Retirees who get Social Security benefits have gotten, or will get, a one-time $250 payment in their January checks. The one-shot payment is to make up, in part, for the fact that federal, military Social Security retirees did not get a cost of living adjustment this month. We tipped you that was coming some time back, but when the dire prediction turned out to be true, it still came as a shock to many retirees who were counting on a COLA to help pay higher health insurance premiums.

Retirees got a 5.8 percent COLA last January. But because of the recession and deflation (as opposed to inflation) they didn't qualify for an inflation-catch-up this year.

To make up for that, the Obama administration and Congress okayed the one-time payment for retirees who get Social Security. (Several sharp-eyed readers point out that in fact the special payments and/or tax credits is in lieu of the $250 economic stimulus checks that were received by many people last year. It is not, they point out, to make up for the lack of a COLA. Congress is still considering that.)

But about half of all current federal retirees (those who left under the old Civil Service Retirement System) there was no payment because they never qualified for Social Security. For them the solution is a tax credit. Unlike the automatic one-shot payment to Social Security beneficiaries, those who don't get the payments have to go after their $250. And it will be in the form of a tax-credit, not a payment.

To qualify for the $250 tax credit (assuming you did NOT or will not get the payment in your January Social Security payment) you have to be pro-active. As in go after it. To do that you need to get an interestingly-named IRS form called "Making Work Pay and Government Retiree Credits". Fill it out and file it with your regular 1040A or 1040 or 1040NR form for the 2009 tax year.

To a lot of people a $250 payment isn't such a big deal.

But for many federal retirees it is.

One Florida based fed (Marc, you know who you are!) the payment in the Social Security check will be enough to cover higher health insurance premiums. Even a tax break as small as $250 will be welcomed by many.

Anyhow, it's out there. If you DID NOT get the one-shot $250 payment in this month's Social Security check you can apply for the tax credit. If you did get the payment, don't apply for a tax-credit too. Uncle Sam obviously has pots of money, but he frowns on that sort of double-dipping.

If you have a retired fed friend or relative, and they don't do computers, you might want to print and pass this information on to them. Some could really use the tax relief.

FederalNewsRadio editor Suzanne Kubota spotted the form and alerted yours truly. Hence I will get the glory (if any) but that's show biz. Anyhow we both hope it helps you if it applies to you.

To reach me: mcausey@federalnewsradio.com

Nearly Useless Factoid
by Suzanne Kubota

Bloomberg reports $192 million dollars worth of hummus was sold last year in the U.S, "according to PepsiCo Inc., the world's biggest snack maker." That's a whole lot of hummus among us.

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