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Obama tax break for working seniors taxable?
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Older Americans who recently received notice that a $250 check was forthcoming from the Obama administration may be surprised to find that it is taxable. The payment is part of the $787 billion economic stimulus law approved in February 2009.
Social Security beneficiaries who are still working may also qualify for the $400 Making Work Pay tax cut for the middle class. If so, they may find that this is taxable income. In an interview with the Washington Time (05/03/2009), Obama tax breaks may trip up seniors, Kevin Hassel, an economist with American Enterprise Institute said
This compliance headache that borders on being a nightmare. It's going to be complicated to reconcile these payments.
Recipients who are still employed for or part time may find that they will have to give some of that money back when they file tax returns in 2010. It seems that they cannot benefit from both the $250 and $400 tax cut and the surplus has to be sent back to the U.S. Treasury. The Obama administration didn't tell these people that they are no eligible for both payments. It turns out that they can only take advantage of $400 tax credit but not both benefits.
It seems normal for Obama and the Democrats in Congress to pass legislation without considering its aftermath. Seniors eligible for both benefits will probably have to spend it on tax preparers who will try to figure it all out.
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