Case Study #2: Dependent on Social Security - Spidell

Case Study #2: Dependent on Social Security


Omar is single and claims his 80-year-old mother as a dependent on his 2019 return. His AGI is $87,000. His mother lives in a nursing home, and in 2019 she had $11,000 of Social Security benefit income.

Omar will receive an economic impact payment of $600. His payment was reduced due to his income in excess of the threshold amount of $75,000 for single (the payment is decreased $5 for every $100 over the threshold).

Further, he doesn’t get a payment for claiming his mother as a dependent because she’s older than age 17. Taxpayers without a filing requirement receive their economic impact payment based on their current Form 1099-SSA or Form 1099-RRB. But Omar’s mother is not eligible to receive an economic impact payment because she is Omar’s dependent.

Unanswered question: However, we don’t know if the IRS will cross check the  Social Security Administration’s Social Security numbers with returns on file to see if individuals were claimed as a dependent before sending the checks to SSA and Railroad Retirement Act (RRA) recipients. If the IRS sends a check to Omar’s mother, we don’t know whether they will ask for it to be returned.

Subscribers to Spidell’s Federal Taxletter or Spidell’s Online Research Package can read the full article here >> https://bit.ly/ORP-Economic-Impact