Policy will repeat mistakes of Great Recession stimulus – contact your member of Congress now!
UPDATE 4/1/20 8 PM PST: The Trump administration has (partly) changed course: Social Security recipients will not have to file tax returns to receive a stimulus check. But: very low-income seniors and people with disabilities who receive Supplemental Security Income, as well as low-income veterans who receive certain benefits from the Veterans Administration, still have to file a tax return. Please contact your member of Congress now and urge them to keep the pressure on for a complete fix!
It’s April 1st, but this is no joke: In the middle of the COVID-19 pandemic and growing economic crisis, the Trump administration will require Social Security recipients and many others, who do not usually file a tax return, to do so in order to receive their economic stimulus rebate, according to a recent IRS newsletter.
If history is any guide, requiring a tax return will deprive millions of Americans of needed economic assistance. The 2008 economic stimulus package had a similar requirement: it created confusion and burdens for millions of people, and ultimately about 3.5 million of those eligible did not file, and so never received the payments.
That’s why this time around, Congress did things differently. The just-passed stimulus package (called the Coronavirus Aid, Relief, and Economic Security (CARES) Act) provides Treasury with the necessary legal authority to automatically make those payments – and the federal government already has all of the information it needs to provide these payments without a tax return.
As the Economic Policy Institute notes: “Treasury and IRS can match Form SSA-1099 information with tax-return information to make sure that the beneficiary isn’t part of a tax filing unit that received a stimulus payment based on a tax return. Treasury also can use the Social Security Administration (SSA) data to deliver a stimulus payment using the same payment information as the recipient’s Social Security benefits.” The Veterans Administration can also share similar administrative data.
Given social distancing and widespread closure of many public facilities, senior citizens and people with disabilities will face outsized barriers to filing a tax return. They won’t have easy access to assistance from non-profits or government agencies that could help, and online or phone assistance will be ineffective – especially for those who aren’t computer literate, or lack internet access. Family members won’t easily be able to provide face-to-face assistance, either.
EPI estimates that more than 15 million Social Security recipients currently don’t file tax returns and aren’t otherwise required to do so. The Treasury and IRS should aggressively use their authority to ensure every single person receiving Social Security benefits of any kind also receives their stimulus payment.
Contact your member of Congress now – tell them to call on the Secretary of the Treasury and IRS Commissioner to make a clear public statement that seniors, people with disabilities, veterans, and others who don’t usually file a tax return will automatically receive the economic stimulus rebate Congress intends for them.