Q1. What is the economic recovery payment?
A. The economic recovery payment is a one-time payment of $250 that will be made in 2009 to retirees, disabled individuals and Supplemental Security Income (SSI) recipients receiving benefits from the Social Security Administration, disabled veterans receiving benefits from the Department of Veterans Affairs and those receiving benefits from the Railroad Retirement Board.
Q2. How will this payment be made?
A. Unlike payments made in 2008 under the economic stimulus payment program, the economic recovery payment will not require a special tax return and will not come from the IRS. Individuals who may qualify for this year's economic recovery payment should contact their respective agency for more information. The Social Security Administration's Web site has a special section on the economic recovery payment.
Q3. The Making Work Pay credit is to be reduced for qualifying individuals receiving payments under the economic recovery payment provision for recipients of certain benefits from the Social Security Administration, Deptartment of Veterans Affairs and the Railroad Retirement Board. If an employer knows that an employee is receiving one of these payments, should withholding be calculated using the old tables?
A: The old tables have been replaced by the applicable new tables for all purposes. See Publication 15-T, New Wage Withholding and Advance Earned Income Credit Payment Tables, for more information. Individuals receiving payments under the economic recovery payment provision may want to evaluate their expected tax liability for the year and consider whether they need to make estimated tax payments or adjust their withholding.
Q4. The Making Work Pay credit is to be reduced for qualifying individuals receiving payments under the "Special Credit for Certain Government Retirees." If an employer knows that an employee is receiving this credit, should withholding be calculated using the old tables?
A. The "Special Credit for Certain Government Retirees," available on the 2009 tax return, reduces the Making Work Pay credit by the amount of the provision’s credit. Therefore, withholding under the new tables should not adversely impact individuals eligible for this credit.
Q5. Will the one-time economic recovery payment count as gross income for federal income tax purposes?
A. No, it will not. However, if you worked during the year, any Making Work Pay tax credit for which you might be eligible will be reduced by the amount of the Economic Recovery Payment you received in 2009.See the IRS 2009 Schedule M Instructions and the IRS 2009 Schedule M tax form on the IRS.gov Web site.
Q6. Will I receive a one-time economic recovery payment if I have a delinquent federal debt?
A. The law requires the Treasury Department to offset the one-time payments to collect delinquent child support and debts owed to state and federal agencies. Offset means that part or all of a payment can be used to pay past-due federal or state income taxes or non-tax federal debt such as student loans and child support. However, the one-time payment will not be used to collect Social Security or SSI benefit overpayments.
Q7. Will the one-time economic recovery payment count as income for SSI?
A. No, it will not.
Q8. How can I check to see if I received an economic recovery payment in 2009?
A. To find out if you received a 2009 Economic Recovery Payment, please call our automated telephone service at 1-866-234-2942 and select Option 1. Or use the Did I Receive a 2009 Economic Recovery Payment? online tool to verify whether you received the payment. Or, you can contact your respective agency for confirmation before completing and filing your 2009 tax return:
- Social Security Administration: Toll Free number 800-772-1213. General ERP inquiries can be answered by the SSA Web site: www.ssa.gov/recovery.
- Department of Veterans Affairs (VA): Toll free number is 800-827-1000. General ERP inquiries can be answered by going to the VA Web site: www.va.gov/recovery.
- Railroad Retirement Board: Go to the RRB Web site at www.rrb.gov/recovery for more details.
Q9. How do I calculate the impact of the economic recovery payment on my making work pay tax credit?
A. If you worked during the year, any Making Work Pay Tax Credit for which you might be eligible will be reduced by the amount of the Economic Recovery Payment you received in 2009. See the IRS 2009 Schedule M Instructions and the IRS 2009 Schedule M tax form.