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IRS Responds - Economic Impact Payments Do Not Belong to Nursing Homes or Care Facilities

Client Alert

In response to the concerns that some nursing homes and care facilities have been taking patients' economic impact payments (“EIP”) and claiming the EIP belongs to the facility, the IRS issued a reminder that the EIP does not belong to a nursing home or care facility even if that facility receives the individual’s payments, either directly or indirectly. The EIP does not count as income or a resource in determining an individual’s eligibility for Medicaid or other federal programs for a period of 12 months from when the EIP is received. What this means: an individual’s EIP does not have to be turned over by the benefit recipient.

To support the stance that the EIP do not count as income, the IRS stated that the EIP are considered an advance refund for an individual’s 2020 taxes. Therefore, it is considered a tax return for benefit purposes. Further, the IRS points to the instructions for Form 1040 which states, “any refund you receive can't be counted as income when determining if you or anyone else is eligible for benefits or assistance, or how much you or anyone else can receive, under any federal program or under any state or local program financed in whole or in part with federal funds. These programs include Temporary Assistance for Needy Families (TANF), Medicaid, Supplemental Security Income (SSI), and Supplemental Nutrition Assistance Program (formerly food stamps). In addition, when determining eligibility, the refund can't be counted as a resource for at least 12 months after you receive it.”

The Social Security Administration (“SSA”) released FAQs addressing exactly how the EIP should be handled. The SSA specifically states that the EIP belong to the beneficiary and are not a Social Security or SSI benefit. A representative payee is only responsible for managing Social Security or SSI benefits. Since an EIP is not a Social Security or SSI benefit, the representative payee should discuss the EIP with the beneficiary and allow the beneficiary to determine how it should be used. If the beneficiary determines he/she wants to use it independently, the representative payee should provide the EIP to the beneficiary. If the beneficiary asks the representative payee for assistance in how to use the EIP, the representative payee can provide that assistance outside of his/her representative payee role.

Although SSA does not have the authority to investigate or determine whether the EIP was misused, if SSA receives an allegation that the EIP was not used on behalf of the beneficiary, the SSA may decide to open an investigation into the possible misuse of the beneficiary’s Social Security or SSI benefit payments. The SSA may also remove the representative payee as no longer suitable and appoint a new representative payee.

If you need assistance in determining whether, as a representative payee, the beneficiary’s EIP was handled correctly or suspect that your loved one’s EIP was misused, please contact BMD Tax Law Attorney Tracy Albanese at tlalbanese@bmdllc.com or (330) 253-9195.


Valley National Bank/Trulieve Loan: A Big Step Out of the Shadows

In a late December press release, Trulieve announced that it had secured a $71.5 million commercial bank loan. In addition to the amount of the loan, which may be the largest commercial bank loan to date to a cannabis company, the release prominently identified Valley Bank and featured both a quote from Valley’s Senior Vice President, John Myers, and a description of the Bank’s service platform and commitment to the cannabis industry.

The End of Non-Competes? The Impact It Will Have on the Healthcare Industry

On January 5, 2023, the Federal Trade Commission (“FTC”) announced a proposed rule that, if enacted, will ban employers from entering into non-compete clauses with workers (the “Rule”), and the Rule would void existing non-compete agreements. In their Notice, the FTC stated that if the Rule were to go into effect, they estimate the overall earnings of employees in the United States could increase by $250 billion to $296 billion per year. The Rule would also require employers to rescind non-competes that they had already entered into with their workers. For purposes of the Rule, the FTC has defined “worker” to also include any employees, interns, volunteers, and contractors.”

2022 Healthcare Recap and 2023 Healthcare Check-Up

As the country begins to return to a new “normal” following the COVID-19 pandemic, there are many healthcare rules changing on both the federal and state levels as a result. Thus, it is important for healthcare providers and their employers to be aware of these changing rules, and any implications they may have on their practice. Look back on healthcare in 2022 and find a checklist for 2023.

Direct Support Professional Retention Payments

On December 15, the Ohio Senate and House passed House Bill 45, which authorizes the Department of Developmental Disabilities (DODD), in conjunction with the county boards of developmental disabilities, to launch their initiative to issue retention payments to Direct Support Professionals (DSPs). These retention payments will be distributed quarterly to participating home and community-based waiver providers to address the workforce crisis in the direct provider sector. Governor DeWine needs to sign the Bill to begin the payments, but he is expected to do so by the end of 2022.

Real Estate Investors Position for 2023 Opportunities

Real estate investors weathered another year in a post-pandemic world, with the year closing with yet another interest rate increase coupled with both uncertainty and heightened interest carrying into 2023. Just last Wednesday, the Federal Reserve raised its benchmark interest rate 0.50 percentage points, shifting the target range to 4.25% to 4.50%. The new level is the highest the fed funds rate has been since December 2007 and marks the seventh rate hike this year. So what does this mean to investors, brokers, lenders, and others in the real estate world? Read a few perspectives below from stakeholders familiar with our BMD clients and the markets in which they do business.