Another MWP Credit Question

[BulldogTom]

Client is retired from CHP. The Sch M says if you are retired from US Govt or state job where your earnings were not subject to SS tax, you should have gotten the 250. But from who? I asked the client if he got the money and I got the typical "I don't know" answer. Then he asked who he should call to find out. I suggested he look at his bank statements.

But the question is a good one. Who is supposed to be making the $250 payments to retirees? Anyone know?

Tom

Fresno, CA

[MontanaEA]

The $250 will be paid as a refund on the 1040 IF you fill out Sch M stating that the taxpayer did NOT receive $250 from SSA, Vet Ret, or RR Ret, AND "YES" that they have a public pension from a job not subject to SOC SEC tax.

[BulldogTom]

OK, so now I am confused. So no one paid him anything during the year? It was only SS, Veterans, and RR beneficiaries that got the 250 payment?

Is this is what is going on? Then, if you are a retiree and you don't earn enough to qualify for the $400, you can get $250 on your return? But if you make enough, you get the 400, or if your spouse works and makes enough, you get the $800?

Holy crap. This should not be this freaking hard.

Tom

Lodi, CA

[mekCPA]

LOL 'dog. I couldn't agree more. I had a post today asking MWP 101-type questions and thankfully this Board rocks and I got some clarification.

Additionally, I had two eFile rejections for retired TPs who had Federal Government or City Government pensions and each also had SSA retirement income.

Asked both if they had gotten the $250 prior to filing and they said no. After both returns came back rejected for MWP saying records show they already got it, (returns had Sch M credit), I discussed with them, one now remembers "getting a letter from SSA that said something about $250" but she never "got" $250. The other still contends they got nothing from the SSA in either the form of a letter or cash-ola. Both agreed to remove the $250 credit and refile. I am waiting for the eFile ACKS on those two now.

So, I couldn't say it better ....holy carp...this should not be so freaking hard.

At least now I know, better now when it is slower than April 14!

[Crank]

I thought I read somewhere that there was a website to check if the TP got the $250. Anyone know of it?

[TAXBILLY]

I thought I read somewhere that there was a website to check if the TP got the $250. Anyone know of it?

To which $250 are you referring?

If it is people who are not in the social security system they will receive it on Schedule M.

taxbilly

[Jack from Ohio]

I thought I read somewhere that there was a website to check if the TP got the $250. Anyone know of it?

No such creature, and no plans by IRS to put one up. Yet, their system "knows" if the taxpayer received the payment or not.

Anyone in Congress that thinks the average taxpayer pays any attention to letters sent them, or even remembers receiving the $250 dollars is living in in the land that is... "Second star on the right, straight on till morning."

Remember the stimulus payment debacle??

So far, 90% of our clients at the firm that DID receive the payments either:

1) Swore"I NEVER received the payment or a letter."

2) "Don't remember anything like that at all."

EVERY one that claimed one of the above "rejected" due to Sch M not agreeing with IRS records.

We have quit asking. Claim they have received the payment on their return. Then if it is rejected, they love me when I call and tell them they are getting $250 more.

People never change, and always take the path of least resistance.

[mekCPA]

We have quit asking. Claim they have received the payment on their return. Then if it is rejected, they love me when I call and tell them they are getting $250 more.

This method works? I had assumed if I did this it would go through as filed, then months later the TP would get correspondence and a check in the mail for the $250.

You know what happens when they get a letter from the IRS saying they are getting a refund because the IRS knew of additional deductions that were not on their return (mortgage interest, etc).....TP questions why we "missed" that, although they didn't tell us of that amount to include in their return because they lost the 1098 or it got sent to a different address, or it came after they gave us their stuff and they never let us know.

I was considering doing it the opposite way....filing by taking the $250 credit, let them know it could reject and we'd have to take the credit off and resubmit. I was not looking forward to those conversations either.

So, if this method of "not" taking the credit when the TP is entitled to it will cause the eFile to reject, I much prefer the "bearer of good news" method to tell them they are getting another $250 back.

You've had success with this? I did not expect the IRS cross checks to be this sophisticated, but am glad if they are!

[Jack from Ohio]

This method works? I had assumed if I did this it would go through as filed, then months later the TP would get correspondence and a check in the mail for the $250.

You know what happens when they get a letter from the IRS saying they are getting a refund because the IRS knew of additional deductions that were not on their return (mortgage interest, etc).....TP questions why we "missed" that, although they didn't tell us of that amount to include in their return because they lost the 1098 or it got sent to a different address, or it came after they gave us their stuff and they never let us know.

I was considering doing it the opposite way....filing by taking the $250 credit, let them know it could reject and we'd have to take the credit off and resubmit. I was not looking forward to those conversations either.

So, if this method of "not" taking the credit when the TP is entitled to it will cause the eFile to reject, I much prefer the "bearer of good news" method to tell them they are getting another $250 back.

You've had success with this? I did not expect the IRS cross checks to be this sophisticated, but am glad if they are!

If the information DOES NOT MATCH IRS RECORDS, the e-file gets rejected.

We (I) have experienced all 4 possible rejection scenarios with this form. Our firm has done 500+ returns to date this tax year. I am in charge of the e-file and "fixing" the problems when they arise. We have 7 preparers in our office.

[mekCPA]

If the information DOES NOT MATCH IRS RECORDS, the e-file gets rejected.

We (I) have experienced all 4 possible rejection scenarios with this form. Our firm has done 500+ returns to date this tax year. I am in charge of the e-file and "fixing" the problems when they arise. We have 7 preparers in our office.

Good to know, thank you for sharing your knowledge and experience with the rest of us. To date I've only had two of these, so this is a whole learning curve for me, and again, I really appreciate your willingness to share what you know with those of us just coming up on these!

[Crank]

I was referring to the $250 received by SS recipients. I thought there was a website to check it. Just because of the people that claim they never received it.

[David1980]

I was referring to the $250 received by SS recipients. I thought there was a website to check it. Just because of the people that claim they never received it.

The IRS did release a way for us to find out.

The way is you file the return, and if it doesn't match their records it rejects.

Very convenient, we should thank them.

/sarcasm

[TaxmannEA]

The IRS did release a way for us to find out.

The way is you file the return, and if it doesn't match their records it rejects.

Very convenient, we should thank them.

/sarcasm

I just discovered the 3rd. method. File the return showing $250 received, it rejects. Change to $0 received, it rejects. Call SSA, they have no clue. File on paper.