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According to the Social Security Administration, approximately 70 million Americans will see a 1.3% increase in their Social Security benefits and Supplemental Security Income (SSI) payments in 2021. The maximum Social Security retirement benefit for those retiring at full retirement age will be $3,148/month, while the average check will be $1,543/month for individuals and $2,596/month for couples. The standard SSI payment will be $794/month for individuals and $1,191/month for couples.

The increased payment for Social Security beneficiaries will begin in January 2021. Increased payments to SSI beneficiaries will begin on December 31, 2020.

Cost Of Living Adjustments

Why the increase? Federal benefit rates increase when the cost-of-living rises, as measured by the Department of Labor’s Consumer Price Index (CPI-W). The CPI-W measures the cost of goods and services – in other words, your cost of living. If inflation increases, the CPI-W also goes up signaling that it costs more to pay bills overall. An increase in benefits – often referred to as a cost-of-living adjustment (COLA) – is intended to helps to offset these costs.

The Social Security Administration will mail COLA notices throughout the month of December to retirement, survivors, and disability beneficiaries, SSI recipients, and representative payees. But, if you want to know your new benefit amount sooner, you can check online using the Message Center in your my Social Security account – as soon as early December. If you don’t have an account yet, you must create one by November 18, 2020 to receive the 2021 COLA notice online.

Payroll Tax Changes

Also changing? The maximum amount of earnings subject to the Social Security tax will increase to $142,800. That’s a pretty big shift: it was $137,700 in 2020. That means that wages up to $142,800 will be subject to Social Security tax. Social Security tax is 7.65% for employees with a matching contribution from employers (self-employed persons are responsible for the entire 13.3%).

So, if you make $142,801, only $142,800 is subject to tax, but the extra dollar is not subject to Social Security tax. And if you make $1,142,800, only $142,800 is subject to tax, but the extra million is not subject to Social Security tax. All wages remain subject to Medicare taxes

Retirement Earnings Limits

The earnings limit for workers who are younger than your normal retirement age will increase to $18,960. That means that the Social Security Administration will deduct $1 from benefits for each $2 earned over $18,960 until the month you hit your normal retirement age.

The earnings limit for people reaching their normal retirement age in 2021 will increase to $50,520. That means that the Social Security Administration will deduct $1 from benefits for each $3 earned over $50,520 until the month you hit your normal retirement age.

There is no limit on earnings for workers who are “full” retirement age or older for the entire year.

If you were born after 1960, your normal retirement age is 67. If you were born before 1960, you can check by using the retirement age chart here.

The retirement earnings test applies only to people below the normal retirement age. The Social Security Administration withholds benefits if your earnings exceed the retirement earnings test exempt amount, and if you are under the normal retirement age. Once you reach your normal retirement age, your monthly benefit will be increased permanently to account for the months in which benefits were withheld.

You can see all of the COLA adjustments here (downloads as a PDF).

Kelly acknowledges the statistics of life expectancy rapidly increasing, which seemingly results in more sandwich generation households. Sandwich generations are when a parent generation with children, also find themselves caring for elderly. Ultimately, these situations can lead to many challenges, including financial and emotional concerns, and everything else that comes with juggling two generations. This week’s podcast is incredibly beneficial in providing guidance, tips, and advice to help navigate the journey of living in sandwich generations.

Learn Everything You Need to Know from the Elder Law Expert

Kelly invites Victor Medina to the show this week. Victor is an expert with elder law matters. He is a nationally recognized estate planning elder law attorney, focusing on estate planning, asset protection, retirement distributions and proactive planning. Victor is the founder of Medina Law group, a family solution-based law firm. Victor offers services to help families properly plan and guide their way through taking care of multiple generations at once. Tune in to hear all the important and often overlooked matters and advice that Kelly and Victor cover this week.

Listen to Kelly and Victor discuss Planning and Managing taking care of two generations, and more such as:

  •  Balancing Finances in Sandwich Generations  
  • Advice for Anticipated Long-term Care Facilities
  • The Importance of Proper Planning and Help
  • How Flexibility and Choice Leads to Beneficial Outcomes
  • Truths on Home Health Care Fears
  • Suitably Navigating Your Options
  • Handling Premature Promises  
  • The Danger from Joining Generations
  • Sacrificing for Spouses During Last Moments
  • How to Elongate and Make the Most of This Journey
  • Coping with the Burdens
  • Think Broadly when Choosing Geography and Counseling
  • Guidance on Comingling and Keeping Matters Squared Away Separately
  • Defending and Documenting is Key
  • How to Work Outside of Paperwork
  • How to Selflessly Instruct Timely Affairs

More About Kelly Phillips Erb:

Kelly is the creator and host of the new Taxgirl podcast series. Kelly is a practicing tax attorney with considerable experience and knowledge. She works with taxpayers like you every day. One of the things that she does is help folks out of tax jams, and hopefully, keep others from getting into them.

Links Mentioned:

Kelly’s Website – Taxgirl

Medina Law Group

Victor Medina – LinkedIn

AATEELA

Empowering Women in Retirement – Book by Victor Medina

New York Times Survey – Caring for Children and Elderly

Make it Last – Victor’s Podcast

Did you take out a required minimum distribution (RMD) this year and want to put it back?

As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), RMDs are waived for 2020, including for inherited IRAs. The CARES waiver includes RMDs for individuals who turned age 70 ½ in 2019 and took their first RMD in 2020. If that seems like an odd add – and a conflict – remember that the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), which became law on December 20, 2019, also made significant changes to the RMD rules. It changed the age requirements to require withdrawal if you reached age 70 ½ in 2020 or later: in that case, you must take your first RMD by April 1 of the year after you reach 72. But, if you reached the age of 70½ in 2019, the old rules applied, and you were supposed to take your first RMD by April 1, 2020.

Supposed to. But the CARES Act pushes it off even more (except for those with Roth IRAs, but that doesn’t matter since Roth IRAs do not require withdrawals until after the owner’s death). 

But what if you’ve already taken your RMD? The Internal Revenue Service (IRS) is now reminding IRA owners, beneficiaries or workplace retirement plan participants who received an RMD this year that they have until August 31 to rollover or repay the distribution to avoid paying taxes.

Yep. Since the RMD rules are suspended, RMDs taken in 2020 are considered eligible for rollover. Therefore, RMDs can be rolled over to another IRA or qualified retirement plan, or returned to the original plan. (There are some restrictions, including a one rollover per 12-month period limit and the exclusion of inherited IRAs on rollovers, so check out IRS Notice 2020-51 (downloads as a PDF) for more information.)

The CARES Act provisions apply to most retirement plans, including traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k) plans, 403(b) plans, 457(b) plans, profit-sharing plans, and other defined-contribution plans. But the RMD suspension does not apply to qualified defined benefit plans (like pension plans).

You can find out more about RMDs here.

It’s my annual Taxes from A to Z series! If you’re wondering how to figure basis for cryptocurrency or whether you can claim home office expenses during COVID, you won’t want to miss a single letter.

R is for Required Minimum Distributions.

Generally, the goal of a retirement account is to defer tax – and let the account grow – for as long as possible. But at some point, you normally have to start taking withdrawals from your IRA, SIMPLE IRA, SEP IRA, or retirement plan account when you reach age 70½ (with a Roth, you don’t have to take withdrawals until after the account owner’s death). Those mandatory withdrawals are called required minimum distributions (RMDs).

The amount of your RMD is figured by taking the account balance as of the end of the immediately preceding calendar year and dividing it by a number of years typically based on your life expectancy (some exceptions apply). You have to take at least that much each year. If you don’t take your RMD, or you don’t take enough, you’ll be subject to an excise tax. You can, however, withdraw more if you want to.

Withdrawals are taxable. That means that they will be included in your taxable income (except for any part that was taxed earlier) or that can be received tax-free (such as qualified distributions from designated Roth accounts). 

For IRAs, the beginning date for your first RMD is April 1 of the year following the calendar year in which you reach age 70½ if you were born before July 1, 1949, or April 1 of the year following the calendar year in which you reach age 72 if you were born after Jun 30, 1949. For 401(k) and 403(b) plans, profit-sharing plans, or other defined contribution plans, the beginning date for your first RMD is April 1 of the year in which you reach age 70½ if you were born before July 1, 1949, or April 1 of the year following the calendar year in which you reach age 72 if you were born after Jun 30, 1949 (or the date that you retire, if later, and if your plan allows). For each year after your required beginning date, you must withdraw your RMD by December 31.

For purposes of calculating your age, you’re considered to have reached age 70½ on the date that is 6 calendar months after your 70th birthday.

There are some important changes to RMDs in 2020. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) waives RMD payments for 2020, including for inherited IRAs. The waiver includes RMDs for individuals who turned age 70 ½ in 2019 and took their first RMD in 2020.

If you have already taken your RMD in 2020, you can choose to return it or roll it over:

  • If you have already received an RMD in 2020, you can repay the distribution to the distributing IRA no later than August 31, 2020, to avoid paying taxes on that distribution; OR
  • Since the RMD rules are suspended, RMDs taken in 2020 are considered eligible for rollover. Therefore, RMDs can be rolled over to another IRA or qualified retirement plan, or returned to the original plan. (There are some restrictions, including a one rollover per 12-month period limit and the exclusion of inherited IRAs on rollovers, so check out IRS Notice 2020-51 (PDF) for more information.)

The RMD suspension does not apply to qualified defined benefit plans (like pension plans).

More information on the CARES Act and retirement plans can be found on the IRS website at Coronavirus-related relief for retirement plans and IRAs questions and answers.

You can find the rest of the series here:

When the stimulus check details were announced, I noticed a sharp uptick in questions about Social Security retirement, Social Security Disability (SSDI) and Supplemental Security Income (SSI) benefits. Mainly, folks wondered, “What’s the difference?”

Here’s a quick breakdown.

What are Social Security retirement benefits?

Wages and self-employment income are subject to Social Security and Medicare taxes. Together, Social Security and Medicare taxes are known as FICA (Federal Insurance Contributions Act) taxes and are taken right out of your paycheck. Taxes on self-employment income are separately referred to as SECA (Self-Employment Contributions Act) taxes since self-employed persons pay both the employee and employer contributions.

If you’re employed, you pay Social Security tax (6.2%) as the employee, and your employer also pays the same rate of tax (6.2%); again, if you’re self-employed, you pay both portions.

Unlike Medicare, Social Security taxes are subject to a wage cap. In other words, you pay Social Security taxes on your earnings until you hit a magic number. After that, your wages are no longer subject to Social Security taxes. For 2020 that magic number is $137,700. That means that whether you made $1,000 or $100,000, you will pay Social Security taxes on that income. But if you earn $137,701? You’ll pay Social Security taxes on $137,700, but not on the extra dollar. And if you earn $1,137,700? You’ll pay Social Security taxes on $137,700 but not on the extra million.

Your employer collects those Social Security payments and remits them to the government on your behalf (or you pay them directly if you’re self-employed). These taxes are sometimes referred to as “trust fund” taxes and are credited towards your retirement benefits.

The number of credits you need to get retirement benefits depends on when you were born: If you were born in or after 1929, you need 40 credits, or 10 years of work, to collect retirement benefits. The amount of your benefits depends on how much you earned during your lifetime. Remember, while you’re working, you are paying a percentage of your earnings in Social Security taxes, which means that more money (and thus, more tax) should mean more benefits. If you are out of work for some time or earn less money, your benefits should be lower.

It’s also one of the reasons you should be careful about receiving pay under the table: those funds (unless you report them) won’t count towards your credits.

The age at which you decide to retire also affects your benefit. If you retire at age 62, the earliest possible Social Security retirement age, your benefit will be lower than if you wait. But if you were born in 1953 or earlier, you’re eligible for your full Social Security benefit now. The full retirement age is 66 if you were born from 1943 to 1954 and increases gradually if you were born from 1955 to 1960 until it reaches 67. For anyone born 1960 or later, full retirement benefits are payable at age 67.

Other family members may be entitled to benefits, including spouses who never worked or have low earnings. If you’re eligible for both your own retirement benefits and spousal benefits, Social Security will pay your own benefits first. If your spousal benefits are higher than your own retirement benefit, you’ll get a combination of benefits equaling the higher spouse benefits.

Overall, benefits typically work out to about 40% of preretirement income. As of last quarter, the average monthly check for retired workers, excluding spouses and dependents, totaled $1,463.19 (or $17,558.28 per year).

Once you reach retirement age, you may have to pay income tax on your benefits depending on your filing status and how much other income you receive. For more on whether your Social Security benefits are taxable, click here.

What are SSDI benefits?

SSDI is the abbreviation for Social Security Disability Insurance. Social Security pays benefits to people who can’t work because they have a medical condition that’s expected to last at least one year or result in death. Yes, that sounds ominous, but that’s the definition of disability under federal law.

SSDI is available for workers that, like Social Security retirement beneficiaries, have earned a sufficient number of credits. To qualify, you normally must meet two different earnings tests:

  1. A recent work test, based on your age at the time you became disabled; and 
  2. A duration of work test to show that you worked long enough under Social Security. 

(Certain blind workers have to meet only the duration of work test.)

The tests are based on your age at the time of your disability. But, generally, you can take the year you became disabled and subtract the year you attained age 22, to get the number of quarters of coverage necessary to meet the duration requirement.

Here’s a quick example: Let’s say you were born in 1970, and you became disabled in 2020. The math is 2020-(1970+22) = 28 quarters (or seven years).

When you apply, Social Security will forward your information to a state agency to make the initial disability determination decision. Your doctors don’t decide if you’re disabled. The state agency staff will review your information and may ask you to go for another examination.

  • If your application is approved, you’ll get a letter showing the amount of your benefit, and when your payments start. 
  • If your application isn’t approved, the letter will explain why and tell you how to appeal the determination if you don’t agree.

If you are getting other benefits, like worker’s compensation, the total amount of SSDI available to you may be affected.

Like Social Security retirement benefits, SSDI benefits are typically not taxable. However, if you receive SSDI and another source of income, your benefits may be taxed.

What Are SSI benefits?

SSI is the abbreviation for Supplemental Security Income. SSI gives monthly cash assistance to people with limited income and resources who are age 65 or older, blind or disabled. Children with disabilities can get SSI, too.

To qualify, you must meet the income and resources tests:

  • Typically, your countable income must not exceed the federal benefit rate (FBR). The FBR for 2020 is $783 per month for individuals and $1,175 for couples. If you make more, you may be eligible for a decreased benefit. Generally, the more countable income you have, the less your SSI benefit will be.
  • Your resources (like real estate, bank accounts, cash, stocks, and bonds) must be $2,000 or less ($3,000 for a couple). Your resources do not usually include the home and land where you live; life insurance policies with a face value of $1,500 or less; your car; burial plots for you and members of your immediate family; and up to $1,500 in burial funds for you and up to $1,500 in burial funds for your spouse.

Some states add a supplement, making payments and allowable income levels higher. States that do not have a supplement include Arizona, Mississippi, North Dakota, and West Virginia.

If you get SSI, you may also be able to get help from your state or county, including Medicaid, food, or other social services (call your local social services department or public welfare office for information). Additionally, if you get SSI, you may qualify to get help to buy food through the Supplemental Nutrition Assistance Program (SNAP). If everyone in your home is applying for or getting SSI, you can apply for SNAP through your Social Security office.

For federal purposes, SSI benefits are not taxable.


This meant to be a quick primer, but as you might imagine, the specifics are important (it’s a government program and they like rules). For more on Social Security retirement, SSDI and SSI benefits, contact the Social Security Administration (https://www.ssa.gov/agency/contact/).

And one more thing: YES, all of these folks (those receiving retirement, SSDI, and SSI benefits) are entitled to a stimulus check so long as they meet the other criteria.

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 for a correction. And, the question of whether additional returns were required was raised at the White House 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.  

“Social Security recipients who are not typically required to file a tax return do not to need take an action, and will receive their payment directly to their bank account,” said Secretary Steven T. Mnuchin. 

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 [sic] 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.

(Update: Treasury and IRS have changed course and seniors who do not usually file a tax return do not need to file to get a check.)

“Please help me.

That was the message that I received over and over yesterday from seniors. 

Yesterday, I posted this story about a notice from the Internal Revenue Service (IRS) purporting 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.”

It’s confusing language because 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 notice changed everything. Within minutes of posting my story, the emails started coming in.

  • “please advise me how i can obtain stimulus check once u find out more information.”
  • “I have no access to going outside and cannot ask any tax preparer since they’re not around.”
  • “…most of us seniors out here in social isolationland have no clue as to how to proceed, who to call or what we are supposed to do.”
  • “Please help!”
  • “This Coronavirus is Extremely stressful.”
  • “I’m a 100% disabled veteran. I receive benefits from the VA. I don’t pay taxes. What will I have to do to receive the stimulus check.”
  • “No church, No friends and Daily problems getting food.”
  • “Things are not so good for me presently.”
  • “… according to their response I can file a paper copy and mail it to the IRS. Which means I have to go out and find a paper copy as I don’t have a working printer at home. Then go to the post office and wait for who knows how many months for the paper work to be processed and then the check deposited in my bank account. “
  • “I have new heart, lung and kidney issues from this flu and I sure could use the help to pay for the ER visit and the ambulance ride.”
  • “I receive all of my income from Social Security and have nothing basically. I am very high risk for COVID 19 with a pre existing respiratory disease. Now if I want the stimulus money I have to go out and file it. I don’t have stamps. I don’t even have a printer so since I can’t file I am SOL unless I want to go risk my life.”

There were stories about seniors struggling with cancer. Stories about those who have been laid off. I heard from those on disability. And I heard from those who feel trapped by their current circumstances.

It was heartbreaking.

So I made calls. And I sent emails. I asked the IRS what they were doing to help. I asked many members of Congress about this, including Sen. Majority Leader Mitch McConnell (R-KY), Speaker of the House Nancy Pelosi (D-CA), and both Senators from my own state of Pennsylvania, Sen. Bob Casey, Jr. (D-PA) and Sen. Pat Toomey (R-PA). I also reached out to the White House. 

I received only one response. One. Congresswoman Kendra Horn (D-OK), who had expressed concerned to constituents over this issue on her Facebook FB page, emailed me the following statement:

The IRS announcement that many seniors, disabled veterans, and social security beneficiaries will have to file a simplified tax return to receive their economic impact payments goes against the spirit and the intent of the law that we passed. The CARES Act is focused on delivering immediate help to Americans in need. That includes many Social Security and Veterans Administration beneficiaries who are not required to file taxes. Now the IRS has created unnecessary hurdles for those communities to receive help. I urge Treasury Secretary Mnuchin and Social Security Administrator Saul to uphold the intent of the CARES Act by allowing vulnerable groups to receive their economic impact payments without additional action.

Shortly before this piece was to be published, I received a copy of a letter from some U.S. Senators directed to Treasury Secretary Mnuchin and Social Security Administration Commissioner Saul expressing alarm over this recent guidance. “This [IRS] filing requirement would place a significant burden on retired seniors and individuals who experience disabilities, especially given the current unavailability of tax filing assistance from Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs during the COVID-19 crisis,” wrote the Senators. “We strongly urge you to ensure that economic stimulus payments are automatically sent to vulnerable seniors and individuals who experience disabilities, without these individuals needing to file a tax return.”

You can read the full letter here.

The letter was signed by 41 Senators: Maggie Hassan (D-NH), Sherrod Brown (D-OH), Bob Casey (D-PA), Chuck Schumer (D-NY), Ron Wyden (D-OR), Sheldon Whitehouse (D-RI), Thomas R. Carper (D-DE), Michael F. Bennet (D-CO), Robert Menendez (D-NJ), Catherine Cortez Masto (D-NV), Debbie Stabenow (D-MI), Benjamin L. Cardin (D-MD), Mark R. Warner (D-VA), Richard J. Durbin (D-IL), Jeanne Shaheen (D-NH), Richard Blumenthal (D-CT), Jacky Rosen (D-NV), Doug Jones (D-AL), Jack Reed (D-RI), Amy Klobuchar (D-MN), Edward J. Markey (D-MA), Gary C. Peters (D-MI), Tim Kaine (D-VA), Martin Heinrich (D-NM), Bernard Sanders (I-VT), Mazie K. Hirono (D-HI), Tom Udall (D-NM), Chris Van Hollen (D-MD), Tammy Duckworth (D-IL), Tammy Baldwin (D-WI), Angus S. King, Jr. (I-ME), Tina Smith (D-MN), Christopher A. Coons (D-DE), Patty Murray (D-WA), Kyrsten Sinema (D-AZ), Elizabeth Warren (D-MA), Cory Booker (D-NJ), Patrick Leahy (D-VT), Kirsten Gillibrand (D-NY), Chris Murphy (D-CT), and Maria Cantwell (D-WA).

Despite the noise, as of this writing, nothing has changed. Treasury has not issued a public statement, and the IRS has not responded to my request for comment.

If the guidance stands, seniors and those with disabilities who otherwise don’t have a filing requirement will be required to file something – no matter how simple – to collect a stimulus check, even though the law provides an alternative. If those folks can’t file or don’t receive the necessary information, they’ll miss out on funds they may be counting on at a time where they may not be able to rely on family, churches, friends, and charities.

That could be someone’s grandmother. It may be a vet who fought to keep you safe. It may be a former school teacher, counselor, or first responder. It could be your neighbor. It could be you.

If you’d like to make your voice heard, here’s how you can contact your elected officials:

I’ll continue to update you as information becomes available.

(Update: Treasury and IRS changed course and will not require returns.)

Each year, about 64 million people collect Social Security benefits: about one family in four receives some kind of Social Security benefits. Of those, nearly 45 million are retired workers who receive, on average, $1,471 per month; another 3 million individuals receive benefits as spouses or children of retired workers.

Social Security benefits represent about 33% of the income of the elderly. According to the Social Security Administration, among the elderly, half of married couples and 70% of unmarried persons receive 50% or more of their income from Social Security. Nearly 21% of married couples and about 45% of unmarried persons rely on Social Security for 90% or more of their income.

Compare those numbers to just 25,972,101 taxpayers over the age of 65 who filed in 2018 (according to the most recent IRS data available). 

That means more than 20 million taxpayers over the age of 65 do not file a federal income tax return each year – likely because their only source of income is Social Security benefits. 

Initially, that wasn’t a barrier to getting stimulus checks. Congress provided Treasury with a mechanism in the CARES Act for relying on forms 1099-SSA (or RRB equivalent) to issue checks. That carve-out is in the same paragraph that gives taxpayers an alternative if they haven’t filed for the 2019 tax year (Treasury can refer to their 2018 tax return). I wrote about it – as did many others – and for days, the knowledge that they didn’t have to do anything further for benefits provided a sense of relief for seniors. Until Monday, March 30, 2020.

On Monday, the Internal Revenue Service (IRS) posted a notice about the checks. The guidance included several sentences that seem contrary to the language in the law. Specifically, the guidance advised, “However, some seniors and others who typically do not file returns will need to submit a simple tax return to receive the stimulus payment.”

Tax professionals like me expected that some non-filers would have to file returns to receive checks. Otherwise, how would the IRS know how to reach them, or that they existed at all?

But seniors? Seniors for whom the Social Security Administration issues tax statements each year AND requires direct deposit for benefit checks? Why the need for more paperwork?

So far, the IRS isn’t commenting. 

But, according to Chye-Ching Huang, Senior Director for Economic Policy at the Center on Budget and Policy Priorities, this wasn’t supposed to be the result of the legislation. The Treasury, she notes, was given “clear and explicit authority” to issue checks based on information available from the Social Security Administration. 

Here’s the language from the law (downloads as a PDF): “if the individual has not filed a tax return for such individual’s first taxable year beginning in 2018, use information with respect to such individual for calendar year 2019 provided in— (i) Form SSA–1099, Social Security Benefit Statement, or (ii) Form RRB–1099, Social Security Equivalent Benefit Statement.”

That language was, Huang says, pretty clearly intended to avoid the mistakes of the past. In 2008, nearly 20 million taxpayers who were traditionally non-filers were required to file tax returns to get rebate checks. That’s why it took almost three months for some taxpayers to receive their checks.

At the time, then National Taxpayer Advocate, Nina Olson, criticized the move, testifying to Congress that it was unnecessary and burdensome for those in need (downloads as a PDF). Specifically, Olson noted in 2008 that there were “significant barriers that will result in substantially less than full participation by this target population.” Some challenges Olson noted were a lack of Internet access or discomfort obtaining tax information from the Internet; lack of mobility; including those who are incapacitated and under the care of guardians, conservators, or nursing homes and hospitals; fear of the IRS or losing benefits; and confusing messages. An estimated 3.5 million of those eligible never got their checks at all that year.

Olson suggested that it may be better to utilize another federal agency for payment delivery, querying at the time, “The 20.5 million Social Security and Veterans Affairs beneficiaries all receive payments from those agencies, and many of those payments are directly deposited into bank accounts. Why not find a way to let those agencies make stimulus payments to individuals without a tax filing requirement instead of requiring them to file ESP-only returns and having the IRS then send them paper checks?”

That was in 2008 when seniors weren’t been told to stay in their homes and tax offices were not shut down. Now, Huang notes, the current COVID-19 crisis has made it even harder for those people to file. Free tax centers for seniors, such as AARP Tax-Aide, are now closed. Tax professionals are staying at home. And statistically, the elderly are among the most vulnerable to COVID-19. So why design a system where they may not be able to get financial assistance without exposing themselves to danger?

Throw in the potential for increased scams targeting the elderly, and it’s a recipe for disaster.

For its part, the IRS seems to think that the workaround is simply to wait, advising, “For those concerned about visiting a tax professional or local community organization in person to get help with a tax return, these economic impact payments will be available throughout the rest of 2020.”

For some seniors with bills to pay and food and medication to buy, that might be too late.

Requests for comment made to House Speaker Nancy Pelosi (D-CA), Senate Majority Leader Mitch McConnell (R-KY), other members of Congress, and the White House were not immediately returned.