As part of the CARES Act passed on March 27, 2020, many Hoosiers can expect to receive a direct support payment. This will include many elder and disabled Hoosiers who are receiving Medicaid, Supplemental Security Income (SSI), SNAP, and other public benefits.
Because these payments will be structured as tax refunds (even if you paid no taxes), they will not count as income for Medicaid, SSI, and other federal public benefit programs. The payments will not count as a resource (asset) for these programs for 12 months after receipt. As a result, the payments will not immediately interfere with someone’s eligibility for Medicaid, SSI, and other federal public benefits programs.
Here are some other answers to commonly asked questions regarding these payments:
Who is eligible for a recovery rebate?
All U.S. residents with adjusted gross income under $75,000 ($112,500 for head of household and $150,000 married), who are not the dependent of another taxpayer and have a work-eligible Social Security Number, are eligible for the full $1,200 ($2,400 married) rebate. They are also eligible for an additional $500 per child. A typical family of four is eligible for a $3,400 recovery rebate.
The rebate amount is reduced by $5 for each $100 that a taxpayer’s income exceeds the phase-out threshold. The amount is completely phased-out for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children. For a typical family of four, the amount is completely phased out for those with adjusted gross incomes exceeding $218,000.
When will I get my payment?
Treasury Secretary Steven Mnuchin has said he expects most people to get their payment of April 17.
Are seniors and those with disabilities whose only income is from Social Security or a veteran whose only income is a veterans’ disability payment eligible?
Yes, as long as they are not the dependent of another taxpayer. The bill also provides IRS with additional tools to locate and provide rebates to low-income seniors who normally do not file a tax return by allowing them to base a rebate on Form SSA-1099, Social Security Benefit Statement or Form RRB-1099, which is the equivalent of the Social Security statement for Railroad Employees. However, seniors are still encouraged to file their 2019 tax return to ensure they receive their recovery rebate as quickly as possible.
I am eligible for a rebate, what do I have to do to receive it?
For the vast majority of Americans, no action on their part will be required to receive a rebate check since the IRS will use a taxpayer’s 2019 tax return if filed or their 2018 return if they haven’t filed their 2019 return. This includes many individuals with very low income who file a tax return despite not owing any tax in order to take advantage of the refundable Earned Income Tax Credit and Child Tax Credit.
What should I do if I did not file a tax return for 2019 or 2018?
The best way to ensure you receive a recovery rebate is to file a 2019 tax return if you have not already done so. This could be accomplished for free online from home using the IRS Free file program (https://www.irs.gov/filing/free-file-do-yourfederal-taxes-for-free). The bill also instructs the IRS to engage in a public campaign to alert all individuals of their eligibility for the rebate and how to receive it if they have not filed either a 2019 or 2018 tax return.
Will I get a check in the mail?
Most individuals who file the tax returns electronically or receive Social Security payments will have their check electronically deposited into their account.
Does the payment count as income?
No. The payments are not taxable income.
If I have a past due debt to a federal or state agency, or owe back taxes, will my rebate be reduced?
No, the bill turns off nearly all administrative offsets that ordinarily may reduce tax refunds for individuals who have past tax debts, or who are behind on other payments to federal or state governments, including student loan payments. The only administrative offset that will be enforced applies to those who have past due child support payments that the states have reported to the Treasury Department.
Jeff is Certified as an Elder Law Attorney (CELA) by the National Elder Law Foundation, a distinction held by only a handful of lawyers in Indiana. For almost 20 years, he has focused on elder law, estate planning, long-term care planning, Medicaid planning, Veterans Affairs benefits planning, special needs planning, guardianships, and estate administration.