Lawmakers and veterans advocates have been concerned that a significant number of disabled veterans and their surviving family members won’t receive the stimulus payments Trump approved in March as part of a $2 trillion stimulus package to support Americans during the coronavirus pandemic.
The legislation provides direct payments of $1,200 to many Americans. The payments will decrease for Americans earning more than $75,000, and payments end for individuals making more than $99,000. Married couples that collectively earn up to $150,000 will receive payments of $2,400. Families will receive an additional $500 per dependent.
In a reversal of their prior guidelines, on April 17, the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) announced that they will work with the Department of Veterans Affairs (VA) to ensure disabled veterans will automatically receive their stimulus payments. Originally, disabled, non-filing veterans were required to file paperwork with the IRS in order to receive these payments.
Unique Hurdles Facing Veterans
The concern lies with disabled and low-income veterans and surviving family members who receive monthly compensation from the VA, but who do not normally file tax returns or receive Social Security benefits. Recipients of VA disability benefits do not have to pay income tax on said benefits, and such payments are not claimed as gross income on tax returns.
This is a unique problem facing veterans and families receiving these VA benefits because the IRS is using the addresses or direct deposit information on file from Americans’ 2018 or 2019 tax returns to send the stimulus checks. For some veterans and their families, the VA benefits are their only income so the IRS lacks the information necessary to send these beneficiaries the stimulus check.
Representatives Ron Kind (D-WI) and Mike Kelly (R-PA) said the IRS should treat veterans like other Americans who are eligible to receive their $1,200 stimulus checks without needing to file extra paperwork. Their letter, sent to IRS Commissioner Charles Rettig and Treasury Secretary Steven Mnuchin, urged coordination with the VA “to ensure that VA beneficiaries who do not file annual taxes are not required to file a supplementary form in order to receive” the stimulus.
“To put this hurdle in front of them will be wrong,” House Veterans Affairs Chairman Mark Takano said of the filing requirement. “They are people who need this stimulus payment the most.”
Mid-April, the IRS launched an online tool that allows non-filers to submit basic personal information in order to receive the stimulus payment. The site specifically encourages disabled veterans and their survivors to fill out the form.
However, lawmakers and advocates continued writing to the Treasury, IRS, and VA to pressure them to agree to the condition that veterans who receive benefits from the VA and low-income disabled individuals who receive Supplemental Security Income (SSI) don’t need to file tax returns in order to receive the stimulus check as well.
In a letter signed by 12 veterans organizations, advocates explain that the current approach the Treasury and IRS are using to distribute the stimulus checks “will leave out a significant number of people who have little or no income and are not required to file a federal tax return, including many seriously disabled veterans and their survivors.” The organizations then stressed that “it is critically important that [Treasury Secretary Mnuchin and VA Secretary Wilkie] and [their] departments work together to prevent potentially millions of disabled veterans and their survivors from losing this financial support.”
Last week, the IRS announced that disabled veterans -- who typically are not required to file a tax return -- will automatically receive their stimulus payments.
Many non-filing beneficiaries have already begun using the IRS's online tool in order to receive their stimulus payment. The IRS assured that there will be no disruption to the payments already being processed through this online tool.
However, for veterans who are unable to access the online tool or who have chosen not to use the online tool, their stimulus payments will now be processed automatically.
“Economic Impact Payments will be issued automatically to our Veterans and their families who did not file tax returns for 2018 or 2019,” said Secretary Mnuchin.
Veterans with Dependents
Alarmingly, on April 20, the IRS announced that Social Security and Railroad Retirement Benefit recipients with dependents had until April 22 to use the non-filer online tool in order to receive the additional $500 per dependent.
If you missed this filing deadline, Secretary Mnuchin stated that the $500 per dependent "will be paid to [you] with a return filing for tax year 2020."