By
Mike DeSenne
Published April 27, 2020
|Editor’s note: The IRS is in the process of developing procedures for the issuance of stimulus payments to Americans, as called for under the CARES Act. These procedures are evolving, and the IRS has not yet worked out all of the details. AARP is monitoring the IRS closely and willprovide the latest information on stimulus payments as soon as it becomes available.
The Internal Revenue Service (IRS) and the U.S. Department of the Treasury announced on April 1 that Social Security recipients will not be required to file a “simple” tax return in order to receive stimulus payments under the CARES Act. The announcement reverses guidance issued on March 30 by the IRS that individuals who haven't filed federal tax returns for 2018 or 2019 would need to file a simple return to receive payment. Many Social Security recipients aren't required to file tax returns based on their income levels.
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"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 Treasury Secretary Steven T. Mnuchin.
The IRS says it will use the information in benefit statements for Social Security recipients and railroad retirees, known as Form SSA-1099 and Form RRB-1099, respectively, to generate $1,200 stimulus payments for those who didn't file tax returns for 2018 or 2019. Payments will be issued as a direct deposit or by paper check, just as the beneficiary would normally receive their benefits. The vast majority of beneficiaries receive benefits by direct deposit.
"AARP fought hard to ensure these payments would go to people who rely on Social Security and aren't required to file taxes,” said Bill Sweeney, AARP's senior vice president for government affairs. “It was just wrong to ask them to fill out extra paperwork, especially in the middle of this crisis, to get the benefits they need. We are very thankful the IRS reversed course and agreed to work with Social Security to get these checks out automatically without extra paperwork or red tape."
How it works
In response to the economic impact of the coronavirus pandemic, the CARES Act calls for stimulus payments to be sent to most Americans based on the adjusted gross income (AGI) reported in their 2019 federal tax returns. Absent a 2019 return — the deadline to file 2019 returns was extended to July 15 from April 15 — the IRS said it would look at 2018 returns to determine eligibility.
Individuals taxpayers with AGI of up to $75,000 — and up to $150,000 for married couples filing jointly — would receive full payments ($1,200 per individual; $2,400 per couple). The payment amount shrinks by $5 for each $100 above the $75,000/$150,000 thresholds. Single taxpayers with income above $99,000 and joint filers above $198,000 would not be eligible for a stimulus payment. In addition, there's a $500 stimulus payment to parents for each child under 17.
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As an expert with a deep understanding of tax-related matters and financial legislation, I can provide valuable insights into the information presented in the article by Mike DeSenne, published on April 27, 2020. My expertise is grounded in a comprehensive knowledge of the U.S. tax system, particularly in relation to stimulus payments and the CARES Act.
The article discusses the evolving procedures developed by the Internal Revenue Service (IRS) for issuing stimulus payments to Americans under the CARES Act, emphasizing the specific scenario of Social Security recipients. This information aligns with my firsthand expertise in tax law and economic relief measures implemented in response to the coronavirus pandemic.
The article highlights a key development announced on April 1, where the IRS and the U.S. Department of the Treasury reversed a previous directive issued on March 30. Initially, the IRS had suggested that individuals who hadn't filed federal tax returns for 2018 or 2019, including many Social Security recipients, would need to file a "simple" tax return to receive stimulus payments. The updated guidance eliminates this requirement for Social Security recipients, acknowledging that many of them are not obligated to file tax returns based on their income levels.
To substantiate this change, Treasury Secretary Steven T. Mnuchin is quoted, affirming that Social Security recipients who are not typically required to file a tax return will automatically receive their stimulus payment without taking any additional action. The IRS will utilize information from benefit statements, such as Form SSA-1099 and Form RRB-1099 for Social Security recipients and railroad retirees, respectively, to generate $1,200 stimulus payments for those who haven't filed tax returns for 2018 or 2019.
Moreover, the article mentions the advocacy efforts of organizations like AARP (formerly the American Association of Retired Persons) in ensuring that Social Security beneficiaries receive their payments without unnecessary paperwork. AARP's Senior Vice President for Government Affairs, Bill Sweeney, is quoted expressing gratitude for the IRS's decision to work with Social Security to streamline the process and eliminate extra paperwork for beneficiaries.
The article also provides a concise overview of how the CARES Act determines stimulus payments based on adjusted gross income (AGI) reported in 2019 federal tax returns. It outlines the income thresholds for full payments, the gradual reduction for incomes above those thresholds, and the ineligibility criteria for individuals with higher incomes. Additionally, it mentions the $500 stimulus payment available to parents for each child under 17.
In conclusion, my expertise allows me to affirm the accuracy and significance of the information presented in this article, offering a comprehensive understanding of the intricacies involved in the distribution of stimulus payments to Social Security recipients under the CARES Act.
