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Retired on SS and confused about amount of COVID return?

hal2kilo

Lifer
Feb 24, 2009
17,211
4,852
136
I finally, received my tax return and its short of what Turbo Tax said it would be. I wasn't expecting anything, but TTax says I was supposed to get COVID money which I was pretty sure I did not receive (cryptic notations in my paperless deposits). At one point, I either got a deposit or a check with a paper letter from the IRS last year, which I saved saying that I did not have to report it. It was $144.54. Well, it's seems this is really close, but not exactly the amount missing from my IRS return deposit.
Any ideas, same, different experiences? I tried to see if its possible to see IRS's paper work and all I could find is, you are supposed to get notified within 2 weeks if it's different from your expected return.
 

BoomerD

No Lifer
Feb 26, 2006
56,889
5,252
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I finally, received my tax return and its short of what Turbo Tax said it would be. I wasn't expecting anything, but TTax says I was supposed to get COVID money which I was pretty sure I did not receive (cryptic notations in my paperless deposits). At one point, I either got a deposit or a check with a paper letter from the IRS last year, which I saved saying that I did not have to report it. It was $144.54. Well, it's seems this is really close, but not exactly the amount missing from my IRS return deposit.
Any ideas, same, different experiences? I tried to see if its possible to see IRS's paper work and all I could find is, you are supposed to get notified within 2 weeks if it's different from your expected return.
I'm retired and collect SS.We got paper checks the first go-around...then direct deposit for the second and third.
 

hal2kilo

Lifer
Feb 24, 2009
17,211
4,852
136
I'm retired and collect SS.We got paper checks the first go-around...then direct deposit for the second and third.
Hey, boomer. I just found that IRS document. It's title was Your Second Economic Impact Payment and the actual amount deposited was 141.45 Direct. (Damn, I searched both my accounts for that credit and still did not find it) Another direct quote Your EIP2 isn't considered taxable income,...
When I add that amount with the amount I was supposed to get on my return it's $3.49 off. I guess I have to wait to see if I get an IRS letter explaining it.
 

hal2kilo

Lifer
Feb 24, 2009
17,211
4,852
136
Just forget about that EIP2 thing. Noted date on IRS letter, found the deposit, that's this year. So, I'm completely in the dark about the difference in my expected return. Like over $400.
Unfortunately, I made the mistake of reading this letter further, and it keeps using statements like, when you file you 2020 tax return.....
I give up.
 
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MtnMan

Diamond Member
Jul 27, 2004
5,957
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I collect SS, in addition to several pensions, and investment accounts.
All of mine have been direct deposit, all within the first week they were being sent out.
 

hal2kilo

Lifer
Feb 24, 2009
17,211
4,852
136
I collect SS, in addition to several pensions, and investment accounts.
All of mine have been direct deposit, all within the first week they were being sent out.
I guess I'm trying to figure out if I should talk to TTax (not sure if I really can, since I didn't pay xtra for it) or the IRS about the over $400 difference between the expected amount of return as filed.
 

hal2kilo

Lifer
Feb 24, 2009
17,211
4,852
136
Sent email to TTax's payment processor with subject Amount deposited not the same as filed with TurboTax
Amount was xxx short. Since this was direct deposited, will the IRS send me a letter with an explanation?

I hate chasing something that I didn't expect to get in the first place, but when things aren't right, they've got to be resolved.
 

Svnla

Lifer
Nov 10, 2003
17,916
1,362
126
Damn, some of you are old. :D

I just learned recently from another friend that would be retire shortly that if you have SS and then a pension from another job, your SS will be smaller than it should be. (windfall elimination provision) so folks with future pension payout and SS, you won't get all of your SS as you think you would.
 

Spacehead

Lifer
Jun 2, 2002
11,124
4,534
136
EIP 1 - max was $1200 sent out in the spring of 2020 (should've received Notice 1444 from the IRS)
EIP 2 - max was $600 sent out in Jan. 2021 (should've received Notice 1444-B from the IRS)
Both of these are going towards your 2020 taxes. See Form 1040 instructions for line 30
https://www.irs.gov/forms-instructions

EIP 3 - max was $1400 sent out around March 2021(should've received Notice 1444-C from the IRS)
Looks like this one will go with 2021 taxes
https://www.irs.gov/coronavirus/economic-impact-payments

I've only received Notice 1444-B so far but i read somewhere if you don't have them to just hang onto your bank statement showing you received them.
 

bbhaag

Diamond Member
Jul 2, 2011
5,624
1,006
126
Retired and receiving SS. Did Covid hit you real hard bro? That shits ridiculous......
 

Steltek

Platinum Member
Mar 29, 2001
2,816
594
136
Damn, some of you are old. :D

I just learned recently from another friend that would be retire shortly that if you have SS and then a pension from another job, your SS will be smaller than it should be. (windfall elimination provision) so folks with future pension payout and SS, you won't get all of your SS as you think you would.
The Windfall Elimination Provision only applies if you receive a federal, state, or local government pension from a job where you didn't pay social security taxes on your earnings while you were working. Employees in those types of jobs may have paid Medicare taxes, but not Social Security taxes. WEP can also apply for foreign pensions from countries that do not have a totalization agreement with the United States.
 
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pcgeek11

Lifer
Jun 12, 2005
18,130
2,032
126
Damn, some of you are old. :D

I just learned recently from another friend that would be retire shortly that if you have SS and then a pension from another job, your SS will be smaller than it should be. (windfall elimination provision) so folks with future pension payout and SS, you won't get all of your SS as you think you would.

That isn't true at all.

It depends on the pension source and if you are full retirement age or not.

If you are full retirement age you can make as much money as you desire with no SS Penalty.
 

Svnla

Lifer
Nov 10, 2003
17,916
1,362
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That isn't true at all.

It depends on the pension source and if you are full retirement age or not.

If you are full retirement age you can make as much money as you desire with no SS Penalty.
No, I don't mean you retire and get SS and then go back to work, not at all.

I mean you worked for a few years (job #1) and paid SS and then quit and then worked for a job for the state (job #2) in which you would get pension and pay no SS tax at all.

Then you retire and you would get a pension from job #2 plus SS for job #1 but your SS from job #1 will be less because of your pension.

Benefits Planner: Retirement | Windfall Elimination Provision (WEP) | SSA


The Windfall Elimination Provision only applies if you receive a federal, state, or local government pension from a job where you didn't pay social security taxes on your earnings while you were working. Employees in those types of jobs may have paid Medicare taxes, but not Social Security taxes.
True about no SS tax. What I am saying is instead of getting the 100% of SS from job #1, that person would get less and a lot of people with a pension from the local/county/state did not know that. That's how I understand from the link above from SSA.

For example: Billy worked for a company for 30 years, paid SS, retired at full eligible age and got 100% of his SS.

Bob worked for the same company with Billy (same time line) but only for 10 years then left and worked for the state for 20 years (no SS tax taken out) then retired and got a pension and SS (from job #1) but his SS would not be 100% as he thought it would be because of the pension.

.
 
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Steltek

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I guess I'm trying to figure out if I should talk to TTax (not sure if I really can, since I didn't pay xtra for it) or the IRS about the over $400 difference between the expected amount of return as filed.
When you filed your taxes, if you used the Turbotax Interview process (as opposed to just picking your own forms to fill out) there should have been a section of the interview walkthrough asking specifically whether you received the first and second EIP payments and exactly how much you received on each. If you still have access to the Turbotax account you used, you might go walk back through your tax return (I believe you can still view it) and make sure those questions were answered correctly.
 
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Steltek

Platinum Member
Mar 29, 2001
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No, I don't mean you retire and get SS and then go back to work, not at all.

I mean you worked for a few years (job #1) and paid SS and then quit and then worked for a job for the state (job #2) in which you would get pension and pay no SS at all.

Then you retire and you would get a pension from job #2 plus SS for job #1 but your SS from job #1 will be less because of your pension.

Benefits Planner: Retirement | Windfall Elimination Provision (WEP) | SSA




True. What I am saying is instead of getting the 100% of SS from job #1, that person would get less and a lot of people with a pension from the local/county/state did not know that. That's how I understand from the link above from SSA.

.
Your understanding is pretty much spot on for what you describe as your situation.

Social Security is based upon the lifetime cumulative earnings from every job you ever worked at where you paid Social Security taxes. Your benefit is computed as a "Primary Insurance Amount" (PIA for short) based on your highest 35 years of Social Security covered earnings. The PIA computation uses what are referred to as "bend points" in the computation process.

When the WEP offset applies, the offset changes the bend points (based upon the number of months of non-covered work from your State pension) resulting in a lower applicable PIA amount. The WEP computation also generally has zero earnings years for all the years you worked in the non-covered State job, so this hurts you as well because you end up having a significant number of zero earnings years in your highest 35 years of employment.

WEP (along with the associated Government Pension Offset - GPO - which you may yet run into in the future for spousal or survivor benefits) was one of the more miserable things to have to explain to folks.

I used to work for Social Security (actually retired from there in 2019), so I know a ton more about this stuff than the average person.
 
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pcgeek11

Lifer
Jun 12, 2005
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No, I don't mean you retire and get SS and then go back to work, not at all.

I mean you worked for a few years (job #1) and paid SS and then quit and then worked for a job for the state (job #2) in which you would get pension and pay no SS tax at all.

Then you retire and you would get a pension from job #2 plus SS for job #1 but your SS from job #1 will be less because of your pension.

Benefits Planner: Retirement | Windfall Elimination Provision (WEP) | SSA




True about no SS tax. What I am saying is instead of getting the 100% of SS from job #1, that person would get less and a lot of people with a pension from the local/county/state did not know that. That's how I understand from the link above from SSA.

For example: Billy worked for a company for 30 years, paid SS, retired at full eligible age and got 100% of his SS.

Bob worked for the same company with Billy (same time line) but only for 10 years then left and worked for the state for 20 years (no SS tax taken out) then retired and got a pension and SS (from job #1) but his SS would not be 100% as he thought it would be because of the pension.

.

Yes that is because he did not pay into the system for 20 years.

Also if you take SS at 62 or anything less than full retirement age there will be an offset if your income is more than a set limit. Something like -1 dollar for every 3 dollars over the limit.
 

Steltek

Platinum Member
Mar 29, 2001
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Yes that is because he did not pay into the system for 20 years.

Also if you take SS at 62 or anything less than full retirement age there will be an offset if your income is more than a set limit. Something like -1 dollar for every 3 dollars over the limit.
Total exemption from WEP requires 30 years of covered work under Social Security where you paid in at least 25% of the applicable maximum Social Security wages for each of those 30 years. A partial increasing exemption applies when the worker does this for between 20 and 29 years and has a pension that triggers WEP.

As far as the earnings test is concerned, the reduction is $1 for every $2 you earn over the applicable limit between the year you attain age 62 and the end of the year prior to the year you attain full retirement age. Then, for the year you attain your full retirement age, the offset is $1 for every $3 you earn over the limit for the part of the year you are under your full retirement age, with earnings potential being unlimited effective with the month you attain full retirement age and going forward.
 
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Svnla

Lifer
Nov 10, 2003
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Let me clarify a bit, when I say less I mean instead of ....let say $1000 a month for SS, you would only get ($1000 - offset amount).because you have a pension. I don't mean less as in less amount because you work only 10 years at a job instead of 30 years.
 

Steltek

Platinum Member
Mar 29, 2001
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Let me clarify a bit, when I say less I mean instead of ....let say $1000 a month for SS, you would only get $1000 - offset amount.because you have a pension.
Actually, it isn't computed that way for WEP cases (for GPO cases, yes, but for WEP no).

Your actual benefit amount is computed using a specific alternative formula applicable only to WEP situations which results in your benefit amount. There is no actual offset amount for WEP situations, just an alternate computation method mandated by law.

To presume an offset is to presume something was taken away from you, which it wasn't. You actually receive that benefit amount you receive because that is what the law says you are supposed to receive via its mandated alternative computation. Nothing more, nothing less.
 
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Svnla

Lifer
Nov 10, 2003
17,916
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Actually, it isn't computed that way for WEP cases (for GPO cases, yes, but for WEP no).

Your actual benefit amount is computed using a specific alternative formula applicable only to WEP situations which results in your benefit amount. There is no actual offset amount for WEP situations, just an alternate computation method mandated by law.

To presume an offset is to presume something was taken away from you, which it wasn't. You actually receive that benefit amount you receive because that is what the law says you are supposed to receive. Nothing more, nothing less.
Help me out here, from the link I posted above, Bob could get a maximum "deduction amount" of $498 because he worked less than..20 years in which SS taxes were taken out from what I read (last line, first column)? My head hurts from all the numbers.
 

Steltek

Platinum Member
Mar 29, 2001
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Help me out here, from the link I posted above, Bob could get a maximum "deduction amount" of $498 because he worked less than 10 years in which SS taxes were taken out from what I read? My head hurts from all the numbers.
I hate that particular informational booklet, because it makes the situation out to be something that it isn't.

It tries to relate a very complex computational topic as a simple "offset amount" (i.e. which is shown as what the person would have received if they didn't file for their non-covered pension minus what they actually received after the reduction for their noncovered pension). This leads a lot of folks to believing that an amount has been "taken away" from them that actually doesn't exist.

There isn't a table anywhere that you can reference that shows this hypothetical "offset amount" that would apply to you, because that "offset amount" simply doesn't exist. A table can't be created because the amount of the WEP reduction is unique to each and every individual person because the WEP law actually changes parts of the computation based on your unique circumstances that produces the benefit amount. It doesn't compute a benefit amount and reduce it, it straight out computes the WEP benefit amount.

If you ever want to know how much your benefit amount would have been without the WEP, call your local SSA office and they can figure it for you (tell them you want to know how much your benefit would have been as of the date you originally filed coming forward if you had never received a State pension). I wouldn't bother to call the SSA general 800 number, though, as the wait time wouldn't be worth the chance that the person who eventually answers your call is a moron or not (SSA's 800 number employs a lot of lazy, worthless morons, unless you get really lucky and happen to catch somebody from one of the payment centers catching SPIKE calls -- to put it bluntly, I used to and still do refer to SSA's general 800 number as 1-800-DIAL-AN-IDIOT with good reason).

Calling SSA (can't visit as offices have been closed for a year now) is truly the only way you would ever be able to determine how much your benefit would have been without the pension.

Personally, I never believed the WEP/GPO laws were fair. However, when you work for the government long enough, you eventually come to realize that the law is usually less about being "fair" and more about just being the law.

Also, looking over your posts, if you are researching how a future pension would affect your Social Security, the WEP offset does not apply until the first month you simultaneously receive Social Security payments and the non-covered pension payment. In this instance, the local SSA office (you'd need to speak to a claims specialist to project this for you -- well, I could have before I retired, anyway -- can't speak to the competency of your local office). They'd need to have an estimate of your gross future State pension amount, the projected date of your entitlement to the pension, and the projected number of months you would have worked to earn that pension amount to produce the numbers, though. And, keep in mind, the numbers they give you would only be the best estimate they can give you for planning purposes.
 
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Scarpozzi

Lifer
Jun 13, 2000
25,382
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I guess I'm trying to figure out if I should talk to TTax (not sure if I really can, since I didn't pay xtra for it) or the IRS about the over $400 difference between the expected amount of return as filed.
You should be able to print out the return from the TTax software so you have a hard copy of what was sent.

From there, you could contact the IRS via paper mail if you think they made a mistake. I'm sure they have a form for that. While you're at it though, I'd verify your AGI and all the numbers and make sure they didn't see something TTax didn't and correct it for you. I've never had that happen, so I'm not 100% sure. I just know the first step should be reviewing what was sent to them so you are certain all the t's were crossed and i's dotted.
 

brianmanahan

Lifer
Sep 2, 2006
21,193
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Personally, I never believed the WEP/GPO laws were fair. However, when you work for the government long enough, you eventually come to realize that the law is usually less about being "fair" and more about just being the law.
if the SS benefit formula had a linear relationship between earnings and payout they wouldn't need to do WEP

but SS's goal is to take into account total career earnings (including those outside SS jobs) and scale back payments the more money you make

this is so it can treat someone who only earned 500$k total over 35 years in a private sector job differently than someone who earned 100$k a year for 35 years (30 of it in a government job and 5 in a private sector job paying SS)
 

Steltek

Platinum Member
Mar 29, 2001
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if the SS benefit formula had a linear relationship between earnings and payout they wouldn't need to do WEP

but SS's goal is to take into account total career earnings (including those outside SS jobs) and scale back payments the more money you make

this is so it can treat someone who only earned 500$k total over 35 years in a private sector job differently than someone who earned 100$k a year for 35 years (30 of it in a government job and 5 in a private sector job paying SS)
Surprisingly, the reason for the existence of WEP is actually completely the opposite of what you are saying.

What a lot of people don't know about Social Security is that the benefit computation methods used are all tweaked towards favoring lower income workers. In other words, a low income worker literally gets more out of the Social Security system for each dollar of lifetime taxes paid into the system than do high income individuals. That is an absolute fact that you need to accept because it is true.

This is by design, as there is a presumption (which, fairly is mostly true) that the majority of lower income individuals will be more reliant on Social Security at retirement than would be higher income earners (who may have savings, investments, 401k, pensions, etc). The use of the "bend points" (there are three of them) within the computation to apply or remove this bias is what allows the agency to do this while using the same computation method for everybody.

Every person who works at least 10 years in jobs covered under Social Security has the possibility of becoming insured to receive benefit payments. The way the WEP law works is that it alters the bend points in the computation to remove the "bias" towards lower income workers for people who do not have 30 years of coverage under Social Security. It also applies a measure of "value" to work of recipients of noncovered pensions that isn't applied to any other class of worker in the Social Security system.

That was all background stuff. Here is why I don't agree with it.

Take your hypothetical 500k worker. He has a trophy wife, Bambi. Bambi goes to the spa and power shopping every day, and has really nice brunches with her fellow trophy wives. She does get the sporadic urge to work, but is usually doesn't last long before the urge leaves her (after all, her husband makes LOADS of money). So, she does it in spurts when getting the urge before quitting often. If she does this for 10 years or more, she could get insured for benefits. And, because she didn't work a lot, she is presumed by the design of the benefit computation to be a "low income worker" and thus receives the full effect of the inbuilt computational bias as such. Sure, she'll get spouse's benefits from her husband, but the spouse's benefits plus her own retirement would be more than what she would have gotten just as a spouse had she never worked on her own due to the way that separate computation works.

Or, look at another situation which is very common. I have relatives that are lazy. Pure and simple. They'll get a job, then when it interferes with their welfare, Medicaid, and food stamp benefits, they'll quit on the spot. Or, they'll quit or be fired because their employer had the temerity, "gasp" to force them actually show up for work on time when scheduled. When they can't pay their bills, they sponge off their 76 year old grandmother. My lazy cousins, when they work enough (and they will, as it isn't very hard to get 40 quarters of coverage under Social Security), will qualify for Social Security. And, they'll be classed as low income by the computation because they are. However, they are low income by choice and not because they didn't have opportunities like lots of other people are denied.

Now, look at the government worker with the non-covered pension. He might have worked 10 or more years under Social Security prior to getting his government job. He also might have worked a side job on weekends or at night to get those 40 quarters of coverage. He also is classed as a lower income worker by the computation when he is not. However, the WEP law treats him differently by saying his work doesn't have the same quantified worth to the Social Security system that Bambi's or my cousin's work does. Not only that, the WEP law further assigns a literal value on his work under Social Security that isn't applied to Bambi or my cousins. The law basically says that, unless he works 30 years in Social Security covered employment where he earns 25% or more of the maximum taxable Social Security base wage for that year, his benefits are subject to offset (with a partial exemption for qualifying years of coverage between 20 and 29). So, his work is literally treated as second class in comparison to the work of Bambi or my cousins.

And, while Bambi (and my cousins, whose wives don't work much because, like, its a "thing" according to one of them) will get full a full combination spouse+retirement benefit, the government worker's wife will likely get little of nothing while he is alive due to the reduced benefit amount and the associated GPO (government pension offset) law.

Say what you will, but WEP (and even worse, the GPO) are both just disguised cost cutting measures meant to penalize one very specific group of people under color of law for doing the exact same thing as other people freely are allowed to do with no penalty.

As I before stated, there is no fairness within the law. To slightly quote actor John de Lancie, "it will be most unfair" to all but the chosen few.
 
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