Personal Finance

Why some Americans may have to file tax returns before they see a coronavirus stimulus check

Key Points
  • A $2 trillion stimulus bill passed by Congress last week included checks of $1,200 to $2,400 to be sent to Americans.
  • In the legislation, the government said it would deploy those payments using information from tax returns, or 1099 forms for others who don't typically file those documents, such as some Social Security beneficiaries.
  • New guidance from the IRS said that those who don't file returns will have to do so in order to get their payments. Now, some lawmakers and advocacy groups are pushing back.
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There may be a catch for individuals who typically don't file a tax return but are expecting to receive a stimulus check.

They may have to send a return to the government in order to get paid.

New guidance was released on Monday by the IRS, which said there would be "no action required for most people."

For some, though, that's not true.

"People who typically do not file a tax return will need to file a simple tax return to receive an economic impact payment," the IRS stated. "Low-income taxpayers, senior citizens, Social Security recipients, some veterans and individuals with disabilities who are otherwise not required to file a tax return will not owe tax."

That new information drew strong pushback from certain members of Congress and advocacy organizations, who argue that those individuals should not have to file just to get their money.

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On Wednesday, Sens. Maggie Hassan, D-N.H., and Sherrod Brown, D-Ohio, led a group of 41 senators to send a letter to Treasury Secretary Steve Mnuchin and Social Security Commissioner Andrew Saul complaining that the move would add an unnecessary burden to disadvantaged individuals.

"We strongly urge you to ensure that economic stimulus payments are automatically sent to vulnerable seniors and individuals who experience disabilities, without these individuals needing to file a tax return," the senators wrote.

Rep. Richard Neal, D-Mass., chairman of the House Ways and Means Committee, also criticized the move on Tuesday and said filing new returns should not be required.

"Crucial filing resources, like Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE), are not available to provide assistance due to the COVID-19 crisis," Neal said.

A couple of Republican lawmakers – Sen. Josh Hawley, R-Mo., and Rep. Elise Stefanik, R-N.Y.– also called for a reversal of the requirement on Twitter.


Those who have been following the $2 trillion stimulus bill that was passed last week in response to the coronavirus' impact on the economy called the IRS guidance perplexing.

The legislation specifically calls for the use of Social Security 1099 forms for those who receive benefits, but do not file tax returns, said Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities, a progressive think tank.

And for those who do not receive 1099 forms, such as individuals on Supplemental Security Income, or SSI, the government also has information on how to qualify those people. Plus, state programs like Medicaid or SNAP, could also be accessed.

By keeping automatic distributions in place, fewer people would fall through the cracks, Marr said, as an estimated 3.5 million did during the financial crisis of 2008-2009, when the government last issued these kinds of payments.

"If you read the law, it looks like they learned that lesson and tried to fix it this time," Marr said. "That's why it's so perplexing, because they added this language on Social Security 1099 forms and now they seem to be ignoring it."

Other advocacy groups were also quick to criticize the IRS.

"It is ridiculous," said Nancy Altman, president of Social Security Works, who said that many seniors may not have access to computers or the internet and cannot go to the library or have a family member come over to help.

"This would be bad enough in normal times," Altman said. "But in the middle of a pandemic, seniors and those with pre-existing conditions are the most vulnerable."

Many individuals are desperate for answers, said Marr, citing an email he received from an 83-year-old who asked, "What should I do?"

Stimulus bill's $1200 will not carry people very far: Former Clinton Labor Secretary
Stimulus bill's $1200 will not carry people very far: Former Clinton Labor Secretary

The Social Security Administration emphasized this week that it is the Treasury Department, in fact, that is in charge of those promised relief checks.

"Please do not call Social Security about these payments, as the agency does not have information to share," the Social Security Administration said.

Meanwhile, individuals are awaiting further guidance on how to file tax returns, particularly if they have no income.

Those who are opposed to the new tax-filing requirement should make their voices heard, said Richard Fiesta, executive director at the Alliance for Retired Americans.

"Contact your member of Congress and express your concern and outrage about this," Fiesta said. "Try and call the White House or go on their website, if you have the means to."