April 02, 2020

Treasury Reverses Course, Announces Social Security Beneficiaries Will Automatically Receive COVID-19 Direct Cash Assistance

Announcement Follows Outreach from Senators Hassan, Brown, and Colleagues Denouncing Earlier Treasury Guidance That Contradicted Language in Bipartisan COVID-19 Legislation

WASHINGTON – In case you missed it, following calls from Senators Maggie Hassan (D-NH), Sherrod Brown (D-OH), and colleagues, the U.S. Treasury Department announced that Social Security recipients will automatically receive direct cash assistance included in the CARES Act without having to file tax returns.

 

Yesterday, Senators Hassan and Brown led a group of 41 colleagues in raising alarms over guidance that the IRS issued earlier this week that said that Social Security beneficiaries would need to file tax returns in order to receive direct cash payments. This directly contradicted Congressional intent in drafting the CARES Act, which had made clear that the Treasury Department had the authority to send automatic direct cash assistance to Social Security beneficiaries regardless of whether they file taxes.

  

See below for additional details:

 

CBS: Social Security recipients will automatically get stimulus checks, Treasury says in reversal

By Aimee Picchi

The Treasury Department said late Wednesday that Americans on Social Security will not be required to file a "simple tax return" to receive a stimulus check from the U.S. government. The announcement reversed an earlier statement from the Internal Revenue Service that participants in the federal retirement program would need to file such a return to get the funds.

 

The IRS directive would have impacted about 15 million people, including millions of seniors on Social Security, who aren't required to file tax returns, according to Chuck Marr, senior director of federal tax policy for the Center on Budget and Policy Priorities. Seniors who rely on Social Security for their sole source of income don't have to file tax returns. 

 

The Treasury's reversal comes after lawmakers including Senators Maggie Hassan of New Hampshire and Sherrod Brown of Ohio, both Democrats, expressed alarm over the guidance, saying in a letter on Wednesday to the IRS and Treasury that it will "place a significant burden on retired seniors and individuals who experience disabilities."

 

The lawmakers had urged the IRS and Treasury to make sure the payments "are automatically sent to vulnerable seniors" and disabled Americans without them needing to file a tax return, especially given that the IRS's Volunteer Income Tax Assistance and Tax Counseling for the Elderly program has been closed due to the coronavirus.

 

Many Americans are counting on the stimulus checks to help them stay afloat financially during the coronavirus pandemic. The payments amount to $1,200 for individuals who earn less than $75,000 per year and $500 per child younger than 17. The IRS will use the information from Social Security statements to send the $1,200 checks to Social Security recipients who did not file tax returns in 2018 or 2019, Treasury said late Wednesday.

 

"Social Security recipients who are not typically required to file a tax return need to take no action, and will receive their payment directly to their bank account," Treasury Secretary Steven Mnuchin said in the statement. […]

 

WMUR: IRS reverses course to allow seniors to receive stimulus funds without filing tax returns

By John DiStaso

In a quick reversal Wednesday night, the U.S. Treasury Department responded to a letter by Sen. Maggie Hassan and 40 other senators by scrapping a requirement that millions of Social Security recipients must file tax returns in order to receive economic impact payments from the coronavirus response stimulus package.

 

Hassan and Ohio Sen. Sherrod Brown led a letter with 39 other Democratic senators urging the change earlier Wednesday. The senators said the Internal Revenue Service requirement contradicted the language of the CARES Act and congressional intent in drafting that portion of the law.

 

In a statement Wednesday night, Treasury Secretary Steve Mnuchin said:

 

"Social Security recipients who are not typically required to file a tax return do not to need take an action and will receive their payment directly to their bank account."

 

The Treasury Department said the IRS will use information on Form SSA-1099 and Form RRB-1099 -- which are normally filed by Social Security recipients -- "to generate $1,200 Economic Impact Payments to Social Security recipients who did not file tax returns in 2018 or 2019.

 

"Recipients will receive these payments as a direct deposit or by paper check, just as they would normally receive their benefits."

 

Hassan and Brown said in a joint statement, "It is unfortunate that the IRS created confusion with its guidance this week, but we are very pleased that the Treasury Department reversed course and will now get this cash to Social Security beneficiaries automatically as Congress intended.”

 

About 20 millions Americans, including as many as 100,000 Granite Staters would have been affected by the change, Hassan's offices estimated. […]

 

Axios: After IRS post, Mnuchin says social security recipients will automatically get stimulus checks

By Rebecca Falconer

 

Social Security recipients who typically don't file tax returns will automatically receive their coronavirus stimulus payment, the Treasury Department said on Wednesday.

 

Why it matters: The Internal Revenue Service issued guidance Monday that Americans "who typically do not file a tax return will need to file a simple tax return" to access the funds, prompting criticism from both Democratic and Republican lawmakers.

 

"Social Security recipients who are not typically required to file a tax return need to take no action, and will receive their payment directly to their bank account."

Treasury Secretary Steve Mnuchin statement

 

Driving the news: Lawmakers including Sens. Maggie Hassan (D-N.H.) and Sherrod Brown (D-Ohio) expressed concern in a letter to the IRS and Treasury earlier Wednesday that such a move would "place a significant burden on retired seniors and individuals who experience disabilities."

 

Sen. Josh Hawley (R-Mo.) tweeted Wednesday it was "ridiculous" the IRS issued guidance saying seniors had to file taxes.

 

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