IRS says stimulus checks belong to residents, not nursing homes

The IRS on Tuesday alerted nursing homes that coronavirus stimulus checks generally belong to residents and cannot be seized by these facilities.

The alert comes after state attorneys general have reported receiving complaints about nursing homes and assisted living facilities telling residents that they need to sign over their payments. Members of Congress have been urging federal agencies to ensure that facilities don't improperly confiscate residents' checks.

The direct payments are a key part of coronavirus relief legislation enacted in March. Most U.S. households are entitled to one-time payments of up to $1,200 per adult and $500 per child.

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The IRS said the payments are treated as tax refunds for benefits purposes, which means they don't count as income when determining eligibility for Medicaid. The agency said the payments are intended for residents even if a long-term care facility receives a resident's payment directly or indirectly.

The IRS also noted that the Social Security Administration (SSA) has issued guidance about how representative payees — people who manage Social Security and Supplemental Security Income benefits for beneficiaries who are incapable of doing so — should handle recipients' coronavirus checks.

The SSA said representative payees are not responsible for managing the checks. The agency said the representative payees should discuss the payments with the beneficiary, and provide them to the beneficiary if they want to use the payments independently.

If the beneficiary asks the representative payee for assistance relating to the stimulus payments, the representative payee can do so outside their formal role.

Last week, the Centers for Medicare and Medicaid Services warned nursing homes that they could be subject to federal enforcement actions if they confiscate residents' relief payments.