Social Security and Economic Impact Payments
“My client is retired, receiving Social Security benefits and hasn’t filed a tax return for the last couple of years. For those collecting Social Security, how will the IRS issue Economic Impact Payments to these individuals?”
ERISA consultants at the Retirement Learning Center (RLC) Resource Desk regularly receive calls from financial advisors on a broad array of technical topics related to IRAs, qualified retirement plans and other types of retirement savings and income plans, including nonqualified plans, stock options, and Social Security and Medicare. We bring Case of the Week to you to highlight the most relevant topics affecting your business.
A recent call with a financial advisor from New Jersey is representative of a common inquiry related to Covid-19 Economic Impact Payments.
Highlights of the Discussion
According to an April 1, 2020, press release from the Treasury Department, Social Security beneficiaries who are not typically required to file tax returns will not need to file any additional forms or information in order to receive an Economic Impact Payment. Instead, payments will be automatically deposited to recipients’ bank accounts.
The IRS will use the information on the Form SSA-1099 and Form RRB-1099 to generate the 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.
Recipients of Social Security benefits who don’t file tax returns should automatically receive their Economic Impact Payments based on their Forms SSA-1099 and Form RRB-1099 in the form of a direct deposit or paper check.