The Stimulus Check Confusion for Seniors and the Disabled

At Connelly Law Offices, our staff has been fielding calls from many of our elderly and disabled clients with questions about the stimulus checks and how they will be delivered. We will try to answer this question but unfortunately, all the answers are still not available and even worse, we have found some conflicting information on this. But first, let's briefly take a look at this package.

President Trump signs the CARES Act

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security (CARES) Act which includes a promise of stimulus checks for most Americans that need assistance during this difficult time period. The check amount for adults is $1,200 each (so $2,400 for couples filing jointly) and children $500 each (children are qualifying children according to IRS rules claimed in the household under 17 years old). A person who is claimed as a dependent on someone else's return is not eligible.

This money is tied to a person's earnings, with the benefit phaseout starting at:

  • $75,000 in adjusted gross income for singles

  • $112,500 for heads of household

  • $150,000 for married couples filing jointly

  • Completely phase out at $99,000 for singles and $198,000 for couples (with no children)

When Will It Arrive?

Yesterday (March 30, 2020), the IRS said that the distribution of stimulus payments would begin “in the next three weeks” and Treasury Secretary Steve Mnuchin has said they hope to start issuing checks by mid-April, "with the remainder of the checks to be mailed by the end of May."

How Will It Arrive?

The current bill as written requires individuals to have filed a 2019 tax return or a 2018 return if they haven't filed their 2019 return yet by the time the checks go out, and it would send the benefit checks to the address listed on the tax return or to the direct deposit information on their last return. But what if that has changed? According to the IRS, it’s developing what they call a “web-based portal” where individuals can upload their direct deposit information.

Now, the Big Question

Here comes the most confusing part of this for many of our elderly and disabled clients and what most of the calls have been about -- if they did not need to file a tax return because their income was so low for the past several years, how will they get their money? After all, the IRS site states that they will use the tax returns and direct deposit information from their 2019 tax return or if this has not been filed yet their 2018 return. What should they do?

This is where things begin to turn really fuzzy. The IRS website says that in the case of those receiving Social Security, Supplemental Security Income (SSI), veterans benefits, or disability (SSDI) payments, they will be required to file a "simple tax return" in order to receive a stimulus check. But the IRS is not clear as to what defines a “simple tax return”.

Seniors may struggle to complete a "simple return"

This is causing quite a concern, as it should, for the elderly and disabled. Many do not have access to computers or the knowledge of completing their own "simple return" or filing it electronically or even physically taking it to the mailbox. In that case, will they be forced to pay a preparer to do this for them? Given the "social distancing issue" and "stay at home order", how will they even be able to get this done? And agencies that have offered assistance to seniors in the past may still be understaffed and overwhelmed if the "stay at home" order continues.

Today, yet another news story added more confusion to this by stating that the government will automatically send the check to social security and veteran recipients using information tied to their social security or veterans' benefit accounts, meaning that they will not have to file a return. This makes enormous sense, but the IRS is saying this is not the case. And a check of the IRS website shortly before writing this blog still states that a "simple tax return" will need to be filed.

The Bottom Line

The bottom line is this, a delivery system is already in place with the federal government to ensure that those receiving social security retirement, social security disability, supplemental security income, or veteran's benefits receive their payments, whether it be through their own financial institution or with a debit card called 'Direct Express', used for those without a bank.

By requiring those who have not filed a tax return in years to suddenly learn how to navigate a system that has changed drastically is counter-intuitive and forces those who are most vulnerable to this virus out of the house to seek help in meeting the IRS guidelines in order to receive this supplement check.

At Connelly Law, we will stay on top of this situation for our elderly and disabled clients and let you know what the final resolution is. In the meantime, we urge you to contact your Senators and Representatives and let them know that filing a "simple tax return" is not as "simple" as it sounds and indeed creates a hardship for someone who is elderly or disabled.

Let them know that there is no reason that these checks can't be tied to their current system of payment. We will let them know as well. Stay tuned.

Click on the photo below to find out who your member of congress is and tell them that this payment should be tied to the social security and veterans benefit accounts that are already active.

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