On Social Security? You may not automatically get stimulus check
Many Americans counting on federal stimulus checks to help them stay afloat financially during the coronavirus pandemic may be disappointed when the payments aren’t directly deposited to their bank accounts later this month. The reason: People who typically don’t file tax returns — including millions of seniors on Social Security — must file a “simple tax return” to receive the check, according to the IRS.
“What [the IRS is] now saying is that if you are a Social Security recipient, you won’t automatically get a payment,” said Howard Gleckman, senior fellow at the Tax Policy Center. “You will have to file a return.”
The IRS on Monday provided more details about what Americans need to know about receiving a government check to help ease the massive blow from the virus on the economy. The payments amount to $1,200 for individuals who earn less than $75,000 per year and $500 per child younger than 17.
The tax agency noted that people who don’t typically file a tax return “will need to file a simple tax return” to get their check, which impacts millions of seniors, low-income taxpayers, some veterans and individuals with disabilities.
Altogether, that could affect 15 million Social Security recipients who don’t file tax returns because they aren’t required to do so, according to Chuck Marr, senior director of federal tax policy for the Center on Budget and Policy Priorities. It’s also unnecessary, Marr said, noting in a blog post that “the federal government already has all of the information it needs to provide these payments without a tax return.”
Seniors who rely on Social Security for their sole source of income don’t have to file tax returns, according to TurboTax.
It’s unclear whether seniors who fail to file a simple tax return will forfeit their stimulus checks or if they’ll face delays or other issues. On social media, some consumers expressed confusion over the requirement, but they will need to wait for more guidance. The IRS is working through the logistics of the stimulus payments and will issue more guidance in coming days, a spokesman said.
Separately, the Treasury department told CBS MoneyWatch that it’s examining whether seniors who don’t file the simple tax return will still receive stimulus checks, and that it hopes to have more information available in the next day or two.
Simple tax return
The IRS says it will soon post information (at this site) on how to file a simple 2019 tax return. The agency said the forms will ask for a person’s filing status, number of dependents and direct-deposit bank account information.
The guidance adds a twist to getting the stimulus checks to as many low- and moderate-income Americans as possible, including Social Security recipients.
Most Americans don’t need to do anything to receive a check, given that the IRS is relying on 2018 and 2019 tax returns to find household income — which determines the amount of an individual’s stimulus check — and direct deposit information for bank accounts.
Millions left out?
The new guidelines could cause millions of seniors to miss out on stimulus payments, based on what happened in 2008 when the government issued stimulus checks to help offset the damage households suffered during the Great Recession. At the time, lawmakers required millions of people who don’t typically file tax returns, including some seniors and veterans, to file annual returns.
But about 3.5 million of those Americans didn’t file the required returns and lost out on the stimulus payments, Marr noted in his post.
Lawmakers including Senators Maggie Hassan of New Hampshire and Sherrod Brown of Ohio, both Democrats, expressed alarm about the new guidance, saying in a letter on Wednesday to the IRS and Treasury that it will “place a significant burden on retired seniors and individuals who experience disabilities.”
The lawmakers are urging the IRS and Treasury to make sure the payments “are automatically sent to vulnerable seniors” and disabled Americans without them needing to file a tax return, especially given that the IRS’ Volunteer Income Tax Assistance and Tax Counseling for the Elderly has been closed due to the coronavirus.
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