$250 stimulus check might be just a loan

http://columbusdispatch.com/live/content/local_news/stories/2009/05/28/social2.ART_ART_05-28-09_A1_VFE0FSE.html?sid=101

$250 stimulus check might be just a loan Payment to be recouped from workers on Social Security Thursday, May 28, 2009 3:35 AM By Doug Caruso The Columbus Dispatch Bill Martell works part time at the Dublin Community Recreation Center to supplement his Social Security, meaning he won't get to keep all his stimulus money. Bill and Charlotte Martell were still waiting last week for their $250 stimulus checks from the U.S. Social Security Administration. They know exactly what they'll do with the money: "I'm not going to do a damn thing with it except put it in the bank to pay it back," said Charlotte Martell. The couple considers the money a loan. Why? The Martells, like millions of other retirees who receive Social Security benefits, also work to help make ends meet. She works a few days a week as a bookkeeper for a Columbus law firm. He works about 25 hours a week as a trainer at the Dublin Community Recreation Center. Their paychecks make them eligible for another stimulus program: a $400-per-person tax credit called "Making Work Pay." They can't have both stimulus payments, so the government will require them to take the $250 Social Security payment out of their tax credit at tax-filing time. Confused? "This $250 will be a reduction to your Making Work Pay tax credit on your 2009 return," said Earl Goldhammer, a retired tax lawyer who volunteers as an advocate for the AARP's Ohio office. "If you're due a $400 credit, your net credit would only be $150. They don't want you to double up." The Social Security stimulus checks represent nearly $14 billion in the $787 billion economic-stimulus bill that President Barack Obama signed in February. About $528 million is on its way to Ohio's adult Social Security recipients. About 55 million Americans will receive the $250 checks, the Social Security Administration said. Many of them also work. About 13.7 million tax filers earned enough money to have their Social Security benefits taxed in 2006, the most recent year for which the IRS could provide figures. In Ohio, more than 2 million people will receive the checks, which will be mailed or directly deposited through June 4, according to the Social Security Administration. If the national numbers hold true in Ohio, as many as 500,000 people who work and receive Social Security benefits will have to give back the $250 at tax time. "The way I feel is: Why even send it out?" Mr. Martell said. "We're talking about a lot of money just to print the checks and send them out to us to collect them back in." The Social Security Administration expects to spend $60 million this year and $10 million next year to send the checks out, answer questions from recipients and pay other costs related to the program, said William Jarrett, a spokesman for the agency. He said Social Security does not keep track of the employment status of most recipients, so it would have been impossible to send the checks only to those who don't work. "They figured, rather than cull people out, they'd just settle it on the tax return," Goldhammer said. Each time that happens in Washington, the tax code becomes more complex. "It's getting so complex that the average person that files their own income tax gets confused and lost," said Bob Wilson, who supplements his pension and Social Security by working four hours a week as a bookkeeper for an insurance agency. He understands what's going on because of his job, he said. "I just have to make sure I still have it at the end of the year. I'll use it, but I'll have to put it back over a period of time." dcaruso@dispatch.com