June 17th, 2020

COVID-19 Economic Impact Payments Belong to the Recipient, Not to the Nursing Home?

While most Americans have received economic impact payments (EIP) or stimulus checks, there are still questions about these funds. Recently, the IRS published a notice about recipients living in nursing homes and how to handle the administration of those EIPs for tax purposes.

As stated clearly on the Social Security Administration’s website, “the EIP belongs to the Social Security or SSI beneficiary. It is not a Social Security or SSI benefit.” If a nursing home or long-term care facility received a resident’s COVID-19 EIP, either directly or indirectly by direct deposit or check, as their representative payee, they must discuss the EIP with the beneficiary. Further guidance from SSA states the following:

If the beneficiary wants to use the EIP independently, the representative payee should provide the EIP to the beneficiary. If the beneficiary asks the representative payee for assistance in using the EIP in a specific manner or saving it, the representative payee can provide that assistance outside the role of a representative payee.

Economic impact payments are considered prepaid tax credits on your 2020 tax returns. Thus, they should not count as income or be used to determine eligibility for programs like Medicaid and other federal programs. In addition, recipients do not need to repay an EIP.

The IRS further noted:

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.

In short, the IRS has confirmed that EIP funds belong to the recipient in hopes of avoiding scams upon the elderly surrounding CARES Act benefits, like EIPs. Nursing homes and long-term care facilities should also be aware that EIPs are intended to go directly to the beneficiary, not them, without express approval of the beneficiary. For more information, please visit Social Security Administration resource page here.

Attorney Thomas A. Capehart provides guidance on wills, estate planning, real estate, and elder law matters. 

The content found in this resource is for informational reference use only and is not considered legal advice. Laws at all levels of government change frequently and the information found here may be or become outdated. It is recommended to consult your attorney for the most up-to-date information regarding current laws and legal matters.