Sch M

[newbie]

So, WHEN does the special credit for certain government retirees matter? It only matters or results in a net credit when the taxpayer did NOT have sufficient earned income AND did NOT receive the economic benefit payment of $250 or $500. In such a case they will
be entitled to a net credit on line 14 of schedule M or $250 for one or $500 for both IF
both spouses qualify for the special credit for certain government retirees

This sums it up. They can only receive it once, so if they got it thru SS, etc.. or if they will receive more than $250 from making work pay (up to $400) they won't get another $250. It's just determining if they are entitled to it and did they get it automatically or do they need to file a return to get it.

[FEDUKE404]

Govt retiree credit answer?

While looking around the IRS web site, I thought "why not?" and looked at the instructions for Schedule M.

http://www.irs.gov/pub/irs-pdf/i1040sm.pdf

The instructions related to the "Government Retiree credit" plainly state "...received a pension or annuity payment in 2009 for service performed for the US Government or any US state or local government...and the service was not covered by social security."

That seems at least somewhat clear to me.

On the other hand, I was definitely not expecting to see the existence of that worksheet on page 2 of the instructions!!

FE

[Gary]

How do we know

I have been very busy and not been on the Message Board for a long time, so if this question has been answered already, please forgive me. How do we know how much the employer reduced the withholding? AJs Tax gave an example of the employer withholding $600. Why would they do this if the maximum credit is $400? If they did receive a $600 reduction, how do we enter this on schedule M?

H&R Block is charging $5 for schedule M.

Gary

[FEDUKE404]

Sch M stands alone

I have been very busy and not been on the Message Board for a long time, so if this question has been answered already, please forgive me. How do we know how much the employer reduced the withholding? AJs Tax gave an example of the employer withholding $600. Why would they do this if the maximum credit is $400? If they did receive a $600 reduction, how do we enter this on schedule M?

H&R Block is charging $5 for schedule M.

Gary

Withholding is simply withholding and has no consequence on the credit(s) shown on Schedule M. Just enter it in the W2/1099R places as you normally would.

Some employers/pension payers actually gave the recipients the option of (re)changing their withholding if other factors came into play, so that they would not be "over"withheld should other credits be rattling around in their personal scenarios.

My guess is there will be a lot of unhappy campers who will not be pleased with our explanation of how they already got their bonus (or worse too much $ !) during 2009.

I do not know how/if Social Security is going to document the payment of the $250 which most recipients were paid. Supposedly that payment will not be included in the total potentially taxable Soc Sec benefits for 2009.

FE

[Gary]

Thanks

Thanks FE. Now that I think about it, it was a stupid question.

Gary

[newbie]

Gary, no question is stupid if you don't know the answer!

Somtimes we just need a little bump on the forhead to think about it - like a "Dah" moment.

Good to have you back for the tax season!

If you don't mind me asking, what is H&R charging for Schedule L?

[PIGLEE]

I am wondering if people receiving Social Security, and they got the 250.00, WILL IT SHOW ON THE SOCIAL SECURITY 1099? I know people won't remember getting the 250.00. Well, I don't remember getting mine, but I know I did.

Do we assume that if they get SS they got the 250.00. I know assume is a very bad word, but what else do we have at this point?


Merry Christmas Everyone !!!!

Jan

[Gary]

Schedule L

I don't know what the charge for Schedule L will be. Will let you know when I find out.

I know people that receive SS that swear they didn't get the $250. I got mine. I guess the only way we will know is when the return is rejected by the IRS.

Gary

[Snaggletooth]

Ssa-1099?

Gary I'm having the same problem with lots of SS recipients saying they didn't get their $250. This is going to be a tax prep problem if they swear they didn't get it. My mother got hers in May.

The best way out of the problem, if they have the presence of mind to do so, is to disclose the payment on Form SSA-1099. We'll have to wait and see.

[FEDUKE404]

Form SSA-1099

So far I have not been able to track down a representative copy of the 2009 form.

I do know that the $250 was made in a separate payment, and was paid in the same way as the "normal" monthly benefits. For most people, that is via direct bank deposit. Those who "don't remember" may wish to review their bank statements from earlier in the year to see if it was overlooked.

It is my understanding that the $250 is "free" money and in no way is to be (potentially) included in federal taxable income.

What information re the $250 payment actually shows up on the Form SSA-1099, or is retrievable via an internet check and/or telephone number, is anyone's guess.

I do know there was a very narrow window (several months?) in which a person had to already be receiving Soc Sec benefits that would entitle them to the credit.

FE

[WhiteOleander]

They had to have received a payment in either Nov, Dec of 2008 or Jan 2009. In other words, they had to be eligible and receiving payments in 2008. If their benefits began in 2009, they would not have received the 250.00. This can be checked by asking the client if the are new to receiving benefits and when they started.

If they have been receiving benefits for years, then I plan to assume they received the 250.00. If it didn't go into their bank, it might have gone to pay a debt. But, they are still considered to have received it.