Identification Number:
EM-21058 REV 2
Intended Audience:All RCs/ARCs/ADs/FOs/TSCs/PSCs/OCO/OCO-CSTs
Originating Office:DCO OPSOS
Title:Educating the Public About the Impact of Child Tax Credit, Earned Income Tax Credit, and Economic Impact Payment (EIP)
Type:EM - Emergency Messages
Program:Title XVI (SSI)
Link To Reference:See References at the end of this EM.
 

Retention Date: November 25, 2022

Summary of Changes:

This EM replaces a prior version issued on 02/08/2022 and provides updated information about several IRS initiatives.

Section A: Added information about the third EIP payment and clarified language.

Section B: Added information about how the public can file for CTC and missing third EIPs.

Section D: New section that provides reminders about EIPs.

Section E: Moved content from section C and added language to clarify instructions.


A. Purpose
This EM provides background to technicians about several Internal Revenue Service (IRS) initiatives that may still be available to SSI applicants and recipients, including the Child Tax Credit (CTC), advance payments of the CTC, the Earned Income Tax Credit (EITC), and the third Economic Impact Payment (EIP). While many have already received payments through these initiatives, some people may still need to take action in order to receive them. Technicians should use this EM to support discussions about the impact of Federal tax credits on Supplemental Security Income (SSI).


Technicians are instructed to discuss the impact of Federal assistance and provide information about how to claim it during contacts with SSI applicants and recipients who have a child or children. In particular, technicians should discuss:

      1. advance payments of the CTC received during 2021;
      2. the remaining CTC, claimed on a 2021 Federal income tax return;

      3. EITC, also claimed on a 2021 Federal income tax return; and
      4. the third EIP, also claimed on a 2021 Federal income tax return.

B. Background
The American Rescue Plan Act of 2021 (ARPA) made several significant changes to the CTC for tax year 2021 only. In particular, ARPA directed the IRS to disburse half of an eligible taxpayer’s estimated CTC by way of advance payments from July through December 2021. For those who received payments, the remainder of the CTC is claimed when they file their Federal income tax returns this year.
Individuals and families are eligible for the CTC if they had a qualifying child, or children, in 2021. Also, an individual (or their spouse, if they filed a joint return) must have had a main home in one of the 50 States or the District of Columbia for more than half the year to qualify for the fully refundable credit.

For those who received advance CTC payments in 2021, to claim the second half of the 2021 CTC for which they are eligible, they must file a 2021 tax return in 2022. For those who did not receive payments during 2021, they can claim the entire 2021 CTC for which they are eligible – as well as other tax credits – by filing a 2021 Federal income tax return in 2022.


Individuals and families who did not file a 2021 tax return by the April 18, 2022 deadline, and who meet certain criteria, may be able to submit a simplified tax return online Get CTC website, May 11, 2022 - October 15, 2022, to claim the CTC and/or missing third EIP. The simplified tax filing tool cannot be used to claim the EITC or earlier EIPs.

ARPA also made some changes to the EITC. The EITC helps low- to moderate-income workers and families, including those who have qualifying children and those who do not, get a tax break. Eligibility for, and the amount of, the EITC are based on various factors including family size, filing status, and income.
NOTE: ARPA did not create an advance payment of the EITC. Therefore, individuals and families can only receive the 2021 EITC by filing a 2021 Federal income tax return in 2022 and claiming the credit.

C. Explaining the Impact of Advance CTC Payments, the Remaining CTC, and the
EITC on Supplemental Security Income (SSI) Benefits

SSI recipients may not be aware that receiving
    · advance CTC payments, the remaining CTC, or the EITC does not affect their eligibility for SSI, unless they retain those funds for longer than 12 months.

    · Advance CTC payments, the remaining CTC, and the EITC are excluded from income and resources for up to 12 months under normal policy, as explained in EM-20014 REV 5 Section C.2. Per SI 00830.060 and SI 01130.676:
        · Exclude advance CTC payments, the remaining CTC, and the EITC from income for the month of receipt (taking into account that advance CTC payments were disbursed monthly during 2021, while the remaining CTC and the EITC are received only through a refund of a 2021 Federal income tax return); and
        · Exclude advance CTC payments, the remaining CTC, and the EITC from resources for up to 12 months beginning with the month following the month of receipt.

D. Explaining the Impact of EIPs on SSI Benefits

EIPs were issued three times during the COVID-19 public health emergency. EIPs do not count as income when received and will not be do not counted against SSI applicants or recipients’ resource limits no matter how long they keep those funds. Some individuals who did not receive the third EIP may still be able to claim it using the IRS’s simplified filing tool discussed below in section E.


E. Instructions for providing SSI applicants and recipients with information about
claiming Advance CTC Payments, EITC, the Remaining CTC, and third EIPs

If, while taking an application for SSI benefits or interacting with SSI recipients, you discover the member of the public has a child or children, even if that child is over age 18 and independent, or may benefit from CTC or EITC, you will:
    1. Share that they can file a 2021 tax return to claim the full 2021 CTC or EITC, or the remainder of the 2021 CTC if they already received one or more advance CTC payments in 2021, as well as any other tax credits they may be eligible for, such as EITC.
      2. Share that if they were not required to file a tax return and did not file by the deadline, they can use the simplified tax filing tool to claim the full 2021 CTC or missing third EIP.
        Note: They cannot use the simplified filing tool to claim the EITC or the first or second rounds of EIP.
      3. Explain that none of (1) monthly advance CTC payments, (2) the remaining CTC, or (3) the EITC affect a recipient’s SSI benefit unless the funds are held beyond 12 months.

      4. If they ask for information on CTC, direct them to the child tax credit website.
        5. If they ask for information on EITC, direct them to the IRS Earned Income Tax Credit site and child tax credit website.

      NOTE: SSA does not provide tax advice. Technicians should not attempt to answer tax questions.


      Direct all program-related and technical questions to your Regional Office (RO) support staff or Program Service Center (PSC) Operations Analysis (OA) staff. RO support staff or PSC OA staff may refer questions, concerns or problems to their Central Office contacts.

      References:
      SI 00830.060 Federal Tax Refunds and Advanced Tax Credits for SSI Income Purposes
      SI 01130.676 Federal Tax Refunds and Advanced Tax Credits for SSI Resources
      EM-20014 REV 4 Effect of COVID-19-Related Financial Assistance on SSI Income and Resources
      EM-21050 REV 3 Special Processing Instructions Applying SSI Income and Resource Exclusions to Pandemic-related Disaster Assistance



      EM-21058 REV 2 - Educating the Public About the Impact of Child Tax Credit, Earned Income Tax Credit, and Economic Impact Payment (EIP) - 5/25/2022