For families of individuals with special needs, financial planning and ongoing accounting are extremely important.To qualify for various government benefits, specific accounts must be established and maintained with strict guidelines and parameters.
Illinois law and federal regulations set specific maximum limits on the assets, funds, and income that individuals on means-tested government benefits may possess. If these limits are exceeded, the governmental benefits can be terminated.
However, laws and regulations change from year to year, and lately from month to month. Staying on top of new legal modifications can be cumbersome and confusing. For example, we are closely following the rules surrounding the Economic Impact Payments (also referred to by some as “Stimulus Payments”) issued by the IRS as a result of the coronavirus pandemic.
Individuals who receive Supplemental Security Income (SSI) benefits may receive a $1,200 economic impact payment automatically from the US Treasury Department. This payment should be sent in the same manner as the SSI benefits. Since this payment is uncommon, many of our clients have asked how it will affect their government benefits, especially those benefits where eligibility is based upon strict financial limitations.
We’re happy to report some good news.
Economic Impact Payments Are Not Includible In Gross Income
If you have received an Economic Impact Payment from the IRS, do not worry. You do not need to report this payment as taxable income on your federal tax forms, nor pay income tax on the amount received. Also, these payments do not count as income or a resource when determining your eligibility for means-tested government benefits or assistance programs. For specific details from the IRS on this topic, you can read more at: www.irs.gov/coronavirus.
There is one caveat you should know, however. The Economic Impact Payment is not considered income, nor counted as a resource for government benefits, but only for 12 months. This means the payment amount must be spent within 12 months or saved in an SSI and/or Medicaid “friendly” way such as the use of an ABLE Account (LINK) it will be considered a resource that may impact your benefits.
At Rubin Law we limit our practice to compassionate special needs legal and future planning so we can provide the most accurate and up-to-date legal advice possible for families of children and adults with special needs. If there has been a recent change in the law which may affect our clients, you can rest assured we are aware of it, we understand it, and we will advise you how to respond based upon your specific circumstances.
If you have any questions about the recent stimulus payments, or any other special needs law issues, we offer virtual conferences, phone consultations, and other ways to resolve your concerns during these unusual times. Call us toll-free at 866-TO-RUBIN, email us at firstname.lastname@example.org or complete our simple form today.