That’s because they aren’t required to file tax returns, making it harder for the IRS to verify their income — or even to know who they are or where to find them.
“These folks are very disconnected from the tax system. It’s going to be very hard to get their payments out,” said Elaine Maag, a research associate in the Urban-Brookings Tax Policy Center.
People who have filed returns and others in government programs like Social Security will automatically receive the stimulus payments, which are worth up to $1,200 per person.
But this group includes many needy Americans, including some disabled people. It also includes anyone in the prison system. Some of them will be students who rely on student loans to support themselves, Maag said.
Pandemic shutdowns have limited access to tax filing help
Those people can still file a tax return to qualify for the new stimulus, but that may be challenging for those who haven’t filed in years — and who may not have access to in-person tax preparation services shuttered by local orders or even to the Internet with many libraries also closed.
And while the stimulus legislation ensures that the stimulus payment won’t be offset by any back taxes owed, some may fear that if they do file, it will be more likely that the IRS audits them in the future.
“This group is going to have to file, so it is key for the government to make it easy for them to do so and then to have very strong outreach to get the word out,” said Chuck Marr, senior director of federal tax policy at the Center on Budget and Policy Priorities.
Other groups are also left out
Some lawmakers have begun urging several government agencies to share information so that disabled people who receive Supplemental Security Income or low-income veterans who receive certain pensions and disability payments won’t have to also file a return to get the stimulus money. That would help out more than 3 million people, according to Marr.
In 2008, when the government issued similar stimulus payments, those who earned less than $3,000 did not qualify at all. The government later expanded Supplemental Nutrition Assistance Program (SNAP) benefits, which can more easily reach low-income families who are signed up for the program, to close that gap in assistance.
Some taxpayers just aren’t eligible for the stimulus payments at all. Individuals making more than $99,000 won’t receive anything, while married couples are phased out at $198,000 — unless they have children.