Update on Economic Impact Payments for Social Security and SSI Beneficiaries

Beginning May 27, the Internal Revenue Service (IRS) will issue Economic Impact Payments (EIP) to approximately 1.4 million SSI recipients with representative payees and 10.4 million Social Security beneficiaries with representative payees.

The IRS started issuing the EIPs via direct deposit and Direct Express starting May 22, to the same direct deposit account or Direct Express card as the recipient’s monthly Social Security or SSI payment. Paper check EIPs were mailed starting May 27.

Visit www.ssa.gov/coronavirus/#reppayee to learn about EIPs and representative payees. You can find the eligibility requirements and other information about the EIPs at the IRS’ Economic Impact Payment Information Center.

Millions of people will get their Economic Impact Payment by prepaid debit card

Take Note: You may receive your Economic Impact Payment via a prepaid debit card that will come in a plain envelope! DO NOT throw it away!

Nearly four million people are being sent their Economic Impact Payment by prepaid debit cards, instead of paper checks. The determination of which taxpayers receive a debit card was made by the Bureau of the Fiscal Service, another part of the Treasury Department that works with the IRS to handle distribution of the payments.

These Economic Impact Payment Cards arrive in a plain envelope from Money Network Cardholder Services.  The Visa name will appear on the front of the card; the back of the card has the name of the issuing bank, MetaBank®, N.A. The information included with the card will explain that the card is an Economic Impact Payment Card.

Those who receive Economic Impact Payment by prepaid debit card can do the following without any fees:

•  Make purchases online and at any retail location where Visa is accepted
•  Get cash from in-network ATMs
•  Transfer funds to their personal bank account
•  Check their card balance online, by mobile app, or by phone

This free, prepaid card also provides consumer protections available to traditional bank account owners, including protection against fraud, loss, and other errors.

The card will come with instructions on how to activate and use it. Learn more at www.eipcard.com.

What people really want to know about Economic Impact Payments

Is this payment considered taxable income?

No, the payment is not income and taxpayers will not owe tax on it. The payment will not reduce a taxpayer’s refund or increase the amount they owe when they file their 2020 tax return next year. A payment also will not affect income for purposes of determining eligibility for federal government assistance or benefit programs.

Can people who receive a Form SSA-1099 or RRB-1099 use Get My Payment to check their payment status?

Yes, they will be able to use Get My Payment to check the status of their payment after verifying their identity by answering the required security questions.

If someone’s bank account information has changed since they filed their last tax return, can they update it using Get My Payment?

To help protect against potential fraud, the tool also does not allow people to change direct deposit bank account information already on file with the IRS.

If the IRS issues a direct deposit based on the account information that the taxpayer provided on their tax return and the bank information is now invalid or the account has been closed, the bank will reject the deposit. The agency will then mail payment as soon as possible to the address they have on file. Get My Payment will be updated to reflect the date a payment will be mailed. It will take up to 14 days to receive the payment, standard mailing time.

Where can people get more information?

Taxpayers who are required to file a tax return, can go to IRS Free File to file electronically. If they aren’t required to file, they should go to the Non-Filers: Enter Payment Info Here tool and submit their information to receive an Economic Impact Payment.

For the complete lists of FAQs, visit the Economic Impact Payment and the Get My Payment tool pages on IRS.gov. The IRS updates these FAQs regularly.

Why the Economic Impact Payment amount could be different than anticipated

If your Economic Impact Payment was less than expected it could have been because of your income, filing status, or family size. See below for the some common scenarios the IRS gives that may explain why you received a different payment amount than expected:

You have not filed a 2019 tax return, or the IRS has not finished processing your 2019 return 

Payments are automatic for eligible people who filed a tax return for 2018 or 2019. Typically, the IRS uses information from the 2019 tax return to calculate the Economic Impact Payment.  Instead, the IRS will use the 2018 return if the taxpayer has not yet filed for 2019. If a taxpayer has already filed for 2019, the agency will still use the 2018 return if the IRS has not finished processing the 2019 return. Remember, the IRS accepting a tax return electronically is different than completing processing; any issues with the 2019 return mean the IRS would’ve used the 2018 filing.

If the IRS used the 2018 return, various life changes in 2019 would not be reflected in the payment. These may include higher or lower income or birth or adoption of a child.

In many cases, however, these taxpayers may be able to claim an additional amount on the 2020 tax return they file next year. This could include up to an additional $500 for each qualifying child not reflected in their Economic Impact Payment.

Claimed dependents are not eligible for an additional $500 payment

Only children eligible for the Child Tax Credit qualify for the additional payment of up to $500 per child. To claim the Child Tax Credit, the taxpayer generally must be related to the child, live with them more than half the year and provide at least half of their support. Besides their own children, adopted children and foster children, eligible children can include the taxpayer’s younger siblings, grandchildren, nieces and nephews if they can be claimed as dependents. In addition, any qualifying child must be a U.S. citizen, permanent resident or other qualifying resident alien. The child must also be under the age of 17 at the end of the year for the tax return on which the IRS bases the payment determination.

A qualifying child must have a valid Social Security number (SSN) or an Adoption Taxpayer Identification Number (ATIN). A child with an Individual Taxpayer Identification Number (ITIN) is not eligible for an additional payment.

Parents who are not married to each other and do not file a joint return cannot both claim their qualifying child as a dependent. The parent who claimed their child on their 2019 return may have received an additional Economic Impact Payment for their qualifying child. When the parent who did not receive an additional payment files their 2020 tax return next year, they may be able to claim up to an additional $500 per-child amount on that return if they qualify to claim the child as their qualifying child for 2020.

Dependents are college students 

Pursuant to the CARES Act, dependent college students do not qualify for an EIP, and even though their parents may claim them as dependents, they normally do not qualify for the additional $500 payment. For example, under the law, a 20-year-old full-time college student claimed as a dependent on their mother’s 2019 federal income tax return is not eligible for a $1,200 Economic Impact Payment. In addition, the student’s mother will not receive an additional $500 Economic Impact Payment for the student because they do not qualify as a child younger than 17. This scenario could also apply if a parent’s 2019 tax return hasn’t been processed yet by the IRS before the payments were calculated, and a college student was claimed on a 2018 tax return.

However, if the student cannot be claimed as a dependent by their mother or anyone else for 2020, that student may be eligible to claim a $1,200 credit on their 2020 tax return next year.

Claimed dependents are parents or relatives, age 17 or older

If a dependent is 17 or older, they do not qualify the additional $500. If a taxpayer claimed a parent or any other relative age 17 or older on their tax return, that dependent will not receive a $1,200 payment.  In addition, the taxpayer will not receive an additional $500 payment because the parent or other relative is not a qualifying child under age 17.

However, if the parent or other relative cannot be claimed as a dependent on the taxpayer’s or anyone else’s return for 2020, the parent or relative may be eligible to individually claim a $1,200 credit on their 2020 tax return filed next year.

Past-due child support was deducted from the payment

The Economic Impact Payment is offset only by past-due child support. The Bureau of the Fiscal Service will send the taxpayer a notice if an offset occurs.

For taxpayers who are married filing jointly and filed an injured spouse claim with their 2019 tax return (or 2018 tax return if they haven’t filed the 2019 tax return), half of the total payment will be sent to each spouse. Only the payment of the spouse who owes past-due child support should be offset.

The IRS is aware that a portion of the payment sent to a spouse who filed an injured spouse claim with his or her 2019 tax return (or 2018 tax return if no 2019 tax return has been filed) may have been offset by the injured spouse’s past-due child support. The IRS is working with the Bureau of Fiscal Service and the U.S. Department of Health and Human Services, Office of Child Support Enforcement, to resolve this issue as quickly as possible. If you filed an injured spouse claim with your return and are impacted by this issue, you do not need to take any action. The injured spouse will receive their unpaid half of the total payment when the issue is resolved. We apologize for the inconvenience this may have caused.

Garnishments by creditors reduced the payment amount

Federal tax refunds, including the Economic Impact Payment, are not protected from garnishment by creditors by federal law once the proceeds are deposited into a taxpayer’s bank account.

What if the amount of my Economic Impact Payment is incorrect?

Everyone should review the eligibility requirements for their family to make sure they meet the criteria.

In many instances, eligible taxpayers who received a smaller-than-expected Economic Impact Payment (EIP) may qualify to receive an additional amount early next year when they file their 2020 federal income tax return. EIPs are technically an advance payment of a new temporary tax credit that eligible taxpayers can claim on their 2020 return. Everyone should keep for their records the letter they receive by mail within a few weeks after their payment is issued.

When taxpayers file their return next year, they can claim additional credits on their 2020 tax return if they are eligible for them. The IRS will provide further details on IRS.gov on the action they may need to take.

The EIP will not reduce a taxpayer’s refund or increase the amount they owe when they file a tax return early next year. It is also not taxable and is therefore should not be included in income on a 2020 return.

Act by Wednesday for chance to get quicker Economic Impact Payment; timeline for payments continues to accelerate

With a variety of steps underway to speed Economic Impact Payments, the Treasury Department and the Internal Revenue Service urged people to use Get My Payment by noon Wednesday, May 13, for a chance to get a quicker delivery.

The IRS, working in partnership with Treasury Department and the Bureau of Fiscal Services (BFS), continues to accelerate work to get Economic Impact Payments to even more people as soon as possible. Approximately 130 million individuals have already received payments worth more than $200 billion in the program’s first four weeks.

Starting later this month, the number of paper checks being delivered to taxpayers will sharply increase. For many taxpayers, the last chance to obtain a direct deposit of their Economic Impact Payment rather than receive a paper check is coming soon. People should visit Get My Payment on IRS.gov by noon Wednesday, May 13, to check on their payment status and, when available, provide their direct deposit information.

“We’re working hard to get more payments quickly to taxpayers,” said IRS Commissioner Chuck Rettig. “We want people to visit Get My Payment before the noon Wednesday deadline so they can provide their direct deposit information. Time is running out for a chance to get these payments several weeks earlier through direct deposit.”

After noon Wednesday, the IRS will begin preparing millions of files to send to BFS for paper checks that will begin arriving through late May and into June. Taxpayers who use Get My Payment before that cut-off can still take advantage of entering direct deposit information.

How Get My Payment works
The Get My Payment tool provides eligible taxpayers with a projected Economic Impact Payment deposit date. The information is updated once daily, usually overnight. There is no need to check more than once a day. Taxpayers who did not choose direct deposit on their last tax return can use this tool to input bank account information to receive their payment by direct deposit, expediting receipt.

Non-Filers portal remains available
For those not required to file a federal tax return, the Non-Filers: Enter Payment Info Here tool helps them submit basic information to receive an Economic Impact Payment quickly to their bank account. Developed in partnership between the IRS and the Free File Alliance, this tool provides a free and easy option for those who don’t receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, Supplemental Security Income (SSI) and VA Compensation and Pension (C&P) benefits. The Non-filers tool is also available in Spanish.

Eligible taxpayers who filed tax returns for 2019 or 2018 will receive the payments automatically. Automatic payments will also be sent to those receiving Social Security retirement, disability benefits, Railroad Retirement benefits, Veterans Affairs benefits or Supplemental Security Income soon.

Watch out for scams related to Economic Impact Payments
The IRS urges taxpayers to be on the lookout for scams related to the Economic Impact Payments. To use the new app or get information, taxpayers should visit IRS.gov. People should watch out for scams using email, phone calls or texts related to the payments. Be careful and cautious: The IRS will not send unsolicited electronic communications asking people to open attachments, visit a website or share personal or financial information.

Stay informed with Economic Impact Payment FAQs; Social Media platforms
Taxpayers should check the Frequently Asked Questions (FAQs) for more information.

IRS Social media reminder during COVID-19

For the latest information related to COVID-19, taxpayers can visit IRS.gov and follow IRS on various social media platforms, including:

  • YouTube: The IRS has video channels that provide short, informative videos on various tax related topics in English, American Sign Language (ASL) and a variety of foreign languages.
  • Twitter: IRS tweets include various tax-related announcements, news for tax professionals and hiring initiatives.
  • Facebook: The IRS posts valuable tax information for tax professionals and those needing help to resolve issues with the IRS on Facebook.
  • LinkedIn: The IRS posts important tax information, updates and announcements from the IRS on LinkedIn.
  • Instagram: The IRS shares taxpayer-friendly information to help filers prepare for the tax season and navigate tax law changes on Instagram. It also provides the latest tax scam information.

Has Covid-19 extended the Fair Use Exception on Copyright Protection due to Extended Learning?

Since education in the United States has traditionally been face-to-face in classrooms, policies regarding classroom usage of copyright-protected works have been re-examined in these exigent circumstances of online classes due to Covid-19. Educators and policy-makers’ perspectives on Fair Use were not written for situations where face-to-face education is over videoconferencing technology and in virtual classrooms; educator obligations regarding use and distribution of books, music, videos and even worksheets, as well as policies managing how teachers teach, and how students learn and document mastery of subjects, have been swiftly re-assessed.

While educators revised policies, two decisions were published; each has the potential to broaden how copyright-protected works can be used in virtual classrooms. On March 24, 2020, the Ninth Circuit said that “the defense of Fair Use, if applicable, should cover ‘teaching’ whether in a private or public setting.” The ruling did not distinguish between face-to-face education and distance learning, stating simply that “the Fair Use defense renders a use non-infringing. (Tresona Multimedia, LLC v Burbank High School Vocal Music Association)

The Supreme Court ruled that same week that a state could not be sued for copyright infringement by a company that held copyrights in photographs. Justice Kagan wrote the unanimous decision that “Article 1’s Intellectual Protection Clause could not provide the basis for an abrogation of sovereign immunity.” Congress could create that basis, but at this moment it does not exist. Accordingly, state-licensed schools might not be liable for copyright infringement, as the law currently stands. In a different time, Congress might take action to change this situation relatively briskly, but given the current complexities in the world, there is no expectation that such a law will exist before the end of this school year. (Allen et al. v. Cooper, Governor of North Carolina, et al.)

Fair Use Favors Flexibility

Even before these rulings came down, the concept of Fair Use gave broad latitude for many kinds of classroom uses. A Fair Use analysis looks at four factors (a) the purpose and character of the use; (b) the nature of the copyrighted work; (c) the amount and substantiality of the portion taken, and (d) the effect of the use upon the potential market. Copyright specialists affiliated with libraries around the U.S. looked to Fair Use in stating that “making materials available and accessible to students in this time of crisis will almost always be Fair Use. If we are being thoughtful in analysis and limiting activities to the specific needs … during this time of crisis, copyright law supports our uses.” Their position is that Fair Use “accommodates the flexibility required by our shared public health crisis, enabling society to function and progress while protecting human life and safety.”

The Tresona ruling looked to “the limited and transformative nature of the use and the work’s nonprofit educational purposes in enhancing the educational experience of … students.” A work is transformative Fair Use when “new expressive content or message is apparent,” even if “the allegedly infringing work makes few physical changes to the original or fails to comment on the original,” said the court.  Accordingly, a teacher creates a transformative work, which falls into the protective bubble of Fair Use, when they craft a message, enhance their students’ educational experience, or educate their students in creating expressive content; as Fair Use is a lawful use of copyright, such usage is non-infringing and should be permitted under educational policies at all times, but particularly while teaching in the shadow of COVID-19.

Copyright is Not Infringed in “Places Devoted to Instruction”

Even without reliance on Fair Use exceptions, Section 17 U.S.C. § 110(1) of the Copyright Act explicitly says that neither teachers nor students infringe on copyright when using a work “in the course of the face-to-face teaching activities of a non-profit educational institution, in a classroom or similar place devoted to instruction.” It is reasonable to conclude that internet-based teaching activities of public schools and non-profit educational institutions qualify as a “similar place devoted to instruction.” To the extent they might not, a Fair Use analysis of the “purpose and character” of said follow-on use should enable teachers to modify their in-classroom teaching activities for use online without worrying that they are infringing on someone’s copyright.

Well-known authors who are also licensors, have recently expanded their licenses to educators.  However, in the United States, between the Copyright Act exceptions and the nature of Fair Use, educators probably don’t need the author’s permission to read portions of the books with their students, and discuss passages in online classes any more than they need permission to do so in a traditional brick-and-mortar classroom.

Is Videoconferencing a Closed Educational Platform?

Given current Fair Use common law, teachers should not be required to ask permission from an author to post a video of themselves reading a copyrighted book to their students, especially if that video is sent via email to the students, or shared by the teacher only on a school’s secure networks or closed educational platforms. One ongoing question is whether third-party videoconferencing systems used as virtual classrooms are the equivalent of a school’s secure network or closed educational platform; if they are seen as analogous, educators using those platforms can rely on Section 110(1) exceptions. Even videos uploaded to YouTube could fall into that analogy, especially if the videos are not publicly listed on the service, and only those with the URL can access them.

As schools evaluate policies, they can review whether specific plans are permitted under the Copyright Act or are non-infringing because of Fair Use carve-outs; presuming follow-on uses are infringing forces teachers to forego educational opportunities for their students, and as they collaborate. Copyright owners should also take this time to examine their policies and license language; failure to do so risks public relations fallout. Copyright monopolism does not exist in the United States, but copyright protection does – the balance between the two is a necessary focus for all copyright-holders during the time of COVID-19-impacted education.

If you need help navigating these uncharted waters of copyright in the day of a pandemic, reach out and let’s talk.