Updated: Apr 8
One of the major concerns that we at Connelly Law Offices had for our fiduciary clients who are retired and receiving Social Security benefits or Veterans benefits and those who are disabled and receiving Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) was the initial information that those who were not required to file any tax returns would need to do so in order to receive this money.
For many seniors who live alone or have not filed a tax return in years, this would have been a tremendous hardship on them in order to receive this money. A large number are not computer savvy nor do they have the ability to easily seek out assistance to file a return, especially given the current environment where senior centers and senior advocacy programs have been forced to close.
At our offices, we reached out to our Congressional delegations and made them aware of our concerns for these individuals. It was our position that those receiving these benefits already have a delivery system in place and we could not understand why another step was needed to make this happen. Well, there is good news to report.
The IRS website now states that they will use the information on 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 2018 or 2019. This includes senior citizens, Social Security recipients and railroad retirees who are not otherwise required to file a tax return.
So when will these checks be made available? A report in a Washington, DC newspaper states that a memo from the House Ways and Means Committee indicated that they would release up to 60 million checks beginning in mid-April. The tentative schedule, according to this memo, looks like this:
Week of April 13, 2020: 50 to 70 million checks distributed through direct deposit;
Week of May 4, 2020: The IRS will start sending paper stimulus checks;
Each week thereafter: Approximately 5 million paper checks will be issued each week.
However, those without direct deposit information on file may not receive a check until mid-August. But, according to the IRS website, they plan to remedy this situation by developing “a web-based portal for individuals to provide their banking information to the IRS online so that individuals can receive payments immediately as opposed to checks in the mail".
But another report that came out following this initial newspaper article states that checks will be sent out based on "financial need", specifically, those having the lowest income receiving money first. This report provided the following check release dates based on annual income:
April 24: for those earning less than $10,000 (direct deposit);
May 1: $10,0001 - $20,000 (direct deposit);
May 15: $20,001 - $40,000 (direct deposit);
May - September: paper checks sent in order from lowest income to highest income based on 2018 or 2019 tax information;
September 4: remaining checks sent;
September 11: checks sent to those who didn’t provide information to the IRS.
So which story is accurate? We are following this closely and will let you know once we have the information.
Finally, let’s review the eligibility guidelines one more time for those receiving the Economic Impact Payments:
Tax filers with adjusted gross income up to $75,000 for individuals and up to $150,000 for married couples filing joint returns will receive the full payment;
For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds;
Single filers with income exceeding $99,000 and $198,000 for joint filers with no children are not eligible;
Eligible taxpayers who filed tax returns for either 2019 or 2018 will automatically receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples and up to $500 for each qualifying child.
So once again, the good news is that the IRS will not require those who did not need to file an income tax return to do so in order to get the economic impact money. However there are still mixed reports as to how these payments will go out, so stay tuned.