Making Work Pay Credit

[Pedro]

This morning one of my Acks was rejected due that the amount claimed on was wrong compared with their records on SCH M.

Form:SCH M1040 Occurrence: 1 Seq:170

Schedule M Economic Recovery Payments Received does not match IRS records. An economic recovery payment may been received if social security benefits, supplemental security income, railroad retirement benefits, or veterans disability compensation or pension benefits were received.

My question is:

Is there a way to know how much a taxpayer received of Economic Recovery Payments during the tax year and fill the correct amount on SCH M?

Thank you

[Pacun]

This morning one of my Acks was rejected due that the amount claimed on was wrong compared with their records on SCH M.

Form:SCH M1040 Occurrence: 1 Seq:170

Schedule M Economic Recovery Payments Received does not match IRS records. An economic recovery payment may been received if social security benefits, supplemental security income, railroad retirement benefits, or veterans disability compensation or pension benefits were received.

My question is:

Is there a way to know how much a taxpayer received of Economic Recovery Payments during the tax year and fill the correct amount on SCH M?

Thank you

I think if people are collecting Social Security Benefits, they might have gotten $250 already. If I were you, I would try one more time by substracting $250 per head that collected social security benefits. I do understand how hard it is to get this info from your clients.

[Pedro]

I think if people are collecting Social Security Benefits, they might have gotten $250 already. If I were you, I would try one more time by substracting $250 per head that collect social security benefits. I do understand how hard it is to get this info from your clients.

Thanks for your time and your help Pacun, hope you have a great tax season

Pedro

[Edward]

If you have a copy of the 1040 express answers for 2009 tax year, it says the 250. will be received by adults if DURING THE MONTHS OF NOV 2008, DECEMBER 2008 OR JANUARY 2009 the individual person was ELIGIBLE to receive SS benefits, SSI, RR Act benefits or veterans compensation. Therefore if they have been receiving their benefits ALL YEAR (2009) they received the 250.00. I received the benefits all year and both my wife and I received SEPARATE deposits for the amounts. In addition we received a letter from the SSA which stated that this is a SEPARATE payment and is not included in the monthly benefits. The letter also states that the Dept of Treasury will offset these one-time payments to collect deliquent child support and debts owed to state and federal agencies. Regardless, each eligible individual has received a letter from the SSA explaining this payment. Just make certain you advise the clients in advance to bring the letter in - however if it appears they received the benefits ALL YEAR then you can feel fairly safe to know they did receive the payment. Hope this helps some!!

[TAXBILLY]

>>Therefore if they have been receiving their benefits ALL YEAR (2009) they received the 250.00.<<

Where in the 1040 Express Answers Book did you read this/

taxbilly

[JohnH]

I'm assuming that anyone who was receiving SS benefits before Nov 2008 did receive the $250 payment, so if they worked and are eligible for the MWP credit, I'm reducing it by $250. I'm also providing them a note explaining what I did. If they later get some sort of correction or adjustment from IRS stating that they are eligible for an additonal $250, I can refer them back to the note and explain how SSA made an error because they didn't follow their own guidleines.

(I might do a little more digging if the person actually began receiving benefits in the 4th quarter of 2009.)

[Edward]

Ref Taxbilly's post: Thats the way its stated. If during the months ov Nov 2008,Dec 2008, or January 2009 then they had to get the 250.00 unless the IRS kept the money for other debts. This info is in Tab 16-5 under ECONOMIC RECOVERY PAYMENT.

Ref JohnH: The 250.00 relates to those receiving SS from NOVEMBER 2008 THRU DEC 2009. They would not have received the rebate if BEFORE NOVEMBER 2008. Read my post again, it's NOVEMBER FORWARD - Not prior to NOvember 2008. The Payments were to be received by everyone eligible during May or June 2009.

[JohnH]

Ref Taxbilly's post: Thats the way its stated. If during the months ov Nov 2008,Dec 2008, or January 2009 then they had to get the 250.00 unless the IRS kept the money for other debts. This info is in Tab 16-5 under ECONOMIC RECOVERY PAYMENT.

Ref JohnH: The 250.00 relates to those receiving SS from NOVEMBER 2008 THRU DEC 2009. They would not have received the rebate if BEFORE NOVEMBER 2008. Read my post again, it's NOVEMBER FORWARD - Not prior to NOvember 2008. The Payments were to be received by everyone eligible during May or June 2009.

Yes, I understood exactly what you said. My comments related to the practical aspects of handling this issue in the middle of a busy tax season.

If they were receiving SS benefits prior to Nov, 2008, then they definitely received benefits Nov 2008 forward, and meet the presumptive test that they were paid the $250. That means I'm entering the $250 on the Schedule M if it's called for. My final comment was an attempt to clarify my point - if they began receiving benefits any time in the 4th quarter of 2008, I'd do a little more digging because it's likely they either fell on one side or the other of the cutoff or else SSA could have made a mistake in spite of their clearly defined rules.

[Edward]

In reference to my earlier posts on this subject: The following details were taken from the SS website: "The ARRA OF 2009 provides for one-time payments of $250.00 to individuals who WERE, OR ARE FOUND TO BE ELIGIBLE for Social Security and SSI benefits during any one of the three months (NOV 08,DEC 08 & JAN 2009)." Thus, if they became eligible FEB 09 thru DEC 09 THEY WILL NOT BE RECEIVING ANY kind of stimulus payment. "Individuals are only entitled to one payment regardless of how many types of benefits they receive. For example, if an individual receives any combination of SS, SSI, RR or Veterans benefits, they will only get one payment. The agency will issue one-time payments through Dec 31, 2010. NATP has confirmed what I've stated above.

[TAXBILLY]

>>Therefore if they have been receiving their benefits ALL YEAR (2009) they received the 250.00.<<

Where did you find this since it is incorrect.

taxbilly

[kcjenkins]

I intend to assume that anyone drawing SS in 2008 got the payment.

It does not matter if the payment was applied to some other debt, that is still considered a payment to them.

[TAXBILLY]

The point is you need not have drawn social security the entire 2009 to have qualified for the credit.

taxbilly

[Edward]

The AARA of 2009 clearly states that if individuals WERE ELIGIBLE, REPEAT, ELIGIBLE, for the particular benefit shown below "AT ANY TIME DURING THE PERIOD NOVEMBER 2008 THRU JANUARY 2009" they will receive the $250. payment:

a. Adults eligible for Soc Security Benefits, RR benefits, or veterans compensation or pension benefits.

b. Individuals of ANY AGE, repeat ANY AGE, eligible for SSI benefits, other than those receiving SSI while in a medicaid institution.

c. If the individual is eligible for the Making Work Pay Credit, that credit will be reduced by the 250.00.

d. Payments will be made by the SSA as soon as practical but NLT 6/17/09. (Act 2201).

Recapping the above, this would mean that 'OLD TIMERS' WHO HAVE BEEN OR WERE RECEIVING SOCIAL SECURITY BENEFITS PRIOR TO NOVEMBER 2008 WOULD AUTOMATICALLY BE CONSIDERED AS HAVING RECEIVED THE 250.00 BENEFIT PAYMENT.

For the 'SHORT TIMERS', THEY WOULD ALSO AUTOMATICALLY BE CONSISDERED AS HAVING RECEIVED THE 250.00 BENEFIT PAYMENT - IF THEY QUALIFIED, REPEAT QUALIFIED FOR THEIR PARTICULAR BENEFITS DURING THE PERIOD OF "NOVEMBER 2008 THRU JANUARY 2009"

For the 'NO TIMERS', IF THEY BECAME ELIGIBLE FOR THEIR BENFITS FROM "FEBRUARY 2009 THRU DECEMBER 2009, THEY WILL NOT GET THE $250.00 BENEFIT PAYMENTS.

[Chowdahead]

I intend to assume that anyone drawing SS in 2008 got the payment.

It does not matter if the payment was applied to some other debt, that is still considered a payment to them.

But don't the rules specifically say the person must have been eligible for benefits November 2008, December 2008, and January 2009? Or does a person being eligible those three months indicate the person was eligible all of 2009?

[elfling]

>>Therefore if they have been receiving their benefits ALL YEAR (2009) they received the 250.00.<<

The above statement is FALSE. One of my dearest clients DID in fact receive the $250 in May 2009. I know this because she used my services to balance her checkbook, write out her checks, pay her bills, etc. So it was me who entered that deposit into her check register directly from the bank statment. However, since she died November 12, 2009, she certainly did not receive benefits ALL YEAR. A December SS benefit payment was never issued.

[Tax Prep by Deb]

>>Therefore if they have been receiving their benefits ALL YEAR (2009) they received the 250.00.<<

The above statement is FALSE. One of my dearest clients DID in fact receive the $250 in May 2009. I know this because she used my services to balance her checkbook, write out her checks, pay her bills, etc. So it was me who entered that deposit into her check register directly from the bank statment. However, since she died November 12, 2009, she certainly did not receive benefits ALL YEAR. A December SS benefit payment was never issued.

But she did receive one in November, thus making her eligible.

Deb!

[elfling]

Correct!! I had no question of that fact. My observation was that one need not receive benefits for all of year 2009. A person who no longer receives benefits part way through 2009 whether it be by reason of death, illness recovery to the point of returning to the workforce, or some other fluke, may have received the $250. The opposite situation exists, no payment, if eligibity was determied too late of if tp died prior to the distribution of the benefit payment. That may or may not impact a final return on behalf of a decedent.

I believe the snagging within this thread is coming from a quirky mixture of 2008 vs. 2009 dates. The guidelines set to be eligible were determined using Nov & Dec 2008 and Jan 2009. Necessary, but it opens up gaps in several scenarios.

Elfling

[TAXBILLY]

The AARA of 2009 clearly states that if individuals WERE ELIGIBLE, REPEAT, ELIGIBLE, for the particular benefit shown below "AT ANY TIME DURING THE PERIOD NOVEMBER 2008 THRU JANUARY 2009" they will receive the $250. payment:

a. Adults eligible for Soc Security Benefits, RR benefits, or veterans compensation or pension benefits.

b. Individuals of ANY AGE, repeat ANY AGE, eligible for SSI benefits, other than those receiving SSI while in a medicaid institution.

c. If the individual is eligible for the Making Work Pay Credit, that credit will be reduced by the 250.00.

d. Payments will be made by the SSA as soon as practical but NLT 6/17/09. (Act 2201).

Recapping the above, this would mean that 'OLD TIMERS' WHO HAVE BEEN OR WERE RECEIVING SOCIAL SECURITY BENEFITS PRIOR TO NOVEMBER 2008 WOULD AUTOMATICALLY BE CONSIDERED AS HAVING RECEIVED THE 250.00 BENEFIT PAYMENT.

For the 'SHORT TIMERS', THEY WOULD ALSO AUTOMATICALLY BE CONSISDERED AS HAVING RECEIVED THE 250.00 BENEFIT PAYMENT - IF THEY QUALIFIED, REPEAT QUALIFIED FOR THEIR PARTICULAR BENEFITS DURING THE PERIOD OF "NOVEMBER 2008 THRU JANUARY 2009"

For the 'NO TIMERS', IF THEY BECAME ELIGIBLE FOR THEIR BENFITS FROM "FEBRUARY 2009 THRU DECEMBER 2009, THEY WILL NOT GET THE $250.00 BENEFIT PAYMENTS.

Why are you shouting??

taxbilly

[Catherine]

Why are you shouting??

taxbilly

Possibly hard of reading?

[TAXBILLY]

Possibly hard of reading?

Now that's punny, C :~)

taxbilly