Paying Taxes on Welfare?

[ilovefh]

This is purely a curiosity question and not a debate about anything! It's not even based on anyone! I read a thread that made me curious.

For those in the know do you have to file taxes when you are on welfare? Let's say someone just gets welfare, no unemployment, just welfare do they file a tax return? Can they still get the child tax credit? Do they get a refund of anything?

This is not meant to slam anyone, just purely a curiosity question. I'm not looking for whether anything is right or wrong in anyone's opinion....just a fact based answer.

 

[Longsx3]

I doubt it, even unemployment does not count as income it is compensation and so you can not get earned income credit or anything like that.

 

[Reddy]

My boys get SSDI (not much per month & don't get every month) when oldest turns 18 youngest won't get again until he turns 18 (oldest check will be 3 times more than both boys - so sad)
anyways back to your question - we don't pay taxes on the SSDI but I did get unemplooyment this summer & will have to pay taxes on that

 

[Reddy]

I doubt it, even unemployment does not count as income it is compensation and so you can not get earned income credit or anything like that.

unemplyoment is taxable - it says so & they tell you several times when applying

 

[snarlingcoyote]

So on non-employment monies paid to a person for living expenses.

Unemployment - taxable
disability not paid thru SS - non-taxable
SSDI - non-taxable
Welfare - ???
Food Stamps - ???
Pensions - taxable
Survivor's Benefits on Pensions - ???
Social Security - taxable
SSDI payments to children under 18 - non-taxable

 

[Kathi OD]

unemplyoment is taxable - it says so & they tell you several times when applying

some states even withhold fed. income tax from your UE check

 

[tasha99]

I don't think people pay taxes on cash welfare. They wouldn't get the EIC for it, since it wasn't earned income (if that's the thread you're thinking of.)

No taxes on food stamps. To be eligible, you're pretty much in the no tax zone of poverty.

One interesting thing I saw as a legal secretary--in Oregon, Medicaid is not taxed, but they keep track and when a person dies, Medicaid repayment is one of the first claims paid on an estate. I saw an inheritance disappear since the person who died received Medicaid. The end of life expenses were so high that even selling the house left nothing after paying the state back. They go wayyy back too--some claims went back all the way to the 1980's.

 

[ohlas]

last time i looked you had to make "not given" from a job $400, but i could be wrong so dont yell at me..

 

[GAGirlInVA]

Not taxable.

People that only get cash assistance and food stamps, do not file taxes and do not get the child tax credit or earned income credit.

 

[Aimeedyan]

I doubt it, even unemployment does not count as income it is compensation and so you can not get earned income credit or anything like that.

Sadly, not true. My DH was on unemployment for a good stretch and was given the option of having the state withhold for him. He opted to not have them withhold, and didn't put anything away, and we were hit with a HEFTY tax bill come April.

 

[dreamin_disney]

i know 2 people a few years ago that were on welfare. They did have jobs just got welfare and food stamps. They got earned income credit. I was shocked because they got like $1000-$2500 . A co-woker and I were talking once and she said her cousin got the same She was shocked ! At that time I think I made 10,000 and I had to pay $200-$250. My co-worker is a teacher I think making $23,000 and she had to pay so we were just venting about it. Not sure how things are now

 

[need2cruise]

I have a family member who recieves SSDI and is taxed on it each year and owes every year.

I also have a friend who had SSDI on her child and she did not work and got a pretty hefty tax check back of over $2500.

Last time I claimed unemployment (8 yrs ago), it was taxed.

Welfare is not last I knew. There is a person dh knew who would only works 3-4 mths out of the year and lives on welfare. Only works to get the earned income for taxes and then back to being unemployed for the remainder of the mths. They have stated they don't want to lose their welfare so neither will get a job and they are having their 5th child. They have learned to work the system. Their tax return is $5-$7k each year. This year they are buying 2 used vehicles out of it.

 

[barkley]

So on non-employment monies paid to a person for living expenses.

Unemployment - taxable
disability not paid thru SS - non-taxable
SSDI - non-taxable
Welfare - ???
Food Stamps - ???
Pensions - taxable
Survivor's Benefits on Pensions - ???
Social Security - taxable
SSDI payments to children under 18 - non-taxable

ssdi-is federaly taxable (ssDi, not ssi). it depends on what other sources of income a person has as to how much of it gets taxed. given how long it can take to get an ssdi application approved, unless a person uses a cpa who knows the tax laws on spreading retro benefits over prior year's returns they can have a huge tax liability.

pensions-depends on the basis of the pension and the source. mine falls under a tax law that exempts it from taxation.

survivor benefits on pensions-more often than not are taxable.

welfare and foodstamps are not taxable.


here's the realy odd one-there's one type of pension through dh's old state employer that qualifies as "earned income" for eitc. i don't know that many people would ever qualify for that type of pension but apparantly if a person receives it prior to what is normaly the minimum retirement age for that state agency the feds consider it earned income so if they meet the income guidelines for eitc they can use it to qualify (see the strange stuff you learn if you actualy get bored enough to read those retirement mailers that get sent out once or twice a year).

i suspect allot more welfare clients will be filing income tax returns this year. one of the few sources of income that's not counted against their grants is temporary earnings from census work, but those temporary earnings can qualify them for the eitc. income tax refunds (at least when i worked in the field) are not counted against grants or foodstamps so it's like a bonanza of extra uncounted income (i remember in 1991 and 2001 the number of my clients reporting income tax refunds skyrocketed).

 

[KiKi Mouse]

Where I live everybody has to file. If you don't file you don't get rebates and tax credits. If you are on welfare and have kids you can do quite well for yourself.

Welfare--no tax
Child support--no tax
Employment Insurance--taxed

I know a person on welfare who has a bunch of kids by different fathers.
She gets welfare, child support from a couple of guys, a large child tax credit, tax rebate, and more.

In a month she gets about $2500 tax free and her rent is subsidized to $300/mth.

 

[ilovefh]

Thanks everyone! And I'm glad this thread didn't get ugly!

 

[Longsx3]

unemplyoment is taxable - it says so & they tell you several times when applying

It may be taxable depending on how much you get but you can not use it for income purposes it says that specifically when you file on Turbo Tax, a relative with one dependent received 14K in UE and had taxes withheld which she will get back had that 14K been on a W-2 as income from employment she would have also received earned income credit to the turn of $4500.