WASHINGTON — The Trump administration backtracked Wednesday evening on new rules and said Social Security recipients won’t have to file a tax return to receive a stimulus payment.
The move is a response to pressure from elderly Americans and senators to rescind guidance from Monday that said seniors needed to file a return to get the checks of up to $1,200, even if they weren’t ordinarily required to file taxes.
“We want to ensure that our senior citizens, individuals with disabilities, and low-income Americans receive Economic Impact Payments quickly and without undue burden,” Treasury Secretary Steven Mnuchin. “Social Security recipients who are not typically required to file a tax return need to take no action, and will receive their payment directly to their bank account.”
Treasury said the IRS will use existing SSA-1099 and RRB-1099 forms to make the payments to seniors. They’ll get a direct deposit if there is a bank account on file; otherwise they’ll receive a check in the mail.
Americans who make less than $99,000 — and couples earning under $198,000 — are eligible under the new law for coronavirus relief payments.
The reversal came after more than three dozen Democratic senators called on the Trump administration to rescind or clarify that IRS guidance, as NBC News first reported. They argued it would “place a significant burden on retired seniors and individuals who experience disabilities,” especially at a time when tax filing help for low-income people is hard to come by.
The confusion originated from complicated language in the CARES Act, the $2 trillion coronavirus stimulus bill enacted last week, over how the government would determine whether recipients were below the income cap needed to qualify for a full payment.
Buried in the legislation was wording that said that while a person’s 2019 or 2018 federal tax return would be used to calculate their income, the IRS could use an SSA-1099 form for those who didn’t file taxes in either of those years.
An SSA-1099 is a form the Social Security Administration sends yearly to people who receive Social Security retirement or disability benefits, including a wide swath of senior citizens who have no other income and don’t normally file tax returns.
But a question-and-answer page published on Monday by on the IRS website said that seniors and low-income individuals “will need to file a simple tax return to receive an economic impact payment” under the coronavirus package. It specifically mentioned Social Security recipients in that category, and made no mention of using the Social Security form instead, leading to widespread uncertainty and alarm from seniors.
Late Wednesday, as Mnuchin’s statement was released, the IRS updated its online guidance to say that the Social Security form would indeed be used to calculate income eligibility for those without tax returns. It added, “This includes senior citizens, Social Security recipients and railroad retirees who are not otherwise required to file a tax return.”