TonyP Posted February 14, 2009 Report Share Posted February 14, 2009 I have an elderly client (over 65) who receives Social Security, two Pensions reported on 1099-Rs, and a small amount of interest income. One of the Pensions is $7,000 all of which is taxable. The other Pension has 26,000 as a Gross Distribution (Block 1) and zero (-0-) in Block (2a) taxable. The code on that pension is "3" , a death benefit. The client has no withholding credits, so it's a no-refund tax return. The question that I have; is this client required to file a return? Social Secuity income is not counted in the Gross Income determination for filing a tax return. However, does the non-taxable 1099-R pension counted/considered in the Gross Income test for determining if a return is required to be filed? If it is excluded like the Sociial Security income, then my client is not required to file,.. if it is not excluded then she is required to file. I'm not sure if it's excluded or included. Quote Link to comment Share on other sites More sharing options...
OldJack Posted February 14, 2009 Report Share Posted February 14, 2009 A return is required since the $7,000 and $26,000 are taxable income. Quote Link to comment Share on other sites More sharing options...
TAXBILLY Posted February 14, 2009 Report Share Posted February 14, 2009 Check the code again. Code 4 is death benefit, code 3 is disability under the age of 65. If she didn't file a 2007 return she may be eligible for the recovery credit. taxbilly Quote Link to comment Share on other sites More sharing options...
TonyP Posted February 15, 2009 Author Report Share Posted February 15, 2009 Check the code again. Code 4 is death benefit, code 3 is disability under the age of 65. If she didn't file a 2007 return she may be eligible for the recovery credit. taxbilly Sorry, it's coded as "disability income" code 3. She filed and received a rebate last year. Since the 26,000 is coded as 3-Disabilty Income, it seems that she doesn't need to file a tax return for 2008; no rebate/stimulus is involved in 2008. Am I correct in this determination? Quote Link to comment Share on other sites More sharing options...
Joel Posted February 15, 2009 Report Share Posted February 15, 2009 TonyP Since she receives social security she will be eligible for the $250.00 Economic Recover Payment in the stimulus bill just passed and expected to be signed by the President on Tuesday. It looks like the same procedure will be used as last year so I would file a return after the instructions come out. Quote Link to comment Share on other sites More sharing options...
TonyP Posted February 15, 2009 Author Report Share Posted February 15, 2009 TonyP Since she receives social security she will be eligible for the $250.00 Economic Recover Payment in the stimulus bill just passed and expected to be signed by the President on Tuesday. It looks like the same procedure will be used as last year so I would file a return after the instructions come out. Joel, I haven't heard or seen anything in the Stimulus Bill to be signed by Obama this week that will provide a new rebate on 2008 tax returns based on the 2009 Tax Law. What I recall seeing is something like a withholding adjustment equating to $500 per individual or $1,000 for joint return filers. That rebate was/is to be taken through a reduction of withholding rates for W-2 filers or possibly from withholdings in pensions. I haven't seen anything that would allow a rebate as was done on 2007 tax returns, maybe I missed something about a new rebate that would work just like the last one. Quote Link to comment Share on other sites More sharing options...
TAXBILLY Posted February 15, 2009 Report Share Posted February 15, 2009 It's in here: http://tax.cchgroup.com/Legislation/House-...ry-Act-2009.pdf taxbilly Quote Link to comment Share on other sites More sharing options...
Joel Posted February 16, 2009 Report Share Posted February 16, 2009 TonyP Taxbilly's reference to the cch pdf is where I got the $250.00. Joel Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted February 16, 2009 Report Share Posted February 16, 2009 Yep - social security recipients are supposed to get an extra check this year for 250 bucks. I think the SSA is handling this one instead of the IRS and I don't think filing a tax return has anything to do with it. The new working families tax credit is going to be accomplished by changes to the withholding tables so that at the end of the year you owe 400/800 less on your taxes and you had 400/800 less withheld. It is a refundable credit. Tom Lodi, CA Quote Link to comment Share on other sites More sharing options...
TAXBILLY Posted February 16, 2009 Report Share Posted February 16, 2009 Don't see how SSA can handle it because it does not affect only social security recipients but also those who receive disability well as retired government workers who are ineligible for social security. I suspect we will be filing returns similar to last year. I'm not complaining ... more money for us. taxbilly Quote Link to comment Share on other sites More sharing options...
Tax Prep by Deb Posted February 16, 2009 Report Share Posted February 16, 2009 Don't see how SSA can handle it because it does not affect only social security recipients but also those who receive disability well as retired government workers who are ineligible for social security. I suspect we will be filing returns similar to last year. I'm not complaining ... more money for us. taxbilly I've heard it both ways. Originally what Tom heard was that it would be a onetime addional 250.00 for those on Social Security, however the link that TAXbilly gave said a check based on tax return filing. I hope someone lets us know soon as I will have a list of clients to call in to do their returns. Deb! Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.