By Sally P. Schreiber, J.D. for journalofaccountancy.com
Treasury announced Wednesday that Social Security and Railroad Retirement benefit recipients will receive economic stimulus payments automatically without having to file a tax return. On Monday, the IRS had said that only taxpayers who had filed tax returns for 2018 or 2019 would receive their payments automatically. (See prior coverage here.) Many Social Security and Railroad Retirement beneficiaries make too little money to be required to file a tax return and may not have filed a return for either year.
The economic stimulus payments, or recovery rebates, were enacted by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136. Eligible individuals will receive an economic impact payment of up to $1,200 for individuals or $2,400 for married couples. Parents also receive $500 for each qualifying child. The payments phase out for individuals with adjusted gross income over $150,000 for married taxpayers filing jointly, $112,500 for taxpayers who file as head of household, and $75,000 for other individuals.
For Social Security or Railroad Retirement beneficiaries who did not file a federal income tax return for 2018 or 2019, the IRS will use the information provided to the Social Security Administration on Form SSA-1099, Social Security Benefits Statement, or to the Railroad Retirement Board on Form RRB-1099, Railroad Retirement Benefits Statement, to send the stimulus payment automatically to each beneficiary. The payment will be sent by direct deposit or by paper check depending on how therecipient receives his or her Social Security or Railroad Retirement benefit.
For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page.
— Sally P. Schreiber, J.D., (Sally.Schreiber@aicpa-cima.com) is a JofA senior editor.