Three New Credits

[Black Bart]

No argument there

My whole point is - the government SHOULD BE mailing out SOME FORM of documentation to taxpayers receiving the $ 250 advising them to show it to their tax preparer. If they don't have a preparer because they don't need to file a return - that's fine - but at least there's notification provided just in case they need to file a return.

Obviously that would be the proper and prudent thing to do and maybe they will send a notice like last time except I didn't have much luck getting customers to bring it to me. Did you? I hope they put up a website to go to for the amount like they did with the stimulus payment -- that thing really saved us.

[Uncle Sam]

Three New Credits

My whole point is - the government SHOULD BE mailing out SOME FORM of documentation to taxpayers receiving the $ 250 advising them to show it to their tax preparer. If they don't have a preparer because they don't need to file a return - that's fine - but at least there's notification provided just in case they need to file a return.

[Black Bart]

Just thinking about it,

Since the SSI could reduce or eliminate the Making Work Pay Credit, we NEED to ask
EVERY client (who is possibly entitled to this credit) if they received SSI. I imagine none
or very few will have received SSI but if we do not ask, we might be penalized by IRS.
I have already prepared a questionnaire which I will ask EVERY such client to sign
which has the question: Did you or your spouse receive SSI:? That question alone will require
our time since many clients will not know what SSI is. What a mess!

Sandy and Joan are probably right -- there shouldn't be many SSI people because most of them don't usually make enough to file anyway. But I don't think I'm going to quiz every customer (they won't know anyway); that would be more trouble than explaining to a few clients why their refund is $250 short.

[dyne]

Since the SSI could reduce or eliminate the Making Work Pay Credit, we NEED to ask
EVERY client (who is possibly entitled to this credit) if they received SSI. I imagine none
or very few will have received SSI but if we do not ask, we might be penalized by IRS.
I have already prepared a questionnaire which I will ask EVERY such client to sign
which has the question: Did you or your spouse receive SSI:? That question alone will require
our time since many clients will not know what SSI is. What a mess!

[S T]

SSI and SSA

Normally a SSI recipient is not required to file a Federal or State Income Tax return, and SSA recipient's are only required to file a Federal or State Income Tax Return, if there is other income, that places them within the filing requirements. And from what I know if an SSI client receives very much other income other than SSA - they will be eliminated from the SSI program and benefits denied.

The taxpayers that I filed for the Stimulus Rebate ONLY, tax return 2007, I did not file a return for in 2008. There was no filing requirement.

I would think that these particular "recipients" of the $250 then in 2009 would also not be required to file an income tax return.

I believe we are only having to concentrate for (2009 filings) on those clients that received the $250 SSA rebate or VA rebate, that have a filing requirement due to other income such as pension retirements, investments, interest, etc.



Sandy

[Uncle Sam]

Three New Credits

The way I see it - the SSA-1099 form SHOULD show the $ 250 in a separate box not calculated into the total gross benefits, even though it's not taxable.

You guys are right - it's going to be one more nightmare. And clients will STILL complain if we raise our fees.

And yes - our software companies will need to find a place to store the $ 250 so the system will calculate the proper amount of the $ 400 credit to be used.

[Black Bart]

Thank you Black Bart. But since SSI is NOT taxable and does not appear on the social security annual statement, we preparers will not know about it. It triggers the allowance of the $250 Economic Benefit payment, just as does VA benefits. It gets worse and worse.

I agree -- that's the sticking point and I hope, as Burke says...

...Upon further review of the eligibility requirements for this payment, I don't see how SSA/RRB can NOT show it on the 1099 form somewhere...

that they will put it on SSA-1099. But it's probably a long shot -- I don't think SSA will change their long-standing method just for this ripple in the water.

...we lose credibility if we have to tell them "oh wait things are worse than what I just told you because of that money you got last summer."

This is the problem. Last year, the only thing that happened if we omitted the stimulus credit was that IRS sent them a letter and a check. Not good for your image, but not really damaging since nobody cares deeply if they're coming out ahead of the game. This time, as I understand it, our software's going to be auto-calculating the $400-$800-whatever and, unless we subtract off the correct prior payment amount, then they'll get either an immediate notice of error or a later IRS bill for the overpayment.

[erchess]

Recovery Rebate Credit

The IRS and Drake Software made the Recovery Rebate Credit a non issue this year for me. I wouldn't agree to do the return unless I was either shown the letter stating how much they were going to get or allowed to look it up on the web. Even with dial-up that took only a couple minutes and then Drake Software calculated what they were due. I loved that a lot. I think everyone in the Government learned from the mess in TY 2000 that all the relevant facts must be easy to learn on the web. I think we professionals learned that these calculations must be done before we tell clients their bottom lines because we lose credibility if we have to tell them "oh wait things are worse than what I just told you because of that money you got last summer."

[joanmcq]

How many people that get SSI have to file returns???

[dyne]

Thank you Black Bart. But since SSI is NOT taxable and IF it does not appear on the
social security annual statement, we preparers will not know about it. It triggers the
allowance of the $250 Economic Benefit payment, just as does VA benefits. It gets
worse and worse.

[Black Bart]

I

Is SSI reported on a SSA-1099?

don't believe it is. SSI is non-taxable income.

I agree with some other posters -- before this is over, it'll be a huge time-consuming mess.

[dyne]

AGAIN: The heading of this post which I started is wrong. It should have been New Credit with TWO credit reductions.
Completing the schedule M may not be that time consuming but obtaining the information to
place on the form will be time consuming. I have prepared a questionnaire which I will
have each client SIGN. What if they do not know if they did not receive the $250 economic
benefit payment or the special $250 for being a certain goverment retiree who was NOT
eligible for social security benefits? Or what if they are SURE that they did not receive
it? I have already received one call from a wife who said that she did not receive her $250 Economic Benefit payment, but her husband received his. I predict that this will be MORE complicated than the Recovery Rebate Credit reflected on the 2008 tax returns. And don't forget about the VA disability benefits which do NOT show up on anything we get from our clients.And if this does not consume more of our time, the reinstated Energy Tax Credit will.

[Burke]

Yes, it is. Upon further review of the eligibility requirements for this payment, I don't see how SSA/RRB can NOT show it on the 1099 form somewhere, as there are a number of individuals who were not eligible for it, most notably minor children who receive SSA and benes whose benefits began February 2009 or later, but there are other circumstances as well. See SSA website, FAQs, "Will ALL SSA and SSI beneficiaries receive a one-time economic recovery payment of $250?" Hopefully, that will be the case, and we won't have to go to the SSA website to check every one like we did the Stimulus rebates. Preparers, unite and contact your professional organizations!

[Larmil]

I have a married couple, young, but who both work a little at jobs and collect SSI. They got the $250 payment (each) and will qualify for the $400 (each) MWP credit. So based on this form, it appears they will get a net $300 credit ($800 - $500) on their tax return in 2009. I would think next year's software will automatically calculate this when I input the W-2 and SSA-1099 figures. And it should autocalculate 2% exclusion based on AGI. Anyone who gets Social Security and WAS receiving it in November, 2008 would have gotten the $250. However, I think SSA should put it on the form somewhere. Don't know if they will. I would not think it would take an hour to complete this form, even if you were to do it manually.

Is SSI reported on a SSA-1099?

[Burke]

I think so. I have a married couple, young, but who both work a little at jobs and collect SSI. They got the $250 payment (each) and will qualify for the $400 (each) MWP credit. So based on this form, it appears they will get a net $300 credit ($800 - $500) on their tax return in 2009. I would think next year's software will automatically calculate this when I input the W-2 and SSA-1099 and/or RRB-1099 figures. And it should autocalculate 2% exclusion based on AGI. Anyone who gets Social Security and WAS receiving it in either November 2008, December 2008 or January 2009 and still living in May 2009 would have gotten the $250. However, I think SSA/RRB SHOULD put it on the form somewhere. Don't know if they will. Also, since VA benefits are not taxable or reported, I guess you will have to assume they got it in that case unless they can show otherwise. I would not think it would take an hour to complete this form, even if you were to do it manually.