The IRS reminded caretakers and nursing homes that stimulus payments (also called Economic Impact Payments belong to those they are sent to, not whatever organization they are in the care of.
This was published by the IRS to respond to feedback that organizations, people or nursing homes could be in some cases not looking out for the best interests of the people in their care who were recipients of these payments. These payments always belong to those who the checks are issued to, regardless of whether they are received initially by a caretaker by direct deposit or check.
For determining eligibility for Medicaid and other federal programs, these payments do not count as income. They are also deferred as a resource for 12 months.
The SS Administration has a page for FAQs regarding this. The SS Act determines that a payee who represents only needs to manage SS or Supplemental Security Income benefits. The EIP (Economic Impact Payment or Stimulus Check) is different in that rights and ownership always lie with the beneficiary. This recipient needs to be given the opportunity to discuss how they want this payment used, and if they would like to use it in a specific way or personally, they need to be provided with the payment.
These payments do not need to be turned over to caretakers, as happens in institutions like nursing homes where Medicaid covers the care. It is a 2020 advance refund, so for benefits purposes, it is considered a tax refund. Tax refunds always belong to the recipient personally.
The Form 1040 instructions apply to Economic Impact Payments: “Any refund you receive can’t be counted as income when determining if you or anyone else is eligible for benefits or assistance, or how much you or anyone else can receive, under any federal program or under any state or local program financed in whole or in part with federal funds. These programs include Temporary Assistance for Needy Families (TANF), Medicaid, Supplemental Security Income (SSI), and Supplemental Nutrition Assistance Program (formerly food stamps). In addition, when determining eligibility, the refund can’t be counted as a resource for at least 12 months after you receive it.”
More information regarding EIP’s and recipients of Medicare and SS can be found on the SSA’s website.
Author:
Laura R Fleig, Accountant in Portland, TX
June 17, 2020
Sources:
www.irs.gov “IRS alert: Economic Impact Payments belong to recipient, not nursing homes or care facilities”https://www.irs.gov/newsroom/irs-alert-economic-impact-payments-belong-to-recipient-not-nursing-homes-or-care-facilities June 16, 2020
