Some Social Security recipients are to get stimulus checks starting yesterday. If you’re one of the many who has received a payment, or expecting one, here are a few key things you should know.

The Coronavirus Aid, Relief, and Economic Security Act (or CARES Act) entitles most Americans to stimulus checks. Social Security beneficiaries are among those eligible for a check if their income doesn’t exceed the limits for receiving one.

Here is what you need to know when it comes to ensuring you get the full amount of money and to understand what the payment means for your finances. 

Social Security Recipients Eligibility

Many Americans that receive extra Social Security benefits for low-income aged, blind or disabled people are likely to receive their stimulus payments yesterday (Monday 18th May) or through the mail beginning on Friday, according to the Social Security Administration. 

Some 8 million people get Supplemental Security Income, many with disabilities that typically prevent them from working. The average monthly benefit is $541. That means the stimulus payments — authorized under the $2.2 trillion CARES Act — amounts to a significant cash influx for most SSI recipients. 

The stimulus payments are $1,200 for single people who earn less than $75,000, while married couples who earn less than $150,000 will receive $2,400. Children are eligible to get $500. Among the tips from the Social Security Administration is guidance on when SSI recipients who don’t file tax returns will start receiving their payments. “You should receive your $1,200 payment in the same way you receive your monthly SSI payment: Direct Deposit and Direct Express by May 13; Paper checks will begin May 15,” according to the guidelines.

Income for Tax Calculations/Benefits Eligibility  

When you see this cash hit your bank account, you may be concerned it could affect your tax bill, particularly if you’re on the cusp of having some of your Social Security benefit subject to income tax. However, the money doesn’t count as income for tax calculations or benefits eligibility…  

The stimulus money isn’t counted for this calculation, so it will have no effect on whether you have to pay tax on Social Security. Not only that, but you also won’t be subject to federal tax or state tax on the stimulus payment.

For those receiving means-tested Supplemental Security Income (SSI), the stimulus payment also won’t affect your benefits eligibility since it will not count as income. And it will not be factored into financial resources calculations for 12 months.

Automatic SSDI Disability & VA Beneficiaries

Stimulus payments will also go out automatically to Social Security Disability Insurance (SSDI) recipients who were not required to file tax returns for 2018 or 2019. Like Social Security beneficiaries, SSDI beneficiaries also receive SSA-1099 benefits statements every January, which the IRS will use to send the payments.

The IRS also has announced that people who receive Compensation and Pensions (C&P) benefits from the Department of Veterans Affairs will receive their stimulus payments automatically even if they have not filed tax returns for 2018 or 2019. The IRS, which made the announcement on April 17, did not say when the stimulus payments would be sent to VA beneficiaries.

Missing Stimulus Payments

Social Security recipients have faced a number of hurdles to getting their stimulus payments. Millions of families are counting on government stimulus payments to get some financial relief amid the coronavirus pandemic. However, some are opening their bank accounts to find an unwelcome surprise: payments that exclude their qualifying children. A qualifying child has to be under 17 years old. For Social Security recipients who don’t file tax returns, the IRS may not have information about those children. If you missed the deadline for non-filers to tell the IRS about their dependents on May 5 — that means those consumers will receive their stimulus payments of $1,200, but not the $500 per child.

But don’t panic just yet! You will have a chance to claim the $500 next year if you file a tax year 2020 tax return.

The IRS has an online tool to check your payment status, but that too has been frustrating for many people because it often says “status not available” due to the large amount of online traffic. The IRS is adding more data every day so keep checking!

Final Thoughts

Understanding how stimulus payments work will help you maximize your benefits. You can also use the money to spend, save, or invest (if you’re still working, you may be able to put your stimulus check money in an IRA and save it for later) without having to worry about any tax implications or effects on future benefit eligibility.

The stimulus payment is meant to help you during these financially challenging times, so make sure you get what you deserve! If you still have questions about your stimulus check, call the phone number listed on the bottom of their stimulus check letter, 800-919-9835. The IRS said Monday that once you call that number there will be an automated message to help answer most questions.

Still have concerns about your retirement plans due to the pandemic? CKS Summit Group are here for you. Together, we can help you enter retirement with both your financial plan and your head in the right place. Call us on 586-286-5820 to set up your complimentary strategy session today.