Three New Credits

[Mike Mac]

$250 checks from the VA

Those people who were getting Disability payments from the VA (not pension payments - although the pension recipients may qualify for the Govt workers' portion of the credit) also qualified to get a $250 credit. I noticed a few messages back on this string that there were questions regarding this. Last month I contacted the folks at the Department of Veterans Affairs to ask how the payments flowed. They coordinated their payment procedures with Social Security. If a veteran who was receiving a disability payment from the VA was also getting a social security payment, the VA did NOT send out a 2nd payment of $250. The VA had no plans for any website that would show if a veteran would have gotten the check. Disability payments are also not taxed and therefore no year-end summaries are sent that might include information regarding a $250 deposit.

Here in MN I do normally ask clients if they are getting any non-taxable disability payments because it is information we need to determine if our clients are eligible for a property tax refund. The property tax refund process is not part of the income tax return. I am not sure if tax preparers in other states even need to ask that question in normal situations.

[Gene V]

Are you prepared to swear that you DID NOT receive your $250?

I can swear that mine was directly deposit May 28, 2009.

[S T]

Not Sure

Just that my mother-in-law received payment from SSA as a recipient, but then also received a notice from VA - as she was receiving a monthly benefit from them as well. VA, however, did not issue a $ 250 payment, only SSA.

SSI recipient's I am going to say we don't have to be concerned about, as I wouldn't think that most of them will be filing tax returns. If they are filing tax returns, they will more than likely lose their SSI monthly stipend

From what I have read so far, it is possible that VA could issue a payment of the $250 recovery rebate, but I believe it is for those that might have either just been on VA retirement/pension, or possibly a VA Disability - unclear on that "point" as well.

Observation and a Question: If we as taxpayers or tax preparers have no "mechanics or methodology" to check on the $ 250 benefit, then how is IRS going to check on it?

BB - I think I agree with you, when taxpayer can not confirm, we enter the $250 as received ??

Sandy

[Black Bart]

Multiple payments

...we have to also be concerned about those people that might have received through VA as well as SSA. My 99 year old mother-in-law received 2 notices, however only one payment through SSA.

Sandy

Sandy -- do you know if people receiving social security can also get SSI and VA or a combination of the two/three?

[Black Bart]

Okay, Gene

I got my SSA statement the other day--you are correct, the $250 is not on it.

Are you prepared to swear that you DID NOT receive your $250?

[S T]

SSA Recipients Receive Checks

BB

Accorinding to this article - there are still "millions" of SSA recipients that receive their checks by mail

http://www.fms.treas.gov/news/press/go_direct_severe_weather_season.html

I can't find any "tracking" on the $ 250 recovery rebate that was issued in 2009 either - and then we have to also be concerned about those people that might have received through VA as well as SSA. My 99 year old mother-in-law received 2 notices, however only one payment through SSA.

Sandy

[Black Bart]

Reduce the credit

...But not disclosing this on the SSA-1099 carries with it a special problem. Already I have had a couple recipients swear that they haven't received their $250. I think they have really received their money, but they are getting their years mixed up...

So do we reduce this Sch M credit, even if they swear they've never received the money??
If there is no disclosure on the SSA-1099, does anyone have any solutions for this??

Snag,

If they're drawing social security then you can be pretty sure they got the $250. While SSA isn't the best at lots of things, they're extremely good at the routine of sending your money to you -- I've been receiving it for several years and they've never yet missed the electronic credit to my account exactly on the third Wednesday of each month (others have different receipt dates and I don't know how that's determined). The point being, these things are easy to overlook and I'd say more people DON'T remember getting the $250 than do (I had to look it up on my mid-year bank statement and, sure enough, there it was). So while there may be exceptions, I believe the rule will be that if they're on SS then then we can safely assume they automatically got it and subtract it off their credit.

Which brings up another question -- do you know if SSA still mails SS checks or are recipients required to have a bank account to receive EFT deposits? If all are direct deposited, then that explains why most people don't "remember" getting the money -- it's just a credit to their bank account and they didn't "handle money" or notice it on the bank statement since, as you know, many, many people do not reconcile their statements.

[Snaggletooth]

I didn't get mine!

Actually, I'm not drawing it yet but I'm already hearing this from folks who do.

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

Bart is probably right -- putting things on forms is something they make commercial companies do, but fail miserably when it comes to their sister govt agencies like Social Security.

But not disclosing this on the SSA-1099 carries with it a special problem. Already I have had a couple recipients swear that they haven't received their $250. I think they have really received their money, but they are getting their years mixed up. There actually was a $250 stimulus to SS about a year ago, but these folks are getting told they will receive yet another $250 to compensate them for not getting a COLA this year. Confusing to them, and to us, indeed.

So do we reduce this Sch M credit, even if they swear they've never received the money??
If there is no disclosure on the SSA-1099, does anyone have any solutions for this??

[Gene V]

about SSA sending them out and the board discussion a while back on whether or not it would be on the SSA-1099. I don't think it will be and no use asking clients (last year I got maybe two correct answers out of 25 or so before giving up and checking the stimsite for all).

Talk about unknowing clients, I checked bank statements and found my own $250 so I think I'll assume everybody drawing SS also got their $250 and go with that.

I got my SSA statement the other day--you are correct, the $250 is not on it.

[Black Bart]

Oh yeah, I forgot

No site to check because the IRS didn't sent out the $250. But our IRS liaison told us that if the client doesn't remember whether they received it or not, that we should not include it on the return when we efile. If they did receive it, the return will reject with a message saying why. Then we can correct it and resubmit.

about SSA sending them out and the board discussion a while back on whether or not it would be on the SSA-1099. I don't think it will be and no use asking clients (last year I got maybe two correct answers out of 25 or so before giving up and checking the stimsite for all).

Talk about unknowing clients, I checked bank statements and found my own $250 so I think I'll assume everybody drawing SS also got their $250 and go with that.

[tilt53]

No site to check because the IRS didn't sent out the $250. But our IRS liaison told us that if the client doesn't remember whether they received it or not, that we should not include it on the return when we efile. If they did receive it, the return will reject with a message saying why. Then we can correct it and resubmit.

[Black Bart]

Anybody

heard of a new "stimulus payment site" like last year? If they don't give us one, it's going to make a lot of work for us to find out what making work pay was.

I just checked the old one and it's dead.
https://sa2.www4.irs.gov/irfof/lang/...jsp?app=IRACTC

[ChEAr$]

Will these credits have their own form like a 1099-R etc. that the TP will recieve in the mail? OR should have the TP kept track?

No to all three.
The making work pay credit is computed on schedule M and uses information from
your # 2 and 3 to do it.

Form 1099SSa does not show that special stimulus payment of 250$.

[AZ-Tax]

Each of these credits going to have their own new form?

I just realized how complicated the three new credits will make preparation of tax returns
become for this coming year.
1. The Making Work Pay Credit of 6.2% of earned income is not to exceed $400 for one
taxpayer or $800 for a joint return. BUT, this credit MUST be reported on the tax return
and the credit reduced by the two other credits listed below.
2. Those who received Social Security benefits during November of 2008 or SSI,
Railroad retirement and VA disability benefits will get a one-time payment of $250 during 2009
for each spouse who had such income or benefits. This is NOT taxable. Again the Making
Work Pay Credit above reduces the amount of the allowable making work pay credit in item 1 above.
3. Certain government retires who do NOT receive social security benefits will be entitled
to a one-time payment of $250 during 2009. This credit reduces the amount of the
Making Work Pay credit outlined in item 1 above.
It appears that we will be required to calculate all or part of this on the 2009 tax returns.Actually
the heading should say: One New Credit with two reductions..

Will these credits have their own form like a 1099-R etc. that the TP will recieve in the mail? OR should have the TP kept track?

[dyne]

Upon reflection I may NOT ask every client (who is entitled to the Making Work Pay Credit)
if they received SSI.
But to show how this can be a problem: I talked to my sister today and she advised me
that she DID receive SSI last year of which I was NOT aware.