Not everyone will get the relief payment the federal government is sending to help Americans through the economic disruption triggered by the coronavirus pandemic. Among those left out are adults with special needs and the elderly who are claimed as dependents.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act included one-time payments of up to $1,200 to millions of eligible individuals, based on their income. While the law provides an additional $500 per child to parents of minor children, adults who are claimed as dependents are not eligible for either the up to $1,200 relief payment or the $500 for minor dependents. This is true even if the individual with a disability or the senior receives Social Security or works.
Caregivers who claim their adult children with disabilities or parents as dependents get a tax credit. The IRS allows taxpayers who support a relative to claim a $500 tax credit for any non-minor dependents. However, when Congress wrote the CARES legislation, it decided that if individuals with disabilities and seniors are claimed as dependents, they are not eligible for the coronavirus relief payments.
According to USA Today, AARP is urging Congress to address the issue in the next economic recovery package. “A lot of times when people think about caregiving or dependent care, they initially think children and don’t always extend that same kind of thinking to older dependents in the household,” David Certner, legislative policy counsel for the AARP, told USA Today. “We think that’s a mistake because it’s just as important to be able to provide for the caregivers of those dependents as well.”
“We’re working to fix that issue in the next bill so that those individuals are able to get the payments they’re in fact eligible to receive,” said Rep. Richard Neal (D-Mass.), chairman of the House Ways and Means Committee.
But this may be a hard sell to Senate Republicans. The checks were intended "to provide support for Americans who are responsible for their own financial well-being during this pandemic," which by definition does not include dependents, said Michael Zona, Republican spokesman for the Senate Finance Committee.
This information is not intended to be a substitute for specific individualized tax, legal or estate planning advice as individual situations will vary. Neither Royal Alliance Associates, Inc., nor its registered representatives or employees, offer tax or legal advice. As with all matters of a tax or legal nature, you should consult with your tax or legal counsel for advice.
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Content provided by the Academy of Special Needs Planners, Copyright 2016