Questions answered about your stimulus payment

With recent federal government action under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) passed by Congress, millions of Americans have received or are expecting to receive a stimulus payment, most in the amount of $1,200. Parents of minor dependent children may receive an additional payment of $500.

The payment of these funds, as with other government programs, raises questions. Who is entitled to receive a stimulus payment, when will it be received, is it taxable, and does it count against you if you receive other government benefits are some of the questions asked. This column will attempt to answer some of these questions but recognizes there are more.

First, if you already receive payments directly from the government by automatic deposit to a bank account, the chances are good that you have already received payment into your account. Payments dependent on checks through the mail are likely taking longer.

QUESTION NO. 1 » If a check names a person who is deceased do I need to return it? The answer is “yes, “with one exception. The exception is that, while the entire payment must be returned where the payment was made to one person, if the payment was made to joint filers, eg. husband and wife, and one spouse died and the other survived, then only the portion of the payment made on account of the decedent needs to be returned.

This is how to return a payment to a deceased person according to IRS guidelines.

If the payment was a paper check and made payable to an individual deceased person: (1) Write “void” in the endorsement section on the

back of the check; (2) Mail the voided Treasury check immediately to the appropriate IRS location. The location for Pennsylvania is Philadelphia Refund Inquiry Unit, 2970 Market St., DP 3-LO8-151, Philadelphia, PA 19104; (3) Do not staple, bend, or paper clip the check; (4) Include a note stating the reason for returning the check. I would, where possible, send by some form of mail with tracking. US Postal Service Priority Mail With Tracking may be a good idea.

On the other hand, if the payment was directly deposited to an account or was a paper check and was cashed: (1) Submit a personal check, money order or similar payment immediately to the appropriate IRS location (see above for address for Pennsylvania). (2) The check or other payment should be made payable to “U.S. Treasury.” (3) The memo on the check should state “2020EIP” and the Taxpayer ID Number (usually the Social Security Number) of the person to whom the check was made payable. So, if one spouse is deceased and the original payment by the government was made payable to both, then a check or other payment for $1,200 should be returned to the government and the other $1,200 can be kept by the surviving spouse.

QUESTION NO. 2 » If I receive Medicaid or SSI (Supplemental Security Income), will my benefits be terminated or reduced because I receive a stimulus payment? The answer generally is “no.” However, there are a few actions you should take. First, Medicaid and SSI can be dependent on income and asset requirements. The stimulus payment will not be counted as “income” and, therefore, will not disqualify you from benefits for any income dependent program under Medicaid or SSI. Also, it will not be counted as an “asset” for a period of one year. You can spend the payment as you wish with one exception. You cannot “gift” it away. Gifts under Medicaid rules can result in penalties. So you can use the stimulus check for your own needs, keep track of how it is spent, and make certain it is spent within the year from receipt.

QUESTION NO. 3 » Does everyone receive a stimulus payment? Not everyone. If your adjusted gross income is too high to qualify or if you are claimed as a dependent on someone else’s tax return or have no Social Security number or are a nonresident alien you would not qualify. If you are not sure, check.

Janet Colliton, Esq. is a Certified Elder Law Attorney and limits her practice to elder law, retirement and estate planning, Medicaid, Medicare, life care and special needs at 790 East Market St., Suite 250, West Chester, Pa., 19382, 610-436-6674, colliton@ collitonlaw.com. She is a member of the National Academy of Elder Law Attorneys and, with Jeffrey Jones, CSA, cofounder of Life Transition Services LLC, a service for families with long term care needs. Tune in on Wednesdays at 4 p.m. to radio WCHE 1520, “50+ Planning Ahead,” with Janet Colliton, Colliton Elder Law Associates, and Phil McFadden, Home Instead Senior Care.