His mother is currently on social security disability, and she is worried that if the check is cashed in her name, it will effect her medicare benefits. She fell in a school and is now receiving a settlement payment for her injury. I’m not sure if this is a good idea, since I fear he may have to pay taxes on the sum if it is cashed in his name. She is telling him that the settlement is “tax-free”, but I don’t believe it.
My boyfriend’s mother wants him to cash a settlement check in his name, not hers. Is this a good idea?
27
May
PJ
May 27, 2010 at 8:09 am
The settlement is tax free. Tell her to cash her own check. It will not affect her SS disability.
Ralph N
May 27, 2010 at 8:37 am
this type of payment will not effect her ss disability and is tax free. she will have no problem cashing it.
Clovers
May 27, 2010 at 8:49 am
They’re right! The fact that this check is not a consistent form of income it will not effect her disability. She should have no problem cashing the check herself.
Jss
May 27, 2010 at 8:55 am
Settlement payment for personal injury is not taxable. Read about settlement taxes http://taxipay.blogspot.com/2008/08/us-income-tax-topics-1.html
chatsplas
May 27, 2010 at 9:15 am
Tell him to avoid it. . . .sounds like FRAUD. . .if it’s tax-free then she can cash it. . . .and check is made out to her anyway, no matter who cashes it. . . .and if she gets other income, why shouldn’t her benefits be affected. . . .lots of possible fraud going on here….tell him to stay clear of it. . .even if it is his mother. . . .
Personal injury settlements are not taxable income to recipient for income tax, but not sure of SS or SSI guidelines, qualifications
Judy
May 27, 2010 at 9:43 am
He can’t cash the check “in his name” – if her name is on the check, then it’s her settlement, not his.
If she is receiving payments in the settlement for the same bills that medicare also paid, then yes she’ll have to pay something back, she doesn’t get to double-dip.
travelguruette
May 27, 2010 at 10:36 am
Is it taxable? Is it pain and suffering? Medical? Punitive? If it is taxable and it is in his name then he is stuck with the taxes.