Economic Recovery Payments
Are we recovered yet? Maybe not quite. Did you do your part in spending the bonus all you retirees got last year? Bonus? Well, that's how I see it.
This was a $250 'bonus' paid in May 2009 to almost everyone who was receiving benefits from either Social Security, Railroad Retirement, Veterans Administration, or Supplemental Security Income. (Did you notice the "almost"?)
You had to have been receiving one of these benefits during either November or December 2008, or January 2009 in order to be eligible for this one-time payment. If you did not begin receiving Social Security or one of the other benefits until February 2009 or later, then you missed out. Tough luck, but that's the rules.
The payments were not paid to children who receive Social Security or other benefits, but were paid to those who receive SSI.
If you are a fugitive felon, a prisoner, a probation or parole violator, or fall under certain other exceptions, you were not entitled to this payment. Bummer, man. (If you fall under one of those categories, I doubt that you are reading this blog anyway.)
The payments were paid as a separate payment, not combined with your regular monthly benefits. If you owed money for back child support, late student loan payments, or delinquent taxes, this payment was likely applied to that debt, rather than being paid to you directly. If you believe you were eligible, but did not receive the payment, you should contact the Agency which pays your normal benefits, e.g. VA or Social Security.
The $250 payment will not be included on your Form 1099 from Social Security, et al, and is not taxable. Unlike the Stimulus payments we received in a prior year, this payment was not paid by the IRS, so we cannot ask the IRS whether or not you received it.
Why is this important? If you worked in 2009, you may be eligible for the $400 Making Work Pay Credit on this year's tax return. But, the $400 must be reduced by the $250 payment, if you received it, giving you a tax credit of up to $150 instead.
Finally, if you were a government retiree who is not covered by Social Security or one of these other agencies, you did not receive the $250. But Uncle Sam didn't want to leave you out of the equation either. In this case, when you file your 2009 return, you will claim the $250 as a "Government Retiree Credit."
These payments and credits are to be a one-time only event, at least until Congress changes its' mind. The Making Work Pay Credit, however, is a two-year deal for 2009 and 2010. See my previous blog for further info on that one.
So, what is the basic summary of all this?
- If you received the $250 in about May, 2009 and didn't work at all in 2009, you have nothing further to do in this respect. You're done. Hooray!
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If you received the $250 and worked during the year, you might be entitled to another $150 on your tax return. Whoopee!
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If you didn't get the $250 and think you should have, get on the phone and call your Social Security, VA or Railroad Retirement office to check it out.
Now, get out there and spend that $250, if you haven't already! Help our economy recover! Go! Go! Go!
