After Controversy, Treasury Confirms Social Security Recipients Don’t Need To File A Tax Return To Get A Stimulus Check

Winston Churchill was alleged to have said, “You can depend upon the Americans to do the right thing. But only after they have exhausted every other possibility.”

Today, Americans did the right thing.

On March 27, 2020, President Trump signed the CARES Act into law. Among other things, the CARES Act provided economic relief in the form of stimulus checks called “recovery rebates.” The checks are $1,200 per adult – or $2,400 for married couples filing jointly – and an additional $500 per child. For many taxpayers, checks would be sent out based on your most recently filed tax return (2018 or 2019). Those who don’t usually file a tax return because they rely on Social Security benefits (or RRB equivalent) were entitled to a check without having to do anything else: Congress has provided Treasury with a mechanism in the CARES Act for relying on forms 1099-SSA (or RRB equivalent) to issue checks. 

Relying on that language, I wrote about it – as did many others – and for a few days, the knowledge that they didn’t have to do anything further for benefits provided a sense of relief for seniors. But that changed with a single notice from the Internal Revenue Service (IRS).

On March 31, 2020, I posted this story about the notice – which purported to explain the necessary steps for some folks to receive stimulus checks. The guidance included several sentences that seem contrary to the language in the CARES Act, including advice that “some seniors and others who typically do not file returns will need to submit a simple tax return to receive the stimulus payment.”

I was shocked that Treasury and the IRS appeared to be taking a position that was so different from what was in the CARES Act. So I made some phone calls and emails seeking further clarification. I reached out to the IRS, the White House, Senate Majority Leader Mitch McConnell (R-KY), Speaker of the House Nancy Pelosi (D-CA), and others in Congress about the language in the Act. Practically nobody in DC wanted to talk about it.

But seniors (including vets) and the disabled – and those that care for them – were angry. They sent me emails begging for help. I followed up with some of their stories in this piece. 

I try not to take sides in my pieces. I just want to deliver the facts to you. But it was hard not to take sides on this one. Because the facts were that this result – asking our seniors and the disabled to take extra steps to file tax returns during a pandemic – wasn’t the right one. So, in the article, I urged folks who wanted to call attention to this issue to reach out to Congress. And you did. I know that you did because you messaged, emailed, and tweeted me that you had. And your efforts paid off.

You made a difference. Earlier today, 41 Senators sent a letter to Treasury and the Social Security Administration asking for a correction. And, the question of whether additional returns were required was raised at the White House coronavirus briefing today.

And Treasury changed course. On the evening of April 1, 2020, Treasury issued the following statement:

The U.S. Department of the Treasury and the Internal Revenue Service today announced that Social Security beneficiaries who are not typically required to file tax returns will not need to file an abbreviated tax return to receive an Economic Impact Payment. Instead, payments will be automatically deposited into their bank accounts.  

“We want to ensure that our senior citizens, individuals with disabilities, and low-income Americans receive Economic Impact Payments quickly and without undue burden,” said Secretary Steven T. 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.”

The IRS will use the information on the Form SSA-1099 and Form RRB-1099 to generate $1,200 Economic Impact Payments to Social Security recipients who did not file tax returns in 2018 or 2019. Recipients will receive these payments as a direct deposit or by paper check, just as they would normally receive their benefits.

The IRS has also updated their website with the following statement:

The IRS will use the information on the Form SSA-1099 or Form RRB-1099 to generate Economic Impact Payments to recipients of benefits reflected in the Form SSA-1099 or Form RRB-1099 who are not required to file a tax return and did not file a return for 2019 or 2019. This includes senior citizens, Social Security recipients and railroad retirees who are not otherwise required to file a tax return.

So, you did it. You made your voices heard. And in the middle of a pretty remarkable time, you proved that as a nation, we are stronger together. 

Things are happening at a rapid-fire pace these days. As tax updates become available, we’ll keep you updated. Keep checking back for details.