Senior Tax Legal Analyst
Roughly 1 million children may miss out this year on the $500 stimulus payment their parents or guardians are supposed to receive if the parents or guardians don’t complete an online IRS form under an unreasonable deadline, with 600,000 of these children at risk if the form is not filed by noon tomorrow, April 22. This deadline is unreasonable and unnecessary.
The Treasury Department and the IRS rightly decided to provide $1,200 stimulus payments automatically to adult recipients of Social Security, railroad retirement benefits, Supplemental Security Income (SSI), and certain veterans’ pension and disability benefits who don’t usually file a tax return, instead of making them file one. But just yesterday, the IRS announced that Social Security (including Social Security Disability Insurance) recipients and railroad retirees caring for child dependents must declare them on an online IRS form by noon tomorrow so the IRS can add the extra $500 for dependents to their stimulus payment.
Recipients of SSI and veterans’ benefits who don’t usually file a tax return will have “slightly more time” to fill out the form, the IRS said, but they’ll likely face a tight deadline too.
Many Social Security beneficiaries and SSI recipients have children or responsibility for grandchildren or other relatives. This group includes Social Security Disability Insurance beneficiaries and recipients of Social Security survivors’ benefits who became disabled or lost a spouse while their children were still minors. It also includes retirees who had children later in life or are caring for grandchildren.
Those parents and guardians who miss the deadline can only receive their extra $500 next year, and to do so they’ll have to file a full tax return for 2020 even if they don’t otherwise need to file a return. Even during normal times, many of these people — who include low-income seniors, very low-income people with disabilities, and veterans with disabilities and other challenges — would have trouble filling out the IRS form, especially within a rigid 48-hour deadline. And these are not normal times.
Given stay-at-home orders and the public health imperative for everyone — but particularly those who are older or have health conditions — to avoid face-to-face contact, the affected beneficiaries will have to rely on phone and the internet for help. Many won’t know about the deadline, announced with less than two full days’ notice, or have the internet access or capacity to understand the form on their own.
Instead of imposing an onerous deadline that few will be able to meet, Treasury and the IRS should quickly provide the automatic $1,200 payments to federal benefit recipients while giving households more time to fill out the IRS form to add remaining household information, including information about any dependents. Using that information, the IRS has the ability to determine whether the household qualified for any additional payments and make these subsequent payments — and do so accurately.
Specifically, once the IRS makes the automatic payments, it will have a list of the recipients and their Social Security numbers; when some recipients later submit information via the online form about dependents, the IRS should be able to avoid making duplicate payments to recipients of the automatic payments and provide benefits based on the presence of dependents. The CARES Act, which authorizes the stimulus payments, allows Treasury to enact rules preventing households from receiving duplicate payments but doesn’t prevent the IRS from making payments in multiple installments after learning new information about a household.
It’s reasonable for the IRS to make these subsequent dependent payments after processing other automatic payments, rather than right away. That delay, however, will be far shorter than the delay if recipients of Social Security, SSI, railroad retirement benefits, and certain veterans’ benefits must wait until they file a full 2020 tax return in early 2021 to receive payments, especially since many of them may not be able to navigate filing a full return.
We commend the IRS for its hard work over the last several weeks to make sure federal benefit recipients who don’t have to file taxes receive their stimulus payments automatically. But there’s no reason to add to the burdens on those with children by making them navigate an online form on an extraordinarily short timeline. Instead, the IRS should issue their payments in separate installments: the bulk of it now, using information it already has, and the rest of it later, when these individuals can safely fill out their forms after the health crisis eases — but without making them wait until next year and file a 2020 tax return.