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1 1 (August 19, 2020)

handle is hein.crs/govdbke0001 and id is 1 raw text is: Researh Sevice CARES Act Economic Impact Payments for Veterans Not Required to File Tax Returns Updated August 19, 2020 Overview The Veterans Benefits Administration (VBA), within the Department of Veterans Affairs (VA), offers two cash benefit programs for disabled or low-income veterans and their dependents: disability compensation and pension. The monetary benefits provided by both of these programs are not counted as income for tax purposes and hence are not subJect to the federal income tax. As a result, some VA beneficiaries are not required to file federal income tax returns because their income for tax purposes is below the minimum filing threshold. These veterans and their beneficiaries generally qualify for the Economic Impact Payments (EIPs) provided in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136), but their lack of an income tax return has raised complications for the Internal Revenue Service (IRS) in determining how to distribute these payments. (The IRS refers to the direct payments enacted under the CARES Act and issued in 2020 as economic impact payments. The statute refers to them as 2020 recovery rebates. Some media reports call them stinulus payments.) Some have questioned how EIPs will impact veterans and survivors receiving disability compensation or a VA pension. The disability compensation and pension programs differ in terms of eligibility and how the benefit amounts are determined. Veterans are eligible for disability compensation without consideration of their income or net worth, and the amount of disability compensation paid is based on a veteran's disability rating percentage. The pension is a means-based benefit, meaning there is an income and net worth limit to qualify, and the amount of a veteran's and/or their spouse's income can reduce the amount of the monthly pension benefit. Many veterans have expressed concern that receipt of the EIP will result in them either losing their pension benefit or having it reduced. IRS and VA Agreement for Non-Filers On April 17, 2020, the IRS and VA announced that low-income veterans and survivors who are not required to file a tax return will not have to manually provide information to the IRS in order to receive the EIP. The IRS announced that, while the timing of payments is still a work in progress, those veterans and beneficiaries who receive Compensation and Pension benefit payments from VA will receive a $1,200 Economic Impact Payment with no further action needed on their part. Congressional Research Service https://crsreports.congress.gov IN11375 CRS NStGHT Prepaimed for Mernbei-s and Committees 4 o. C- --q .. . . . . . . . ...-----------------------------------------------------------------------------------------------------------------------------------------------------------------------

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