The Internal Revenue Service provides benefits like the Earned Income Tax Credit and the Child Tax Credit, which put extra income in the hands of low-income households. But, the IRS can be scary for people who owe taxes. Low-income tax payers have many options for resolving debts owed to the IRS and may not have to pay back all of the money owed.
Cuyahoga County’s Consumer Debt Defense Program
Were you sued in
Cuyahoga County Common Pleas Court
to collect on a debt?
Free legal help is available!
Thanks to funding from the Ohio Supreme Court’s civil justice grants program, Legal Aid and Cuyahoga County Common Pleas Court are working together on a Consumer Debt Defense Program.
Contact the Court Resource Center at (216) 443-8204 or email courtinfo@cuyahogacounty.us with questions or if you need help.
CLICK HERE for a printable flyer to share.
Federal Income Tax Help for Low-Income Taxpayers
Federal income tax problem? Legal Aid may be able to help you.
Legal Aid’s Low Income Taxpayer Clinic (LITC) assists low-income taxpayers in resolving their disputes with the IRS about federal income tax matters.
We provide free legal services to people whose income is too small to hire a private attorney. If you have a tax problem with the IRS, please contact us to discuss it. Depending upon your circumstance, we may assist you with education, negotiation, and litigation.
Click here for the full brochure: Low Income Taxpayer Clinic (LITC)
Are You a Low-Income Entrepreneur and Need Federal Tax Help?
If you are a self-employed individual, the only shareholder in an S Corporation or a single member LLC, the Low Income Taxpayer Clinic (LITC) at Legal Aid may be able to provide you with federal tax assistance and to refer you to others for free assistance with tax preparation and business development. Legal Aid provides free legal services and direction to people, not business entities, whose income is too small to hire a private attorney.
Self-employed individuals have several tax obligations. The self-employed are required to file an annual return and pay estimated tax on a quarterly basis. A penalty may be assessed by the Internal Revenue Service (IRS) if taxes are not paid throughout the year. The IRS has an Electronic Federal Tax Payment System (EFTPS) that makes it easier for self-employed taxpayers to make quarterly payments by allowing a taxpayer to schedule automatic estimated payments up to one year in advance. The IRS also provides a Self-Employed Individuals Tax Center that can be accessed for help at https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center.
Self-employed individuals also must pay a self-employment tax, in addition to income tax if net earnings are $400 or more. Self-employment tax primarily is a Social Security and Medicare tax for individuals who work for themselves. The tax rate is 12.4% for Social Security and 2.9% for Medicare taxes. It always is a good idea to review the IRS instructions for Schedule SE (self-employment) before preparing and submitting IRS Form 1040. The Social Security Administration uses the information from Schedule SE to figure the self-employed individual’s benefits under the social security program.
Legal Aid’s LITC can assist self-employed individuals with IRS tax problems. Legal Aid can negotiate with the IRS to obtain a reasonable payment plan and/or offer in compromise that may reduce your tax burden; if your current expenses exceed your income, you may qualify for currently not collectible status. When your case must go to court, we can represent you.
After receiving the appropriate guidance, the low-income entrepreneur can establish and maintain his/her own job when there are few labor market options, create wealth and economic security, and achieve upward economic mobility demonstrating success among the 3.6 million existing small businesses.
Legal Aid’s LITC does not prepare and file tax returns. A list of free tax preparers is posted on our website at www.lasclev.org/taxpreplocations. And, learn more about Legal Aid’s tax law practice: www.lasclev.org/get-help/special-programs/low-incometaxpayer-clinic
Tax Help for H2A Workers
Farmers may apply with the U.S. government to hire workers from other countries on temporary work visas called H2A visas. Not all work visas are H2A visas. If you are not sure what kind of visa you have, check your passport or other immigration documents.
H2A workers with questions about taxes or getting an ITIN for a dependent should call The Legal Aid Society of Cleveland. Legal Aid has a Low Income Taxpayer Clinic (LITC) that may be able to help. Please call Legal Aid at 1.888.817.3777.
More information is available in this bilingual brochure published by Legal Aid: Tax Help for H2A Workers / Ayuda con los Impuestos para Trabajadores/as H2A
Filing Taxes Can Help Immigrants
Immigrants should file taxes for several reasons.
More information is available in this brochure published by Legal Aid: Filing Taxes Can Help Immigrants
This brochure is also available in Spanish at: Presentar Declaración de Impuestos Puede Ayudar a los/as Inmigrantes
Consult with a qualified tax preparer or a tax attorney if you have questions about filing tax returns. You may be able to find free tax preparation help by calling 211.
Cancelled Debt Flyer
Lost your home to foreclosure? Resolved a different debt problem? This brief brochure explains that you may not have to pay income tax on cancelled debts such as foreclosure, bankruptcy or insolvency. It also explains the steps you need to take to reduce your taxes.
More information is available in the brochure published by Legal Aid: Cancelled Debt Brochure.
This information is also available in Spanish at: Cancelada.
The IRS May Owe You Money through the Earned Income Tax Credit
If you are low-income, you may be eligible for the Earned Income Tax Credit (EITC). The EITC is a special credit to assist some working people. It can mean a refund for you or a reduction in the amount of income tax you pay.
More information is available in this brochure published by Legal Aid: The IRS may owe you money through the EITC.
This brochure is also available in Spanish at: El IRS puede Deberle Dinero a Través del Crédito por Ingreso Del Trabajo.
Save Money! File Your Taxes for Free!
You can have your taxes prepared for free and get your refund within 10 days.
Find out about free tax preparation in your area:
- Call First Call for Help (dial 211 from your phone); or
- Call the IRS at 1-800-829-1040, or go to www.irs.gov to find information about Volunteer Income Tax Assistance (VITA) programs.
Most people who file their tax return electronically with a free preparer will get their refund direct deposited into their bank account within 10 days – and it is free! Even if you cannot open a checking account, you may be able to have your refund deposited into a savings account.
To learn more click on this link for the Legal Aid brochure: Save Money… File Taxes for Free!
This brochure is also available in Spanish: Ahorre Dinero… ¡Declarar Impuestos Gratuito!
Do I qualify for property tax payment assistance during the COVID-19 pandemic?
I am having a difficult time making my property tax payments, is there help available for me during the COVID-19 crisis?
There may be payment plan options available for your property taxes. You will have to contact your local treasurer office to learn about options and whether you are eligible. Here is the contact information for those offices:
ASHTABULA
- Potential for payment plan flexibility due to COVID-19. http://www.co.ashtabula.oh.us/311/Treasurer
- Contact 440.576.1421 to schedule a Delinquent Taxes/Payment Plan appointment
- Second half property tax payments were due on July 15, 2020 (July 31, 2020 for manufactured homes).
CUYAHOGA
- Potential for payment plan flexibility due to COVID-19. https://treasurer.cuyahogacounty.us/en-US/real-estate-taxes.aspx
- Contact 216.443.7420 to find out if you’re eligible for a Delinquent Payment Plan
- Second half property tax payments were due on August 13, 2020 (no due date set for manufactured homes)
GEAUGA
- Potential for payment plan flexibility due to COVID-19. https://www.geaugatax.com/#/
- Contact the office at 440.279.2000 to obtain information on a Remission of penalty (to address the delinquent tax penalty) and/or a Delinquent Tax Plan (to address the past due taxes)
- Second half property tax payment were due July 22, 2020 (July 31, 2020 for manufactured homes)
LAKE
- Potential for payment plan flexibility due to COVID-19. https://www.lakecountyohio.gov/treasurer/
- Contact the office at 440.350.2516 to obtain information on a delinquent payment plan. A delinquent payment plan can be interest and penalty free.
- Second half property tax payments were due July 15, 2020 (July 31, 2020 for manufactured homes).
LORAIN
- Potential for payment plan flexibility due to COVID-19. https://www.loraincounty.com/auditor/
- Property owners experiencing difficulties due to COVID-19 should call 440.329.5787.
- Second half property tax payments were due July 10, 2020 (July 31, 2020 for manufactured homes).
What is an Offer in Compromise?
An offer in compromise is a tool that many taxpayers can use to settle their federal tax debts. If a person owes money to the Internal Revenue Service (IRS) but cannot afford to pay the full debt, he or she may be able to offer the IRS a smaller, more affordable amount as settlement. This is known as an offer in compromise (OIC). The offer can include a lump sum payment or a series of payments over a period of months. Unlike a traditional IRS payment plan, if the IRS accepts the OIC and the taxpayer pays as agreed, the IRS will forgive the rest of the taxpayer’s debt.
Not everyone can use the OIC program to pay off their debt. Eligible taxpayers must have filed all their tax returns and cannot have an open bankruptcy case. They must also make an initial payment and pay an application fee. (Applicants who qualify as low-income do not have to pay a fee or make an initial payment.) Taxpayers can use a Pre-Qualifier tool on the IRS website to check if they are eligible for the OIC program. The IRS provides all the forms and instructions needed for making an OIC on its website; find “Form 656-B, Booklet” at www.irs.gov/payments/offer-in-compromise.
An OIC can make a huge difference in a person’s life. Attorney Dennis Dobos, who runs the Legal Aid Society of Cleveland’s Low Income Taxpayer Clinic, says that OICs give much-needed relief to his clients.
“The program has the potential to engage so many taxpayers,” Dobos says. “It allows for a fresh start, both financially and emotionally.” Without IRS debt weighing them down, people are free to more easily pursue other life goals. Debt relief can also help improve a person’s health and contribute to their general stability.
Visit the IRS website noted above for more information. For help resolving a dispute with the IRS, call Cleveland Legal Aid’s Low-Income Taxpayer Clinic at: (1-888) 817-3777.
This article was written by Melody Goodin and appeared in The Alert: Volume 35, Issue 2.
What changes are in store with the new tax laws?
Congress recently approved a new tax law that cuts rates for corporations, provides new breaks for private businesses and reorganizes the individual tax code. The official name of the law is: An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (the Act).
The new tax law also removes the penalty for people who do not maintain health insurance coverage beginning January 2019. This means Americans will no longer be required to have health insurance starting in 2019. Many of the provisions in the bill for individuals end after 2025, but the heath care provision continues indefinitely.
The Act retains seven tax brackets, but lowers the rates and increases the thresholds for taxable years 2018 through 2025 as follows:
The new law changes several individual income tax deductions for tax years 2018 through 2025.
- The standard deduction is doubled to $24,000 for married couples ($12,000 for individuals) and the personal exemption is eliminated.
- The overall limitation on itemized deductions is eliminated.
- Taxpayers can only deduct up to $10,000 in total for property, income and sales tax.
- The child tax credit has increased to $2,000 per child, refundable up to $1,400.
- The mortgage interest deduction has been limited to $750,000 (existing mortgages are grandfathered up to the current $1,000,000 limit).
- Interest on home equity loans or home equity lines of credit (new or existing) is no longer deductible.
- For taxpayers who sign divorce agreements after December 31, 2018, alimony will no longer be deductible by the payor or taxable to the recipient.
- The medical expense deduction has been retained.
- The deduction for charitable gifts is retained and expanded to allow taxpayers to deduct up to 60% of their adjusted gross income for gifts of cash to public charities.
Remember to consult with your tax professional or one of the Volunteer Income Tax Assistances (VITA) sites in your community for help with the tax law changes affecting your 2018 federal tax return. For help resolving a dispute with the IRS, contact Legal Aid’s Low Income Tax Payer Clinic by calling 1.888.817.3777. Please note Legal Aid does not prepare tax returns.
This article was written by Dennis Dobos and appeared in The Alert: Volume 34, Issue 1. Click here to read a full PDF of this issue!
What can I do about a tax lien on my property?
When a homeowner does not pay a tax debt, the Internal Revenue Service (IRS) may impose a tax lien on the taxpayer’s property. The tax lien can have a negative impact on the individual taxpayer and the community. A tax lien gives the federal government a right to the property or money from the sale of the property before anyone else. Additionally, the IRS can seize and sell this property, making it difficult for property owners to manage their property.
The problem for the taxpayer is that a lien prevents owners from selling their property and makes it difficult for them to refinance their mortgages. As a result, the owner may have to pay high interest rates, may not be able to sell a home, and the likelihood of foreclosure increases. For the community, foreclosures decrease the value of nearby homes, discourage spending in the surrounding area, and contribute to other problems associated with vacant and abandoned property.
People struggling with tax debts and who may already have tax liens on their property, have options to address the situation. First, a taxpayer can complete the IRS’s application for a Certificate of Subordination of Federal Tax Lien. This makes the federal government’s interest in the property come after other creditors, such as the bank that holds the mortgage. The successful completion of this application could make refinancing a mortgage possible for a property owner. Refinancing can reduce the owner’s monthly mortgage payments.
Second, a taxpayer can request that the IRS discharge a tax lien, which can allow the sale of property. Though a discharge does not eliminate the lien altogether, it does remove the lien from the specific property being sold and places a lien on other property the taxpayer may own. Property free from liens is much easier to sell.
Finally, a taxpayer that cannot afford to pay tax debt may qualify for an “Offer in Compromise” (OIC). An OIC is an attempt to settle tax debt with the IRS for less than the amount that is actually owed. If the IRS accepts the settlement offer, the taxpayer’s debt — along with liens on property — will be eliminated.
If you have a problem with the IRS, call 1-888-817-3777 to find out if you are eligible for help from Legal Aid’s Low Income Tax Payer Clinic.
By Frank George
What are my rights as a taxpayer?
Dealing with the IRS can be a complicated and involved process. Know your rights as a taxpayer to make the process a little easier. The IRS has adopted a “Taxpayer Bill of Rights,” (see http://www.irs.gov/Taxpayer-Bill-of-Rights). As a taxpayer, you have:
1. The Right to Be Informed. You have the right to know how to follow the tax laws. You are entitled to clear explanations of the law. Anytime you receive a notice from the IRS, the agency must explain its reason for contacting you. If you have questions, call the number located at the top right corner of most notices.
2. The Right to Quality Service. You have the right to prompt and professional assistance when dealing with the IRS. The people you speak with should be respectful, and help you understand the information they provide to you. You have the right to file a complaint for poor service. First, ask to speak with a supervisor.
3. The Right to Pay No More than the Correct Amount of Tax. You have the right to only pay what is legally owed. You can schedule an appointment with your local Volunteer Income Tax Assistance (VITA) site to have your tax returns done by a professional free of charge.
4. The Right to Challenge the IRS and Be Heard. You have the right to disagree with the IRS and to submit documents that support your side. You have the right to receive a quick and fair response from the IRS. You can expect to get a reply from the IRS within 30 days.
5. The Right to Appeal an IRS Decision. You have the right to appeal most IRS decisions when you disagree. You have the right to take your tax case to court.
6. The Right to Finality. You have the right to know how much time you have to challenge the IRS. You have the right to know how much time the IRS is allowed to take to audit a particular tax year and when an audit is complete. In most cases, the IRS can audit the past 3 years of tax returns. In the case of more substantial errors, the IRS can go back 6 years. You should keep at least the last 6 years of tax returns for your records.
7. The Right to Privacy. You have the right to expect that any IRS action will comply with the law and will only be as intrusive as necessary. The IRS will also respect all other rights you are owed.
8. The Right to Confidentiality. You have the right to expect that any information you provide will not be given to anyone without your permission or unless required by law. Only after you sign a release form can your information be shared.
9. The Right to Retain Representation. You have the right to hire a lawyer when dealing with the IRS. You also have the right to know that if you cannot afford a lawyer you may be eligible for assistance from a Low Income Taxpayer Clinic.
10. The Right to a Fair and Just Tax System. You have the right to expect the tax system to consider all facts and circumstances that might affect your ability to pay.
For more information about how these rights apply to you, visit http://www.taxpayeradvocate.irs.gov/About-TAS/Taxpayer-Rights.
This article was written by John Sayers and appeared in The Alert: Volume 31, Issue 2. Click here to read a full PDF of this issue!
I am an H-2A worker. May I claim my spouse and/or children as dependents on my tax return?
Workers with dependents who live in Mexico, Canada or the United States may claim exemption deductions for their dependents. The worker’s spouse and dependents need a Social Security Number or an Individual Tax Identification Number (ITIN) to claim exemptions. If a dependent is not eligible for a Social Security Number, the dependents may apply to the IRS for an Individual Tax Identification Number (ITIN) when the tax return is filed.
Other Resources
I employ H-2A workers. Should I withhold taxes from their pay?
While withholding is not required by law, withholding may benefit both H-2A employers and H-2A workers. Withholding creates an incentive for H-2A workers to file a tax return. When workers file tax returns, the IRS does not have to initiate collection efforts, and employers do not have to deal with hassles such as wage garnishment. If an H-2A employer does not withhold income, the worker should make estimated payments to avoid owing a lot of taxes at the end of the year.
Other Resources
I employ H-2A workers. Should I give them a 1099 or a W-2?
H2A workers must receive a W-2 Wage and Tax Statement. They should not receive a1099. If an H-2A worker has filed taxes using a 1099, the employer should issue a corrected income statement on form W-2. For more information, please see http://www.irs.gov/Individuals/International-Taxpayers/Foreign-AgriculturalWorkers.
If an H2A worker filed a return with a 1099, he or she should contact the Legal Aid Society of Cleveland to get help amending their prior returns. The worker should call Legal Aid at 1-888-817-3777.
Other Resources
Do H-2A workers have to pay taxes?
Yes. Foreign agricultural workers earning more than $600 are required to report this information in Box 1 of a W-2 Wage and Tax Statement. All H-2A workers should receive a W-2, and not a 1099 from their employer. For more information, please see IRS Publication 519 at http://www.irs.gov/publications/p519/index.html.
Other Resources
I have a criminal record and need to find work. Are there resources to help me?
New Ohio Law and Federal Programs Help Employers Hire People Returning from Prison
In Ohio there were many laws preventing people with criminal records from working in certain kinds of jobs. In 2012, however, Ohio passed a new law that helps people returning from prison get jobs. Also, there are two federal programs that encourage employers to hire people with criminal backgrounds.
Under the new law people who committed nonviolent offenses can now work as optical dispensers, salvage dealers, hearing aid dealers and fitters, and can obtain licenses in cosmetology and construction. The new law also created Certificates of Qualification for Employment, which can help people get jobs they could not have had before. (More information about CQEs can be found in the article “Certificate of Qualification for Employment: New Help with Jobs for People with a Criminal Record,” in this issue of The Alert.)
The CQE allows employers to hire people whose criminal record would have not allowed them to do the job before. Licensing boards can also grant a license to someone with a CQE who could not have obtained the license before. The CQE protects employers from any negligent hiring claim. There are some limits to using a CQE when applying for jobs in law enforcement, a pain clinic, and health care settings.
Employers can also benefit from programs that support hiring people with criminal backgrounds. First, the Workforce Opportunity Tax Credit (WOTC) can reduce an employer’s federal income tax liability by as much as $2,400 per qualified new worker. There is no limit on the number of new hires claimed and the credit applies to wages paid to full-time, part-time and temporary employees. The employer must complete a one-page form before offering the job and another form within 28 days of hiring an eligible employee.
For more information on how to apply for the WOTC, contact the Ohio Department of Jobs and Families services at 1.888.296.7541, Option 9.
The second program, called Federal Bonding, protects employers financially who hire a job applicant who has a criminal history. Federal bonding reimburses employers for loss of money or property in the event that an employee covered by the bond is dishonest, commits theft, forgery, larceny, embezzlement of property or money. The bond coverage ranges from about $5,000 up to $25,000. The bond insurance is free to the employer. Coverage begins the first day of the applicant’s employment and ends after six months.
For more information on how to access this coverage, contact Ohio’s State Bureau of Quality and Community Partnerships at 614.728.1534.
https://www.hirenetwork.org/content/work-opportunity-tax-credit
http://www.bonds4jobs.com/highlights.html
https://www.hirenetwork.org/content/federal-bonding-program
This article was written by Bishara Addison of Towards Employment and appeared in The Alert: Volume 29, Issue 2. Click here to read the full issue.
I am a senior and a homeowner. Are there any special tax breaks for me?
Ohio’s Homestead Exemption exempts the first $25,000 of the value of your home from being taxed. For example, a home that is worth $100,000 will be taxed as if it were worth $75,000. On average people who qualify save $400 a year.
Who is eligible? Homeowners who:
- Are 65 years old or will turn 65 this year, or
- Were permanently and totally disabled on or before the 1st day of the year in which they file, or
- Are the surviving spouse of a person who was already enrolled in Homestead, and the survivor was at least 59 years old when the spouse died.
What property is eligible for the exemption?
- The property must be the place where you live most of the time, and
- You must have been living there as of January 1st, and
- Your name must be on the deed; if the property is held in a trust, you must have a copy of the trust.
You must apply for the exemption by June 3, 2013. (A late application can also be filed for last year.)
If you apply based on your AGE, you must have PROOF OF AGE. For proof, you can use things like a driver’s license (current or expired), State of Ohio ID card, birth certificate or passport (current or expired).
If you apply based on DISABILITY, you must have PROOF OF DISABILITY. For proof, you can give things like the Auditor’s Certificate of Disability form signed by your doctor OR a statement from Social Security, the Department of Veterans Affairs, the Railroad Retirement Board, or the Ohio Bureau of Workers Compensation finding you to be totally and permanently disabled.
If you are found to be eligible, you do not have to re-apply in future years.
To get an application form, more information and help, call your county Auditor’s Homestead Department:
- In Cuyahoga County, call 216.443.7101
- In Ashtabula County, call 440.576.3793
- In Lake County, call 440.350.2536
- In Geauga County, call 440.279.1617
- In Lorain County, call 440.329.5207
This article was written by Legal Aid attorney Marley Eiger and appeared in The Alert: Volume 29, Issue 1. Click here to read the full issue.
I owe federal income taxes, but I cannot pay. What can I do?
You have at least three choices.
- Make monthly payments through an “Installment Agreement.”
- Ask to be placed in “Currently Not Collectible” status because you face a financial hardship. Currently Not Collectible status means the IRS will not collect on the debt, except to take your future tax refunds and apply them to this debt, but the debt still exists.
- Offer to settle the debt by paying part of the tax. This is called an “Offer In Compromise,” and is based on your financial condition.
The IRS claims that I owe them for my spouse’s tax debt. Is there anything I can do?
When you sign a tax return with your spouse, both of you are responsible for any tax debt resulting from that tax return. That means you could be responsible for the whole tax debt even if you did not earn any money that year or if the debt is your spouse’s fault. You may qualify for innocent spouse relief which means you may not have to pay all or part of that tax debt.
Consumer Protections and Scams: What Should I Know about the Economic Impact Payment or Stimulus Check if I Do NOT Regularly File Taxes (Non-filer)?
Who does NOT regularly have to file taxes and is considered a “non-filer” for purposes of the stimulus payments?
“Non-filers” include all of the following groups of people:
- Anyone who receives IRS Form SSA-1099 (social security recipients)
- Anyone who receives Form RRB-1099 (railroad retirees)
- Anyone whose only income is Supplemental Security Income (SSI)
- Anyone who receive veterans disability compensation, pension or survivor benefits from the Department of Veterans Affairs and did not file a tax return for the 2018 or 2019 tax years;
- Anyone who earned income under $12,200 if single or $24,400 if married during the 2019 tax year
What is the purpose of the economic impact payment, also knows as a “stimulus check”?
On March 27, 2020, the Coronavirus Aid, Relief and Economic Stimulus “CARES” Act became law. This law created a one-time payment to many people in the United States from the federal government. The reason for the payment is to help people financially who face economic hardships caused by the coronavirus pandemic. The government also wants to boost spending power and spur economic activity.
Who is eligible for the economic impact payment?
Any individual in the United States is eligible for the payment except someone who is a nonresident alien or a person who can be claimed as someone else’s dependent.
How much is the payment?
- Individuals who report adjusted gross income up to $75,000 on their tax returns will receive $1,200.
- Married couples who earn up to $150,000 and file a joint tax return will receive a payment of $2,400.
- Parents or caregivers may receive up to $500 for each qualifying child claimed as a dependent.
The payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. For example, an individual who reports gross income of $80,000 would get $950 instead of $1200 (50 X 5 = $250; $1200 – $250 = $950).
Do I have to file a tax return to receive the stimulus payment?
Non-filers do not have to file a tax return to get a stimulus payment. Some non-filers will get individual stimulus payments automatically based on other information. The IRS will use the information on IRS Form SSA-1099 or RRB-1099 in place of a federal tax return if you do not typically have to file a tax return. If you receive Supplemental Security Income (SSI) the IRS will use the information on file with the Social Security Administration in place of a tax return. Each person will receive $1,200 per person automatically, but no additional money for any dependents unless you register with the new IRS non-filer tool. See Q and A below.
Who should use the new IRS non-filer tool to get their stimulus payments?
Some non-filers must use a new tool created by the IRS to get their stimulus payments. Those group include the following people:
- Anyone who receives veterans disability compensation, pension or survivor benefits from the Department of Veterans Affairs and did not file a tax return for the 2018 or 2019 tax years; or
- Anyone who has earned income under $12,200 if single or $24,400 if married during the 2019 tax year; or
- Anyone who receives IRS Form SSA-1099 or RRB-1099 or SSI but also has dependents who qualify for stimulus payments.
Click here to go to the IRS non-filer tool.
Click here to see step-by-step instructions for the non-filer tool.
The Cuyahoga Earned Income Tax Credit Coalition will help non-filers register for their stimulus payments. To request services, send an email to support@refundohio.org with name, phone number and what assistance is needed. A volunteer from the EITC will call to follow up.
What Action is Needed for People Receiving SSI to Receive $500 Per Child Payment?
Supplemental Security Income (SSI) recipients who don’t file tax returns will start receiving their automatic Economic Impact Payments directly from the Treasury Department in early May.
People receiving SSI benefits who did not file 2018 or 2019 taxes, and have qualifying children under age 17, however, need to act by Tuesday, May 5, in order to receive additional payments for their eligible children quickly. They should go to the IRS’s webpage at www.irs.gov/coronavirus/non-filers-enter-payment-info-here and visit the Non-Filers: Enter Your Information section.
Please note that DirectExpress account holders may use the IRS’s Non-Filer tool, but they cannot receive their and their children’s payment on their DirectExpress card. They may only enter non-DirectExpress bank account information for direct deposit or leave bank information empty to receive a paper check by mail.
Click here to go to the IRS non-filer tool.
Click here to see step-by-step instructions for the non-filer tool.
The Cuyahoga Earned Income Tax Credit Coalition will help non-filers register for their stimulus payments. To request services, send an email to support@refundohio.org with name, phone number and what assistance is needed. A volunteer from the EITC will call to follow up.
Will the stimulus funds I receive affect my 2020 federal tax return?
Yes. The stimulus funds are a credit similar to the earned income tax credit or the additional child tax credit. On the 2020 income tax return that will be prepared during the 2021 tax season, there likely will be a line entry under payments and refundable credits in which the stimulus credit can be calculated using the taxpayer’s 2020 income. The stimulus check will be subtracted from the credit due on the return. If more credit is due, it will become part of a refund. If there is an overpayment through the stimulus check, the amount of the overpayment will not have to be returned to the IRS.
Will I receive a stimulus check if I owe debt to a federal or state agency?
Yes. People who owe money in any form to a federal or state agency, or a credit card company, will still get their stimulus check. Except, if a person owes past due child support payments and the state has reported that debt to the Treasury Department, then the individual will not get a stimulus check.
Does the money I get from the stimulus check affect my food stamps, Medicaid, or other public benefits?
No. This payment does NOT count as income for eligibility or figuring out your benefit amount for any federally means tested program for twelve months. This means that the check will not count as income or resources for SNAP (food stamps), TANF (PRC or OWF), Medicaid, or Social Security benefits for one year from the date that the payment is issued. After one year, if you have not spent all of the payment, it could affect your benefits then. Because the payment does not get counted for the first year, it will have no affect on your eligibility for benefits or on your benefit amount during this year.
When will I receive my stimulus check?
The U.S. Treasury will begin providing stimulus checks to taxpayers during the first week of April. These will be direct deposited for anyone who provided banking information on their tax returns or through the IRS non-filer tool. For all others, the payments will be mailed.
Can I track my payment?
Yes. Go to https://www.irs.gov/coronavirus/get-my-payment.
Where can I find more information?
The IRS will post all key information on www.IRS.gov/coronavirus as it becomes available.
Is there a guide for COVID economic impact payments?
The below information is from the Consumer Finance Protection Bureau. You can also learn more from the IRS at this webpage.
During the COVID-19 pandemic, the federal government has passed three major pieces of legislation to provide financial relief to individuals and families. The American Recovery Plan Act (ARPA) provides the most recent round of Economic Impact Payments, also referred to as stimulus payments, to millions of Americans.
While payments are currently being distributed through the Internal Revenue Service (IRS) to eligible recipients, there are still millions of people who haven’t received the first or second payments and may not receive the third because the IRS does not have their account information or address. If you haven’t received one or multiple payments, you still have an opportunity to claim the financial relief you’re eligible for, but you must take action by filing a tax return or filing for an extension by May 17, 2021.
Here’s our complete guide to the COVID-19 Economic Impact Payments (EIPs).
- How much could I receive?
- How do I know if I’m eligible?
- How will I receive my payments?
- What can I do if I haven’t received my payment or if I’m eligible to receive more?
- What do I do if my bank or credit union has charged my account fees when I got the EIP?
- How do I check the status of my payment?
- Beware of scammers pretending to be the IRS
How much could I receive?
The most recent stimulus payment, which began rolling out in March 2021, expands the amount you can receive to $1,400 per single individual or $2,800 for a married couple filing jointly. It also expands the payments and eligibility for dependents to include those over the age of 17, including college students and adults with disabilities.
The amount you’re eligible to receive is calculated based on your income on your 2019 tax return unless you had already filed your 2020 tax return before payments were sent. If your income dropped in 2020 as a result of the pandemic and you qualify for a larger stimulus payment, the IRS will issue a second adjusted payment once the 2020 tax returns are processed.
How do I know if I’m eligible?
In addition to the income limits, individuals must also meet certain citizenship and identification requirements. If you haven’t received prior payments, keep in mind that qualifications for each payment vary slightly.
For example, the latest round of EIPs allow households to claim payments for their qualifying dependents with a Social Security number (SSN), even if the head of the household or married couple doesn’t have a SSN.
How will I receive my payments?
If you file your taxes, you’ll likely receive your payments automatically and in the same way you received your 2020, 2019, or 2018 tax refunds. The majority of payments will be delivered through direct deposit, check, or through a pre-paid MetaBank debit card issued by the Department of Treasury.
If you don’t typically file your taxes
If you’re a recipient of certain federal benefits, you’ll receive the latest EIP in the same way you receive your benefit payments.
If you don’t typically file a tax return because your income is below tax-filing thresholds and you haven’t received an EIP, learn what steps you need to take.
Direct payments
The majority of payments will be issued in same way you received your 2020 or 2019 tax refund or your federal benefits. If you have direct deposit set up for your tax refunds, your stimulus payments will be delivered to the same banking or credit union account, or onto an existing pre-paid card.
Check or EIP Card
If you’re not set up with direct deposit, you’ll receive your payment by check or on a government-issued prepaid VISA debit card through MetaBank . If you received a card for one of your first stimulus payments, this card won’t be reloaded, so you’ll receive a new card.
The EIP Card will be sent in a white envelope from “Economic Impact Payment Card” and will display the U.S. Department of the Treasury seal.
Learn more about the EIP prepaid debit card
Federal benefits
Recipients of certain federal benefits, who don’t typically file their taxes, are likely to receive their stimulus payments in the same way they receive their benefits. This includes recipients of:
- Social Security retirement, survivor, or disability (SSDI) from the Social Security Administration
- Supplemental Security Income (SSI) from the Social Security Administration
- Railroad Retirement and Survivors from the U.S. Railroad Retirement Board
- Veterans disability compensation, pension, or survivor benefits from the Department of Veterans Affairs
What can I do if I haven’t received my payments or if I’m eligible to receive more?
There are several scenarios where individuals may not have received any or all of the payments they’re eligible for. Common situations include:
- You don’t normally file taxes and the IRS doesn’t have your recent information on file.
- You moved or changed bank accounts since the last time you received a tax refund or other benefit.
- You had a child in 2020 and are eligible to receive EIPs for your dependents.
- You were previously claimed as a dependent but became independent in 2020. For example, you turned 19 (non-student), 24 (student), graduated, or got married.
To receive your first and second EIP or an adjusted amount, you must file a 2020 tax return or file for an extension by May 17, 2021. The Recovery Rebate Credit – on Line 30 on the individual income tax return (1040 or 1040 SR) – allows you to claim missed payments.
Get help if you need it
You don’t have to be an expert to file your taxes. If you meet certain income requirements, there may be free tax preparation options to help you get your refund and all the credits you’ve earned.
Because of the pandemic, many Volunteer Income Tax Assistance (VITA) programs are offering a variety of tax preparation options in 2021, including virtual tax preparation, drop-off services, and self-preparation support.
In addition, get support with free tax preparation or software to prepare your own taxes through MyFreeTaxes or Free File Alliance .
If you do seek the help of a professional, ask them about choosing your 2019 or 2020 income in order to maximize your Earned Income Credit and Child Tax Credit.
Learn more about filing your 2020 tax return
Changing your dependent tax status
If you’re thinking of changing your filing status from dependent to independent, this may have significant consequences for whomever has been claiming you as a dependent. For example, they may miss out on other tax credits worth more than the Recovery Rebate Credit.
Take time to consult with your family or tax professional before changing your dependent status.
Learn more about claiming a dependent
What do I do if my bank or credit union has taken my EIP to cover fees or overdrafts?
If you think you didn’t receive your full payment because your bank took some of it to cover money owed to the bank, call them and ask for them to give you access to all of the funds. Your bank may be willing to give you access to your full EIP. Sometimes banks and credit unions do this by refunding fees or giving you a temporary credit if your account is overdrawn. If they give you a credit, make sure you find out when you must pay it back.
Use the following conversation points to help you ask your bank, credit union, or prepaid card provider for help:
Explain your financial situation is a result of COVID-19 and ask for a credit or other help for any fees or amount for which you are overdrawn.
Remember, when speaking with your bank or credit union, always be prepared. Have all your statements available and ask for them to explain any and all fees that were applied to your account.
How do I check the status of my payment?
You can check the status of both your stimulus payments – including how the payment will be delivered (direct deposit, check, or debit card) – by using the Get My Payment tool , also available in Spanish .
Beware of scammers pretending to be the IRS
With the rollout of EIPs, there’s an increased risk of scams. It’s important to stay vigilant and aware of unsolicited communications asking for your personal or private information—through mail, email, phone call, text, social media or websites—that:
It’s important to remember that the IRS will never ask you for your personal information or threaten your benefits by phone call, email, text or social media. They also won’t threaten you with jail or lawsuits, or demand tax payments on gift cards.
If you receive an unsolicited email, text, or social media attempt that appears to be from the IRS or an organization associated with the IRS, like the Department of the Treasury Electronic Federal Tax Payment System, notify the IRS at phishing@irs.gov.
If you’re a victim of a COVID-19 scam, report it to the Department of Justice’s National Center for Disaster Fraud (NCDF) at 866-720-5721 or submit an online complaint . IRS-related scams, including fraud or theft of Economic Impact Payments, should also be reported to the Treasury Inspector General for Tax Administration (TIGTA) .
Consumer Protections and Scams: What Should I Know about the Economic Impact Payment or Stimulus Check if I Regularly File Taxes?
What is the purpose of the economic impact payment, also knows as a “stimulus check”?
On March 27, 2020, the Coronavirus Aid, Relief and Economic Stimulus “CARES” Act became law. This law created a one-time payment to many people in the United States from the federal government. The reason for the payment is to help people financially who face economic hardships caused by the coronavirus pandemic. The government also wants to boost spending power and spur economic activity.
Who is eligible for the economic impact payment?
Any individual in the United States is eligible for the payment except someone who is a nonresident alien or a person who can be claimed as someone else’s dependent.
How much is the payment?
- Individuals who report adjusted gross income up to $75,000 on their tax returns will receive $1,200.
- Married couples who earn up to $150,000 and file a joint tax return will receive a payment of $2,400.
- Parents or caregivers may receive up to $500 for each qualifying child claimed as a dependent.
The payment amount is reduced by $5 for each $100 above the $75,000/$150,000 thresholds. For example, an individual who reports gross income of $80,000 would get $950 instead of $1200 (50 X 5 = $250; $1200 – $250 = $950).
Must I file at tax return to receive the payment?
Yes. The IRS requires the filing of a tax return for the 2018 or 2019 tax year to receive a payment.
What should I do if I have not filed a tax return for the 2018 and the 2019 tax years?
File a tax return electronically for either or both years. If possible, include direct deposit banking information on the return. Filing a tax return electronically will speed up the processing time. It could take six to eight weeks to receive a stimulus check if you file and mail a paper return.
- The IRS has a free tax filing service at https://www.irs.gov/filing/free-file-do-your-federal-taxes-for-free.
- There is also a commercial cite, FreeTaxUSA that prepares for free: https://www.freetaxusa.com/
- If you have low income, you can request help from the Earned Income Tax Credit Coalition. Individuals in need of help will have 3 options for how to access assistance, depending on personal preference and access to technology. To request services, send an email to support@refundohio.org with name, phone number and what assistance is needed. A volunteer from the EITC will call to follow up.
The Cuyahoga Earned Income Tax Credit Coalition is launching virtual tax preparation services. This free service for low income residents replaces the usual Volunteer Income Tax Assistance (VITA) program. Individuals in need of help will have 3 options for how to access assistance, depending on personal preference and access to technology. The EITC will also help non-filers register for their stimulus checks via the IRS non-filer tool To request services, send an email to support@refundohio.org with client’s name, phone number and what assistance they need. A volunteer from the EITC will call to follow up. In the meantime, the Coalition will return to in-person tax preparation assistance as soon as the Governor lifts the stay at home order.
Will the stimulus funds I receive affect my 2020 federal tax return?
Yes. The stimulus funds are a credit similar to the earned income tax credit or the additional child tax credit. On the 2020 income tax return that will be prepared during the 2021 tax season, there likely will be a line entry under payments and refundable credits in which the stimulus credit can be calculated using the taxpayer’s 2020 income. The stimulus check will be subtracted from the credit due on the return. If more credit is due, it will become part of a refund. If there is an overpayment through the stimulus check, the amount of the overpayment will not have to be returned to the IRS.
Will I receive a stimulus check if I owe debt to a federal or state agency?
Yes. People who owe money in any form to a federal or state agency, or a credit card company, will still get their stimulus check. Except, if a person owes past due child support payments and the state has reported that debt to the Treasury Department, then the individual will not get a stimulus check.
Does the money I get from the stimulus check affect my food stamps, Medicaid, or other public benefits?
No. This payment does NOT count as income for eligibility or figuring out your benefit amount for any federally means tested program for twelve months. This means that the check will not count as income or resources for SNAP (food stamps), TANF (PRC or OWF), Medicaid, or Social Security benefits for one year from the date that the payment is issued. After one year, if you have not spent all of the payment, it could affect your benefits then. Because the payment does not get counted for the first year, it will have no affect on your eligibility for benefits or on your benefit amount during this year.
When will I receive my stimulus check?
The U.S. Treasury will begin providing stimulus checks to taxpayers during the first week of April. These will be direct deposited for anyone who provided banking information on their tax returns. For all others, the payments will be mailed.
Can I track my payment?
Yes. Go to https://www.irs.gov/coronavirus/get-my-payment.
Where can I find more information?
The IRS will post all key information on www.IRS.gov/coronavirus as it becomes available.
I am a low-income entrepreneur – can I get legal help with taxes?
The Legal Aid Society of Cleveland Low Income Taxpayer Clinic is available to assist self-employed individuals with their federal income tax problems.
Free help and education (including presentations) are available through the Clinic to help low-income entrepreneurs with their IRS issues, including the possibility of referrals for free tax preparation assistance and business advice.
Please contact Anne Sweeney, Managing Attorney for Community Engagement, at Anne.Sweeney@lasclev.org with inquiries about this assistance.
How does the IRS help with tax preparation, refunds, and fraud?
The Internal Revenue Service (IRS) has made it easier for taxpayers to file their tax returns, as well as to monitor and protect their federal income tax accounts. Here are some examples:
Complete your tax return for free. If your income is below $58,000 – you can use free federal income tax preparation software. It is available online 24/7. The IRS states the process is safe and secure. Refunds may be directly deposited into your bank account. Visit http://www.IRS.gov/freefile for more details.
Obtain tax return and income transcripts at no cost. If you need your past income tax or earnings records, for example, because you are applying for a mortgage or a student loan, you may obtain a copy for free. Tax return and income transcripts may be ordered online, without charge, and delivered electronically or by mail. Taxpayers also may sign and submit to the IRS Form 4506-T or call (800) 908-9946 to obtain their free tax return transcripts. IRS forms can be found at http://www.irs.gov/Forms-&-Pubs.
Monitor the status of your refund. The most up to date information about your refund can be found using the IRS tool “Where’s My Refund?” (http://www.irs.gov/Refunds). Taxpayers also can learn the status of their refund by calling the IRS Refund Hotline at 800-829-1954. If you haven’t received your refund within 20 days of filing an electronic return or six weeks from the time of mailing your paper return, you may contact the IRS at 800-829-1040 and a representative will figure out the status of your refund.
Contact the Taxpayer Advocate Service. If you have a problem with the IRS that you can’t resolve, the Taxpayer Advocate Service (TAS) is available to help you. TAS is an independent organization within the IRS that works on behalf of taxpayers. TAS may help taxpayers who have financial difficulties, who face an immediate threat of adverse action, or who have not heard back from the IRS in response to a question. You can contact the Local Taxpayer Advocate (LTA) at (216) 522-7134 or send Form 911 to the LTA by fax at (855) 824-6409 or by mail to 1240 E. Ninth St., Room 423, Cleveland, Ohio 44199.
Protect yourself from refund fraud related to identity theft. Refund fraud can cause lots of problems for taxpayers. Determine if any of the following problems have occurred:
- More than one tax refund was filed for you for a single tax year;
- IRS records show you received more wages than you actually earned; or
- Your state or federal benefits were reduced or cancelled because the agency received incorrect information concerning a change in your income.
If so, you should immediately act in the following ways to protect yourself from identity theft:
- Contact the IRS Identity Protection Specialized Unit at (800) 908-4490 and complete and submit to the IRS Identity Theft Affidavit Form 14039;
- Notify your local police department to make a report;
- Contact the Federal Trade Commission (FTC) through its Identity Theft Hotline at www.consumer.ftc.gov or by calling (877)438-4338; and,
- Contact the three major credit bureaus: Equifax – www.equifax.com or (800) 525-6285; Experian – www.Experian.com or (888) 397-3742; and, TransUnion – www.transunion.com or (800) 680-7289 to tell them you were a victim of identity theft.
Guard against tax preparer abuse. If you believe your tax return was not prepared correctly, immediately complete and submit to the IRS Form 14157. Fraud by tax preparers occurs when the preparer claims inflated personal or business expenses, false deductions, unallowable credits and/or excessive exemptions on returns prepared for their clients. For suspected cases of fraud, contact the Ohio Attorney General at 800-282-0515, local law enforcement agencies and an attorney who specializes in civil litigation who will counsel you on your rights and remedies.
This article was written by Legal Aid Supervising Attorney Dennis Dobos and appeared in The Alert: Volume 30, Issue 3. Click here to read a full PDF of this issue!