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Will Income Tax Refunds Impact SSI?

Most people think of an income tax refund as a good thing. But if you are an individual who receives, and relies on, monthly Supplemental Security Insurance (SSI) payments, then receiving an income tax refund may cause some concern.

Since receiving SSI depends on your resources and income, any additional assets or income that come into your possession may impact your eligibility to receive monthly payments.

Resources include assets like cash, real estate, bank accounts, stocks and bonds. In order to qualify for SSI, your resources cannot be worth more than $2,000 for an individual, and $3,000 for a couple.

For purposes of determining SSI benefits, income you receive reduces your benefit. For example, income is money you receive like wages or income can be in the form of food and/or shelter that is provided to you. If you have too much income, then you may not receive any SSI benefits. The rules are complicated and there are exceptions that may apply.

Despite the income and resource rules, Social Security

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does not count everything you own. According to SSI rules and regulations, any amount of money refunded on income taxes already paid is not income. Furthermore, income tax refunds are not considered income, regardless of whether the income from which the tax was withheld or paid was received in a period prior to application for SSI benefits.

With regard to an SSI recipient’s resources, the “Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010,” excludes all Federal tax refunds and advanced credits from resource counting for a period of 12-months when determinig eligibility for SSI benefits. This 12-month period begins the month after the month the recipient receives the refund or payment.

This means that if you are an SSI recipient who received an income tax refund on income taxes you have already paid, then don’t worry. The refund is not considered income and will not count as a resource for a period of 12-months. Hence, you have 12 months to spend the refund or to make sure that the amount does not increase your resources over $2,000 after the 12th month.

By Eric J. Einhart, Esq. – Guest Blogger

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