Seniors may have to give back $250 stimulus payment

By Tomasz Stasiuk, May 5th, 2009 | SSA News | 8 Comments

Everyone is waiting for the one-time $250 economic stimulus payment from Social Security. However, some seniors may have to give the money back!

Social Security beneficiaries received notices last month that they soon will be getting a $250 check courtesy of President Obama’s economic recovery package, but the administration did not say that some recipients may have to give part of it back.

The problem: 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.

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The one-time payments that will be sent this month to millions of Social Security retirees and beneficiaries of other federal entitlement programs are part of a little-noticed provision in the $787 billion economic stimulus law approved by Congress in February.

But recipients who are still working full or part time to supplement their income may also qualify for Mr. Obama’s Making Work Pay tax cuts, targeting lower- to middle-income workers.

In the murky world of tax policy, the answer seems to be that they can’t fully benefit from both, and the “surplus” has to be sent back to the government.

If you are a working senior and you qualify for the “Making Work Pay” tax cut, don’t spend the $250 stimulus, just yet. It looks like you won’t really get to keep it.  Ouch!

via Obama tax breaks may trip up seniors – Washington Times.

Tomasz Stasiuk is the founding attorney of the Stasiuk Firm - a law firm devoted to exclusively handling Social Security disability cases in Colorado. Contingent fees available.