Editor’s note: Hours after this story first published, the IRS reversed its rule on payments to Social Security recipients. The Internal Revenue Service will not make Social Security recipients file a tax return to get their $1,200 coronavirus relief checks, reversing a policy that angered members of Congress and confused millions of older Americans. This story has been updated to reflect that change.
By Shereen Siewert
Last week members of Congress approved an unprecedented $2 trillion emergency bill to aid businesses, workers and a health care system slammed by the coronavirus pandemic, but the bill has significant exclusions that are taking some Americans by surprise.
Those who won’t receive a check include most college students and many recent college graduates, even those who are now living and working on their own. The language also means many high school seniors won’t qualify, and their parents won’t receive the additional $500 for children above age 16 even if they live with you, eat your food, drive your car and sleep in your house.
Under the terms of the bill, Americans earning up to $75,000 will receive a check for $1,200, while couples earning up to $150,000 will receive $2,400. In addition, parents will receive $500 for each child younger than 17, leaving out anyone age 17 or older who can still be claimed as a dependent.
What’s more, those children will not receive the $1,200 credit either, leaving out tens of thousands of college students who lost their work study jobs when schools shut down last month and are now scrambling to pay rent and other bills.
“I honestly have no idea how I’m going to make it,” said Emma Williams, a Wausau native and UW-Milwaukee student. “My work study is gone. My waitressing job is gone. My parents are both laid off. I feel like the rug is being pulled out from under my entire family, and we just didn’t see this coming.”
Like most high school seniors, college students and adult children living at home, Williams doesn’t provide more than half of her own support and relies on her parents to pay her health insurance costs, cell phone bill and car insurance. That makes her a dependent, for tax purposes, which is significant for her parents at tax time each year.
Williams said she is relieved that her parents will each get $1,200, but without work study and tips earned working nights at a Milwaukee restaurant, she is unable to pay the rent at her shared apartment.
“I heard ‘stimulus check’ and thought, thank God, I’ll be able to pay the rent,” Williams said. “Now there’s no way that’s happening.”
Two weeks ago, she packed her bags and moved back home with her mother.
Even if Williams’ mother hadn’t claimed her as a dependent, Williams would still be ineligible for a check because of the way the bill is written.
“I feel worse for my mom, not getting that extra $500,” Williams said.
Economic experts predict that the coronavirus outbreak will have a devastating impact on the future of young adults like Williams. Not only are many young people excluded from receiving stimulus relief checks, but people ages 16 to 24 will be disproportionately impacted by layoffs because nearly half work in service-sector jobs, according to the Pew Research Center.
Initially, Americans who receive Social Security were informed they would be required to file a tax return to receive their $1,200 economic stimulus payment, an added step that caused widespread confusion and concern among elderly and disabled people who normally don’t need to file a return.
Earlier in the week the IRS responded, in a post on the organization’s website, by saying that a “simple” return will be available soon to streamline the process.
“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 said. “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.”
But late Wednesday, the IRS reversed that rule after sharp criticism from lawmakers. Social Security recipients will now receive relief checks without filing a return, according to the agency.
Some state lawmakers, including Democratic State Rep. Katrina Shankland (Stevens Point), are calling on members of Congress to provide additional relief.
“Coronavirus relief legislation should consider students, seniors, veterans, farmers, working families — everyone,” Shankland said. “While the CARES Act was a start, I am hopeful that Congress will consider more comprehensive relief to ensure that everyone benefits from the legislation and is able to weather this turbulent time with support and resources.”