way to spend more than $400 billion in federal funds amid the pandemic and the resulting recession.

"It isn't necessarily going to people who really need it," said George Palumbo, professor emeritus in the Department of Economics and Finance at Canisius College. "And for the people who've lost everything – their jobs, their businesses or their homes – $1,400 doesn't help.

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