Following a few days of national outcry, the IRS reversed course on Wednesday, April 1, 2020, and announced that Social Security recipients who do not usually file taxes will receive stimulus payments under the CARES Act automatically.
The IRS’s decision should be celebrated, but it doesn’t go far enough. Three million seniors and people with disabilities who receive Supplemental Security Income (SSI), a Social Security program for people with very low incomes, will still have to file taxes to receive financial help during the COVID-19 crisis. So will other low income people who don’t otherwise need to file taxes each year.
The tax filing requirements are a problem for four reasons:
- They’re unnecessary. People who receive SSI already receive direct payments from the federal government on a monthly basis, and the Social Security Administration can share the necessary information for stimulus payments with the IRS without too much trouble.
- They’re confusing. Because people who receive Social Security benefits no longer have to file taxes to receive stimulus payments, SSI recipients may be confused about their own tax filing obligations. If they don’t file taxes, they may not receive stimulus payments quickly enough to address a housing crisis or other emergency.
- They’re unreasonable. Many SSI recipients have lifelong conditions like intellectual disabilities that make navigating the tax system particularly difficult. And most sources of free, high quality tax help, like walk-in Volunteer Income Tax Assistance (VITA) sites, are closed during the COVID-19 crisis. Even the few “virtual VITA” sites that are open lack the capacity and special software necessary to help SSI recipients and other people without any taxable income to file taxes.
- They’re risky. Because free tax help is not widely available to people who need it, SSI recipients will be at risk of high tax filing fees and even tax scams that will keep them from getting the financial help they need from the stimulus payments.
The IRS should act quickly to protect SSI recipients and other people who do not otherwise have to file taxes in two ways:
- First, the IRS should make stimulus payments available directly to SSI recipients and other people who get federal payments, like certain veterans’ benefits, without requiring them to file taxes. This important first step will get money into the hands of people who need it without creating confusion, unnecessary burdens, or risk of financial harm.
- Second, the IRS should work quickly to ensure that free, high quality VITA sites have the funding, technology, and other resources that they need to complete online tax returns for other low income people quickly and easily.
If the IRS will not act immediately, it’s vitally important that Congress mandates these actions in its next COVID-19 relief bill. And it’s equally important that Congress continue to seek out other pathways to get financial help in to the hands of all low income people who would not otherwise file taxes.
Call your Congressperson and tell them to push the IRS take common-sense steps to get money into the hands of SSI recipients and other low income people who urgently need it.