COVID-19 and Direct Payments to Individuals: Economic Impact Payments (EIPs) for Social Security and Supplemental Security Income Beneficiaries

The Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) provides emergency relief measures in response to the Coronavirus Disease 2019 (COVID-19) pandemic. Section 2201 of the CARES Act provides recovery rebates for most individuals, structured as automatically advanced tax credits disbursed by the Treasury Department. The Internal Revenue Service (IRS) refers to the payments made in 2020 as Economic Impact Payments (EIPs). (These payments are also known as "stimulus checks" or "stimulus payments.") This Insight addresses EIPs from the perspective of Social Security and Supplemental Security Income (SSI) beneficiaries.

Overview of Economic Impact Payments (EIPs)

Eligible individuals can receive an EIP of $1,200 per person ($2,400 for married joint filers) via direct deposit or a check by mail. Eligible individuals can also receive an additional $500 payment for each child under 17 years old who is eligible for the child tax credit (hereinafter qualifying child).

The EIP is reduced by $5 for every $100 of adjusted gross income (AGI) above $75,000 for individuals, $112,500 for heads of households, and $150,000 for married joint filers. Consequently, it is not payable to individuals (with no qualifying children) with AGI above $99,000 or married joint filers (with no qualifying children) with AGI above $198,000. A married couple with two eligible children is ineligible for an EIP with AGI above $218,000.

Nonresident aliens, individuals who could be claimed as a dependent by another taxpayer, and estates or trusts are ineligible for the EIP. Taxpayers must have provided a Social Security number (SSN) for themselves, their spouse (if married filing jointly), and any qualifying child, with some exceptions for adopted children and military families.

The EIP is automatically advanced to eligible individuals in 2020 based on their 2019 federal income tax return. For eligible individuals who did not file a 2019 return, the payment is automatically advanced based on 2018 return information. For eligible individuals who were Social Security beneficiaries in 2019 and who were not required to file a federal tax return because their incomes were below the filing threshold, the law permits the IRS to automatically advance the $1,200 payment using the information from their 2019 Social Security Benefit Statement.

The EIP is not subject to federal income tax. The payment is not treated as income, or as a resource for a 12-month period, in determining an individual's eligibility or assistance amount under any federally funded public program. Receiving an EIP in 2020 does not affect a taxpayer's 2020 income tax liability or tax refund.

EIP Eligibility for Social Security and SSI Beneficiaries

All Social Security beneficiaries—retired workers, disabled workers, eligible family members, and survivors—and SSI recipients are eligible for the $1,200 EIP unless they are claimed as a dependent on a taxpayer's return or do not meet the other eligibility requirements. The term Social Security beneficiaries includes Social Security Disability Insurance (SSDI) beneficiaries. The payment is not counted as income, or as a resource for a 12-month period, in determining an individual's eligibility for SSI or the amount of the SSI payment.

Actions Required of Certain Social Security and SSI Beneficiaries to Automatically Receive Their Payments

Eligible individuals who filed an income tax return for 2018 or 2019, including Social Security and SSI beneficiaries, do not need to take any further action to receive the $1,200 EIP and the $500 payment per qualifying child. However, if a qualifying child is not listed on a 2018 or 2019 income tax return, but will be included on a 2020 tax return, then eligible individuals will generally receive the $500 payment per qualifying child when they file their 2020 income tax return in early 2021.

Social Security and SSI beneficiaries who do not have qualifying children, and who did not file a tax return for 2018 or 2019, also are not required to take any further action and are to receive their $1,200 payment by direct deposit, Direct Express debit card, or paper check, just as they would normally receive their monthly benefits. However, beneficiaries with qualifying children, as well as new beneficiaries since January 1, 2020, who did not file an income tax return for 2018 or 2019 will need to take further action to automatically receive all payments for which they are eligible.

Social Security and SSI Beneficiaries Who Do Not Have Qualifying Children

Social Security and SSI beneficiaries who do not have qualifying children under 17 years old are not required to take any action to receive the EIP. The Treasury Department, Social Security Administration (SSA), IRS, and Bureau of the Fiscal Service have arranged for these beneficiaries to automatically receive the $1,200 EIP. This includes all beneficiaries without qualifying children, regardless of whether or not they filed a tax return for 2018 or 2019.

Social Security and SSI Beneficiaries Who Have Qualifying Children and Who Did Not File a Tax Return for 2018 or 2019

Social Security Beneficiaries. Social Security beneficiaries who did not file an income tax return for 2018 or 2019 and who have qualifying children are to automatically receive the $1,200 EIP no later than the end of April. However, those beneficiaries need to take further action to automatically receive the $500 payment per qualifying child. On April 20, 2020, the IRS and SSA announced that these beneficiaries need to provide information about qualifying children by noon Eastern time on April 22, 2020, using the special IRS Non-Filers: Enter Payment Info Here tool. On April 24, 2020, the IRS and SSA announced that beneficiaries who missed the April 22 deadline are required to file a 2020 income tax return (in early 2021) to receive the $500 payment per qualifying child.

SSI Recipients. SSI recipients who did not file an income tax return for 2018 or 2019 and who have qualifying children are to automatically receive the $1,200 EIP by early May. However, these recipients also need to provide information about qualifying children through the special IRS Non-Filers: Enter Payment Info Here tool to receive the $500 payment per qualifying child. On April 24, 2020, the IRS and SSA announced that these recipients need to enter information about qualifying children by May 5, 2020. Otherwise, they would be required to file a 2020 income tax return (in early 2021) to receive the $500 payment per qualifying child. SSA indicated that SSI recipients who enter information about qualifying children by May 5, 2020, will receive both their own $1,200 payment and each qualifying child's $500 payment either by direct deposit to a bank account or by paper check; the payments will not be issued to a Direct Express debit card.

New Social Security and SSI Beneficiaries Since January 1, 2020, Who Did Not File a Tax Return for 2018 or 2019

According to SSA, Social Security and SSI beneficiaries who first started receiving benefits since January 1, 2020, and who did not file an income tax return for 2018 or 2019 will need to use the special IRS Non-Filers: Enter Payment Info Here tool to automatically receive their own $1,200 EIP and the $500 payment per qualifying child. SSA indicated that they may only enter non-Direct Express bank account information to receive the payment by direct deposit, or they may leave bank information blank to receive the payment by paper check. Otherwise, those beneficiaries would be required to file a 2020 income tax return (in early 2021) to receive their payment.

Additional Guidance

For detailed guidance about various scenarios for Social Security and SSI beneficiaries, see the following resource:

For more guidance, see the following resources: