IRS Issues Alert on Stimulus Payments for Institutional Residents

Topics: Federal News,

The Internal Revenue Service (IRS) has issued an alert to nursing home and other care facilities that Economic Impact Payments (EIPs) generally belong to the recipients, not the organizations providing the care. The Economic Impact Payment is considered an advance refund for 2020 taxes, so it is considered a tax refund for benefits purposes. The IRS also noted the Economic Impact Payments do not count as resources that have to be turned over by benefit recipients, such as residents long-term care facilities whose care is provided for by Medicaid.

IRS clarified that the payments are intended for the recipients, even if a nursing home or other facility or provider receives the person's payment, either directly or indirectly by direct deposit or check. The payments do not count as a resource for purposes of determining eligibility for Medicaid and other federal programs for a period of 12 months from receipt. They also do not count as income in determining eligibility for these programs.

The Social Security Administration (SSA) has issued FAQs on this issue, including how representative payees should handle administering the payments for the recipient. SSA has noted that under the Social Security Act, a representative payee is only responsible for managing Social Security or Supplemental Security Income (SSI) benefits, which does not include EIPs.

FMI: The alert can be found at https://www.irs.gov/newsroom/irs-alert-economic-impact-payments-belong-to-recipient-not-nursing-homes-or-care-facilities?eType=EmailBlastContent&eId=7657c666-978c-4469-bb10-123c3dc863eb.