Donald Lambro reports for the Washington Times that Seniors who also work and qualify for Mr. Obama's $400 Making Work Pay middle-class tax cuts may find themselves forced to give back some or all of the Social Security bonus come tax-filing time in 2010. The basic story is that Obama's making work pay tax credit – which is, in effect, a cut in the employee share of the Social Security tax – benefit only those with earned income. Retirees squealed, as you'd expect, that they hadn't gotten their share of the stimulus loot and so a $250 check was added for everyone receiving Social Security benefits. The hitch is that many people both work and receive benefits at the same time. Those folks probably expect that they'd get to keep both checks, which isn't unreasonable given that they fulfill the criteria for both. According to Lambro, that's not how it works. Congressional and IRS officials say taxpayers cannot double-dip into both programs. If you are getting extra Social Security money and benefit from a lower withholding in your paycheck, the two will have to be reconciled when you file your 2009 tax returns next year. While I'm not a huge fan of either the Making Work Pay credit or the $250 retiree checks, the administration should at least have been more forthcoming with details regarding how the program worked. According the SSA's Income of the Population Aged 55 and Over, 46% of beneficiaries aged 62-64 (1.13 million people) have earnings; 22% of beneficiaries aged 65 and older (5.4 million people) have earned income. These folks may not be too pleased come tax time.
Monday, May 4, 2009
Retirees who work must return $250 stimulus check
Subscribe to:
Post Comments (Atom)
Posts
2 comments:
But they will be $250 better off, right,not worse off?
I called both the IRS and SSA and talked to them about the $250 check. Since I work and found out that the IRS changed the withholding tables, I went down to HR and increased my withholding to balance out what they were changing. This is so silly. Then I find out the SSA is sending $250 and there would be a possibility of having to pay money back. They can keep their freaking check! Everytime the IRS changes the withholding tables, it screws everything up at the end of the year. I must have spend a whole day working out the withholding mystery on five small sources of income. What a mess!
Post a Comment