• Tammy Hoang

No Filing Tax Return for Social Security Recipients to Get Stimulus Check after Backlash

The most exciting thing happened recently as the COVID-19 prevention precautions expand is that, the CARES Act came into law, signed by President Trump on March 27, 2020, to protect and support our US citizens.

Among other things, the CARES Act provided economic relief in the form of stimulus checks called "recovery rebates." The checks are $1,200 per adult - or $2,400 for married couples filing jointly - and an additional $500 per child. For many taxpayers, checks would be sent out based on your most recently filed tax return (2018 or 2019). Those who don't usually file a tax return because they rely on Social Security benefits (or RRB equivalent) were entitled to a check without having to do anything else: Congress has provided Treasury with a mechanism in the CARES Act for relying on forms 1099-SSA (or RRB equivalent) to issue checks.

Kelly Phillips Erb, Senior Contributor of Forbes News, posted about the guidance she addressed that included several sentences that seem contrary to the language in the CARES Act, including advice that "some seniors and others who typically do not file returns will need to submit a simple tax return to receive the stimulus payment."

With all the effort from Kelly Phillips Erb and activists, they made a difference. 41 Senators sent a letter to Treasury and the Social Security Administration for a correction. And, the question of whether additional returns were required was raised at the White House briefing last week. And Treasury changed course. On the evening of April 1, 2020, Treasury issued the following statement:

The U.S. Department of the Treasury and the Internal Revenue Service today announced that Social Security beneficiaries who are not typically required to file tax returns will not need to file an abbreviated tax return to receive an Economic Impact Payment. Instead, payments will be automatically deposited into their bank accounts.

“Social Security recipients who are not typically required to file a tax return do not need to take an action, and will receive their payment directly to their bank account,” said Secretary Steven T. Mnuchin.

The IRS will use the information on the Form SSA-1099 and Form RRB-1099 to generate $1,200 Economic Impact Payments to Social Security recipients who did not file tax returns in 2018 or 2019. Recipients will receive these payments as a direct deposit or by paper check, just as they would normally receive their benefits.

The IRS has also updated their website with the following statement:

The IRS will use the information on the Form SSA-1099 or Form RRB-1099 to generate Economic Impact Payments to recipients of benefits reflected in the Form SSA-1099 or Form RRB-1099 who are not required to file a tax return and did not file a return for 2019 [sic] or 2019. This includes senior citizens, Social Security recipients and railroad retirees who are not otherwise required to file a tax return.

In terms of the COVID-19, things are happening at a rapid-fire pace these days.

As tax updates become available, we'll keep you updated. Keep checking back for details.

The sign says it all. (Photo by Leonard Ortiz, Orange County Register/SCNG)

IRVINE TAX SOLUTIONS, your tax adviser for small and mid-size business in tax services at Irvine, Orange County, CA.


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