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Second stimulus checks are on the way: Here's who will get one and how quickly

Direct deposits began Tuesday, while paper checks will start going out in the mail on Wednesday.

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US Secretary of the Treasury Steven Mnuchin testifies during a hearing before the Congressional Oversight Commission on December 10, 2020 on Capitol Hill in Washington, DC.
Alex Wong | AFP | Getty Images

Second stimulus checks are on the way to Americans.

Treasury Secretary Steven Mnuchin tweeted Tuesday evening that initial direct deposit payments could begin arriving as early as that day. Paper checks will begin going out Wednesday.

The news comes just days after President Trump signed the latest Covid-19 relief package into law. The $900 billion deal includes second stimulus checks of up to $600 per adult — down from the $1,200 payments included in the first stimulus package — and up to $600 per child.

"Treasury and the IRS are working with unprecedented speed to issue a second round of Economic Impact Payments to eligible Americans and their families," Mnuchin said in a Treasury announcement. "These payments are an integral part of our commitment to providing vital additional economic relief to the American people during this unprecedented time."

How quickly stimulus payments will arrive

Most payments will arrive via direct deposit over the next week, the IRS said in an announcement Tuesday. Paper checks began going out Wednesday, and consumers receiving a paper check or debit card should receive their payment by the end of January.

"There is no action required by eligible individuals to receive this second payment," the agency said. Consumers should be able to use the IRS Get My Payment tool to track their payments later this week.

Who can expect a stimulus payment and for how much

As was the case with the CARES Act, the government will base the amount you receive on the adjusted gross income, or your income minus certain deductions, that you reported on your most recent taxes. If you didn't file 2019 taxes, they'll look at what you reported for 2018. 

Individuals who earn up to $75,000 a year will be eligible for the full $600 relief payment. If your income is more than $75,000 but less than $87,000, you're eligible for a reduced payment. 

Married couples that file jointly are eligible for a $1,200 check, as long as your combined adjusted gross income is less than $150,000 a year. Payments phase out for couples with incomes between $150,000 and $174,000. 

As a parent, you may also receive up to an additional $600 per child, no matter your filing status. The CARES Act rules, which limited qualified dependents to those under 17, are still in place.

Check out Grow's calculator to crunch the numbers on how much your family might get.

Although the Senate tabled legislation that would increase the stimulus payments to $2,000, should legislation pass that increases the amount, "Economic Impact Payments that have been issued will be topped up," a senior official at the Treasury Department told CNBC

VIDEO1:5901:59
Suze Orman on how to use a second stimulus check

Video by Helen Zhao

Smart ways to use a second stimulus payment

Experts say the best way to use the funds from your second stimulus check depends on your financial situation.

Focus on moves that help improve your financial security, recommends financial expert Suze Orman, bestselling author of "Women & Money," and the host of the "Women & Money" podcast. Namely, build up your emergency fund, she recently told Grow.

If you're lucky enough to be secure in both your employment and your finances, that second check may also offer opportunities to pay down debt, invest, or put aside money for long-term goals like retirement. 

"The most important building block so that you can grow, financially speaking, is that you have a financial foundation you can stand on," she says. "So when something goes wrong, it doesn't collapse."

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