“The IRS issued this reminder following concerns that people and businesses may be taking advantage of vulnerable populations who received the Economic Impact Payments,” the agency said. “These payments do not count as a resource for purposes of determining eligibility for Medicaid and other federal programs for a period of 12 months from receipt. They also do not count as income in determining eligibility for these programs.”
The Federal Trade Commission (FTC) also put out an advisory.
“We’ve been hearing that some facilities are trying to take the stimulus payments intended for their residents on Medicaid,” posted Lois Greisman, the elder justice coordinator for the FTC. “Then they’re requiring those people to sign over those funds to the facility. Why? Well, they’re claiming that, because the person is on Medicaid, the facility gets to keep the stimulus payment.”
The Coronavirus Aid, Relief, and Economic Security (Cares) Act provides a $1,200 refundable tax credit for individuals and $2,400 for joint taxpayers.
What many have not realized is that the stimulus payment is an advanced tax credit, and as such, it is not considered income, which is why it’s not taxed. As a result, for the purpose of qualifying for federal benefits, such as Medicaid, the stimulus payment is not counted as a resource, Greisman said. This would also apply to other federal benefit programs, such as Supplemental Security Income (SSI), the Supplemental Nutrition Assistance Program (formerly food stamps) and Temporary Assistance for Needy Families (TANF).
Receiving a stimulus payment does not affect the resident’s monthly payment, which is often referred to as a “patient pay amount” or “share of cost,” according to the National Center on Law and Elder Rights. Residents are free to spend the money however they want.
If a nursing home or assisted-living facility took your payment, contact your state attorney general, Greisman said.
The Centers for Medicare & Medicaid Services issued a warning that commandeering stimulus payments from residents could subject facilities to federal enforcement actions, including the possibility that they cannot participate in the Medicare and Medicaid programs.
“The law is clear, and we want you to know that,” said IRS spokesman Eric Smith. “If you’re in a nursing home or other care facility, your economic impact payment belongs to you, not the home.”
Please join me on Thursday, June 25, at noon (Eastern time) for a live discussion.
Reader Question of the Week
If you have a personal finance or retirement question, send it to email@example.com. In the subject line, put “Question of the Week.”
Q: I retired in 2018. My earnings for 2018 put me above the threshold for a stimulus payment. I delayed filing my 2019 taxes until June. I believe my 2018 tax return was used to determine eligibility for the stimulus payment. I recently filed my 2019 tax return, and my retirement income qualifies me for the stimulus payment. Will my 2019 tax return replace the determination made using my 2018 return? Should I expect the IRS to issue me a stimulus payment? I’ve checked the IRS “Get My Payment” website multiple times and always receive the “Payment Status Not Available” response.
A: It may be too soon for the “Get My Payment” tool to have your return information to determine your eligibility for a stimulus payment. But the IRS says it continues to process stimulus payments based on federal returns for 2019 that have been filed electronically. That’s a key. You have to file electronically. The agency is still not processing paper returns.
You can try to contact the IRS, but services such as live telephone assistance or responding to correspondence are extremely limited or suspended until further notice, the agency said.
Stimulus payments will continue to be issued until the end of the year. But if you don’t receive your payment by year’s end, you can claim it by filing a tax return for 2020 next year.
Didn’t get your stimulus payment? Here are some tips on what you can do.
Retirement Rants and Raves
Your thoughts: I’m also interested in your experiences or concerns about retirement or aging. You can rant or rave. Send your comments to firstname.lastname@example.org. Please include your name, city and state. In the subject line, put “Retirement Rants and Raves.”