USA

Social Security recipients won't need tax return to receive stimulus payment

Treasury Secretary Steven Mnuchin Wednesday announced that Social Security recipients would not have to file tax returns in order to receive coronavirus stimulus payments.

The reversal comes after complaints from lawmakers that an IRS plan to require seniors to file simplified returns would place an undue burden on them amid widespread shutdowns and social distancing guidelines implemented in the wake of the coronavirus outbreak.

In a statement, Mnuchin said: “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.”

Social Security beneficiaries will receive the payments “as a direct deposit or by paper check, just as they would normally receive their benefits,” the agency said.

It did not provide other details, and it was not immediately clear how the plan would work.

While the stimulus legislation signed into law last week directs the agency to use Social Security benefit statements to make payments if someone did not file a 2019 or 2018 return, those documents do not include all the information — such as someone’s income and tax-filing status — needed to calculate payments.

Millions of Americans don’t file annual tax returns — many are excused because their incomes are too low. Non-filers are disproportionately seniors, with one study indicating one-third are at least 65 years old.

Earlier this week, the IRS said they’d need to file simplified returns in order to receive the payments.

The stimulus legislation offers $1,200 per adult earning less than $75,000 and $2,400 to couples taking home twice that. Beyond that, the payments quickly phase out.

For most people, the payments will be based on what they reported in their 2019 returns or, if they haven't yet filed, their return from last year.

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