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The Trump administration is requiring Americans who receive Social Security to file a tax return to receive their $1,200 economic stimulus payment, an added step that is causing confusion and could prevent millions from easy access to relief.
Many lawmakers and advocates for the poor say filing a tax return shouldn't be necessary for people on Social Security because the government already knows how to send this population monthly checks. The $2.2 trillion aid legislation, passed in response to the coronavirus pandemic, said that if someone has not filed a 2019 or 2018 tax return, the U.S. Treasury should get their information from Social Security, if applicable.
But, the Internal Revenue Service posted a notice on its website on Monday instructing Social Security recipients who do not normally send in a return to file a "simple" tax return, which will be available soon.
"People who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment," the IRS said. "Low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return will not owe tax."
More than 15 million Americans on Social Security do not file an annual tax return because their income is so low, according to the Center on Budget and Policy Priorities. During the last recession, when the U.S. government sent most Americans a stimulus check and required a filed tax return to get it, 3.5 million Social Security recipients were left out because they never sent a return, according to a 2008 Treasury Department analysis.
Congress and the Treasury Department wanted to get the money out as quickly as possible, so they largely based the rules governing who gets the payments on the standards used in 2008, in the hope that the IRS could move faster. With so many millions of Americans out of work, the Trump administration is under pressure to quickly deliver these $1,200 payments to adults earning less than $75,000 a year and $500 payments to families with children younger than 17.
Mnuchin said direct deposits should begin by April 17, followed by checks in the mail. About 60 percent of tax filers gave the IRS direct-deposit information in recent years, said Nicole Kaeding of the National Taxpayers Union Foundation. The IRS said there would soon be a web-based portal for people to update their direct-deposit information.
Most high school seniors and college students won't get any money. The bill gives nothing to families for their children older than 16, a shock to many households already reeling from canceled graduations, and college students readjusting to life at home with so many universities shut down. Many immigrant families are also learning that they are ineligible. In order for anyone in the family to receive a payment, each person in the household — including children — is supposed to have a valid Social Security number.
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