Tag Archives: Tax Rebate

Stimulus Payments and Workers’ Comp

In our prior post, CARES ACT STIMULUS PAYMENTS, Brian Wright explained that there might be a conflict between stimulus payments and workers’ comp claims. The law was not clear if recipients of workers’ comp benefits, which are not taxable income, would be entitled to stimulus payments.

Brian sought clarification of the law from our State’s delegation to the other Washington. They were unsure. He reviewed the IRS documentation. It was unclear. Emergency rules would need to be written and implemented by the IRS to provide clarification.

The IRS has now issued guidance that indicates that workers’ compensation recipients, both of time loss compensation and disability pensions, WILL receive the stimulus funds, providing they meet the other eligibility criteria.

Eligibility Requirements

You are eligible to receive a stimulus payment if you are a U.S. citizen or resident alien who:

  • Has a valid Social Security number,
  • Could not be claimed as a dependent of another taxpayer, and
  • Had adjusted gross income under certain limits. NOTE: workers’ compensation benefit payments are NOT included in the adjusted gross income figure, as they are not taxable benefits.
Non-Filers: Enter Payment Info – The Portal

The IRS provides an online portal for reporting 2019 income figures for those who were not required to file a return. This would include people whose only income for 2019 was workers’ compensation benefits.

You will need to create an account to log into the portal. The fillable form is provided and managed by Intuit – makers of TurboTax and QuickBooks and Mint – and is free to use.

IRS Portal Link:  
Information You will Need to Provide

Before starting, review the instructions from the IRS and gather the data that will be needed to fill out the form completely:

  • Full name, current mailing address and an email address
  • Date of birth and valid Social Security number
  • Bank account number, type and routing number, if you have one
  • Identity Protection Personal Identification Number (IP PIN) you received from the IRS earlier this year, if you have one
  • Driver’s license or state-issued ID, if you have one
  • For each qualifying child: name, Social Security number or Adoption Taxpayer Identification Number and their relationship to you or your spouse
Stimulus Payments and Workers’ Comp – How it Works

The instructions are still vague when it comes to stimulus payments and workers’ compensation recipients. If one reads between the lines, with a little prior knowledge, then the portal will work. Here we offer our tips for completing the Non-Filers: Enter Payment Info forms correctly.

You May NOT be Required to Provide Information Through the Portal

Most eligible U.S. taxpayers will automatically receive their Economic Impact Payments, including:

  • Individuals who filed a federal income tax for 2018 or 2019
  • Individuals who receive Social Security retirement, disability (SSDI), or survivor benefits. NOTE: if you receive combined benefits under workers’ compensation and Social Security, you do NOT need to use the portal.
  • Individuals who receive Railroad Retirement benefits
Who SHOULD Provide Information Through the Portal

Eligible U.S. citizens or permanent residents who:

  • Had gross income that did not exceed $12,200 ($24,400 for married couples) for 2019. NOTE: this refers to TAXABLE income. Your workers’ compensation benefits may exceed this total. You should continue with providing your information.
  • Were not otherwise required to file a federal income tax return for 2019, and didn’t plan to. NOTE: this means you, if workers’ compensation payments were your primary source of income.
Have Questions? We Can Help

We are here as a resource for injured and disabled workers. For current clients, please contact your attorney/paralegal team for assistance with the portal. For all others, feel free to contact us by phone or email with your questions. We will do our best to provide answers.

CARES Act Stimulus Payments

Congress passed a law, HR 748, known as the Coronavirus Aid, Relief, and Economic Security Act or the CARES Act, on March 27, 2020. The CARES Act, among other things, grants an automatic tax rebate to most people. Section 2201 of HR 748 details payments to individuals.

What Are the Stimulus Payments?

The CARES Act refers to these payments as tax rebates. The Treasury Department calls them Economic Impact Payments, as does the IRS. I call them stimulus payments, as do many media sources.

They are essentially an automatic tax rebate which is paid irrespective of whether a person actually paid taxes. There are three stated disqualified classes: nonresident aliens, dependents, and trusts/estates. This leaves a broad range of people that potentially will receive the payments in the near future.

Who Will Get a Payment? Who May Not?

Social Security recipients will automatically receive the stimulus payments. For others, the IRS advises people who receive disability benefits but do not ordinarily file taxes to file a special return.

However, for those individuals whose only source of income in both 2018 and 2019 were time loss or workers’ compensation pension benefits – which are non-taxable benefits – the CARES Act does not clearly state whether those individuals are eligible to receive the tax rebate payment.

Should I File a Tax Return?

We believe there is no downside or risk for individuals who receive only workers’ compensation benefits to file a special tax return. If you have questions about how to characterize or claim your benefits on a special tax return, we suggest you contact a tax professional.

How Much Can I Expect to Receive?

The amount is subject to adjustment upward or downward depending on filing status, income, and number of dependents. For most people, the calculation of, and eligibility for, these payments will be based on their 2019 or 2018 tax returns. 

Where Can I Get More Information?

The IRS has provided some guidance on it’s coronavirus website, with the clear instruction to not call the IRS but to check back frequently for updates. I will be paying attention to IRS rulemaking in the next several weeks. You should also periodically check in on the IRS website for further information.

I have reached out to house members and senators for Washington State for clarification. I am closely monitoring the rule making process. We will do our best to keep you informed on any changes. 

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