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Stimulus Checks: True-Up and Safe-Harbor Costs

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  • David Splinter

Abstract

Stimulus checks were sent in response to recent US recessions. These checks grew from about $40 billion in the 2001 recession to $800 billion in the COVID era. Prior studies, however, ignored additional stimulus received upon filing tax returns (true-ups) and safe harbors that prevent possible stimulus repayment. Using population-level tax data, I estimate true-up and safe-harbor costs and decompose them by reasons, such as changes in income or the number of children. True-ups and safe harbors are costly. For the three rounds of COVID-era stimulus, true-ups and safe harbors cost more than $130 billion.

Suggested Citation

  • David Splinter, 2023. "Stimulus Checks: True-Up and Safe-Harbor Costs," National Tax Journal, University of Chicago Press, vol. 76(2), pages 349-366.
    • Handle: RePEc:ucp:nattax:doi:10.1086/724500
    DOI: 10.1086/724500
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    Cited by:

    1. Larrimore, Jeff & Mortenson, Jacob & Splinter, David, 2023. "Earnings business cycles: The Covid recession, recovery, and policy response," Journal of Public Economics, Elsevier, vol. 225(C).

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