$250 Social Security Payment

[Jiggers]

Err on the conservative side

IRS Website shows the criteria for payments and those do not qualify do the payment. As I said before those who met the criteria for for payment will be assumed to have gotten the payment unless the can show me why they didn't. We cannot verify if they got the payment (I wonder how the IRS can) or not.

If the taxpayer cannot verify receipt, I will assume that the taxpayer received the $250.

I would rather have the client receive a letter saying $250.00 is being refunded instead of a letter saying you owe $250.00 plus interest. However, each letter will probably say "you (meaning us according to our clients) made a mistake."

The IRS does not have this information now. It has been explained to me that SSA will send the information later for matching purposes. Similar to the way they send the W-2 information.

Why SSA didn't put this on the 1099SSA beats the heck out of me!

I do intend on advising the client of what I did.

[BP.]

shows the criteria for payments and those do not qualify do the payment.

I'm sorry, I don't know what your sentence means, but are you saying wage earners who are also SS recipients were NOT eligible for the $250 Economic Recovery Payment?

I was thinking I needed to know if the $250 Economic Recovery Payment was received in order to correctly calculate the Making Work Pay credit on the tax return.

Cheers!

[JohnH]

Jiggers:
I do like the idea of advising the client of how you handled it. Maybe a note saying somthing to the effect that the return was prepared assuming the $250 payment was received because the info available to you indicates they satisfied the conditions set forth by SSA for the payment. Adding that if their situation was unusual, IRS will discover SSA's error, which should result in an additional $250 refund in the future. Then if they get an adjustment, it's easy enough to say IRS corrected SSA's error just like you told the client they would.

As for whether it's an issue or a non-issue, I guess it depends upon the makeup of each person's practice. I'd say that half of my clients who receive SocSec also work at least part time.

[nwtaxlady]

I would rather have the client receive a letter saying $250.00 is being refunded instead of a letter saying you owe $250.00 plus interest. However, each letter will probably say "you (meaning us according to our clients) made a mistake."
.

My understanding is that the $250 is NOT coming from IRS. Therefore, if they did not receive the $250, they will not get a letter with an adjustment that they owe you $250. If the taxpayer did not receive it, they are NOT to call IRS they are to call SS, RRB or VA.
And it will not come thru on the tax return.

On a different note, the Federal Retirement credit that if a taxpayer worked for the government and was NOT covered by social security and DO NOT receive SS (from another job), then we are to calculate that into the SCH M and they will receive that $250 on their tax return. If YOU don't do that then the taxpayer will not get it and loose out.

This is my understanding.

[DonPriebe]

I'm sorry, I don't know what your sentence means, but are you saying wage earners who are also SS recipients were NOT eligible for the $250 Economic Recovery Payment?

I was thinking I needed to know if the $250 Economic Recovery Payment was received in order to correctly calculate the Making Work Pay credit on the tax return.

Wage earners who are also SS recipients are eligible for both the Making Work Pay Credit and the $250 Economic Recovery Payment. But the total of these two credits may not exceed $400 ($800 MFJ). So you need to know if they got the $250 so Schedule M can limit the MWPC appropriately.

[Jiggers]

Agree, not all will qualify

Wage earners who are also SS recipients are eligible for both the Making Work Pay Credit and the $250 Economic Recovery Payment. But the total of these two credits may not exceed $400 ($800 MFJ). So you need to know if they got the $250 so Schedule M can limit the MWPC appropriately.

I agree that not all will qualify for the amounts up to $400/$800. But those drawing SS or Railroad Retirement, or VA benefits, AND still working, you do need to know the amount received.

I still think it is stupid that this wasn't thought out by the IRS and SSA, RRB, and VA way back when this was first authorized.

To para-phrase a quote I have seen on this board, "Bad planning on THEIR part does not create an emergency on my part".

I will take easiest route and, if they were qualified for the payment, I will assume they did receive and advise the client of what I am doing.

[BP.]

Wage earners who are also SS recipients are eligible for both the Making Work Pay Credit and the $250 Economic Recovery Payment. But the total of these two credits may not exceed $400 ($800 MFJ). So you need to know if they got the $250 so Schedule M can limit the MWPC appropriately.

Yeah, thanks for confirming the interaction of the MWPC/ERP- and that's why I anticipate that this could be an issue for some clients.

[FEDUKE404]

Forget about making client inquiries!

Sorry, I stand by my previous post that I am going to assume the client got the payment if they meet certain guideline.

The call took 17 minutes. Unless you know the clients date of birth, place of birth and mother's maiden name you will get no info.

Ah, unless you are the Social Security recipient (or SSA has suitable POA information) you will get NO information from them. Not even to a spouse. PERIOD. End of story.......

(This assumes of course that you do not represent yourself as the client... )

I can only imagine the turmoil that could be created by having a client using my business phones to listen to SSA elevator music for thirty minutes or more while awaiting an "answer."

As others have noted, I will just assume a long-time Soc Sec recipient did receive the payment and go forward.

FWIW: I still cannot understand why that simple information could not have appeared on the 2009 Form 1099-SSA !!

FE

[TaxLadyinPA]

Check their bank statements

I will request that my clients bring their bank statements along. Most everyone today has a direct deposit (I know some don't) but odds are they do ..... If I can peek at their bank statement I can see if there was a $ 250 deposit. Sure beats sitting with client on phone waiting on hold. (most of my clients bring them anyhow because they think I need to see them)

Just my 2 cents worth.

[Black Bart]

To check or not to check

...you can't call SSA. Your client must do it. They will not give this information to the return preparer. Isn't that lovely. I can see our clients sitting in our office, making that call, and either getting a busy signal or getting put on hold for 30 minutes.

The above hypothetical is the deciding factor for me. Most customers can't effectively handle such a call on their own and I've been on 3-ways with balky agents who insist clients answer every question even as you feed 'em the answers. It would be impossible even if I were so inclined and billing for it. Offices will soon be packed and there's simply not enough time to do the real work and this too. 50% of my clients receive SSA and still work -- 95% won't know if they got the $250. Chances are 99% that anybody on SS got it and those odds are good enough for me. I'll ask if they drew VA -- if yes, I'll assume they got $250 from them unless also on SS. I'll quiz any civil servants.

...I would rather have the client receive a letter saying $250.00 is being refunded instead of a letter saying you owe $250.00 plus interest...

Amen to that, brother.

[Edward]

There's a smple solution to this issue!

If you're fortunate enough to have a copy of the 1040 Express Answers for 2009 tax year it says on Tab 16-5 that "In 2009, an adult may receive a one-time economic recovery payment of $250.00 if:

a. During the months of November 2008, December 2008 or January 2009, the individual person was ELIGIBLE to receive Social Security benefits, supplemental Social Security benefits (SSI), Railroad Retirement act benefits, or veterans compensation or pension benefits; and

b. The individual is a resident of the U.S. or certain U.S territories."

So, just ask them if they were eligible for the three months shown above
and I'm certain they can give a rapid reply cause I'm certain they will know whether or not they've qualified since those months!! Sound
encouraging?

[David1980]

Well, with my first acks I think I have the answer.

If it rejects, just swap it around. If the taxpayer said they got no money and it rejects for not matching IRS records, they probably got it. If taxpayer thinks they did get the money and it rejects, they probably didn't.

[AZ-Tax]

Not just Elderly, remember the stimulus in 08 tax year?

When we tax preparers needed to enter the TP’s stimulus amt, how many TP’s remembered the amt and most of those TP’s were not elderly. Face it, most TP’s could care less about keeping even the min books (entering only payments they received) and most are not very ambitious to go look at their bank statements to see if they received the payment.

If the SS recipient receives direct deposit, was their $250 also directly deposited or was a paper check cut? If direct deposited then a bank statement should show proof.

[BP.]

is this wrinkle getting wrinklier?

"Reject Code 1132 - Schedule M. Economic Recovery received does not match IRS Master Records."

"An economic Recovery Payment may have been received if social security benefits, supplement security income, railroad retirement benefits, or veterans disability compensation or pension benefits were received."

The wrinkley part: "The taxpayer may not realize they received the $250 economic recovery payment as it was paid with their benefits."

I was thinking the payment was a separate check or direct deposit item, but this seems to indicate otherwise.

[TaxLadyinPA]

Yes

If the SS recipient receives direct deposit, was their $250 also directly deposited or was a paper check cut? If direct deposited then a bank statement should show proof.

Yes .... Those who have direct deposit of monthly SS did receive the $ 250 as a direct deposit. (I know this because my husband was one of them)