Editorial Notes
References in TextSection 272(c) of the COVID-related Tax Relief Act of 2020, referred to in subsec. (f)(3)(A)(ii)(II), is section 272(c) of title II of div. N of Puspan. L. 116–260, which is set out as a note under this section.
The date of enactment of this section, referred to in subsec. (f)(5)(C) to (G), means the date of enactment of Puspan. L. 116–260, which was approved Dec. 27, 2020.
The Social Security Act, referred to in subsec. (f)(5)(C), (D), (H)(ii)(I), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Titles II and XVI of the Act are classified generally to subchapters II (§ 401 et seq.) and XVI (§ 1381 et seq.), respectively, of chapter 7 of Title 42, The Public Health and Welfare. Sections 202 and 223 of the Act are classified to sections 402 and 423, respectively, of Title 42. For complete classification of this Act to the Code, see section 1305 of Title 42 and Tables.
Section 212(a) of Public Law 93–66, referred to in subsec. (f)(5)(D)(i)(III), is section 212(a) of title II of Puspan. L. 93–66, July 9, 1973, 87 Stat. 155, which is set out as a note under section 1382 of Title 42.
The Railroad Retirement Act, referred to in subsec. (f)(5)(H)(ii)(II), probably means the Railroad Retirement Act of 1974, act Aug. 29, 1935, ch. 812, as amended generally by Puspan. L. 93–445, title I, § 101, Oct. 16, 1974, 88 Stat. 1305, which is classified generally to subchapter IV (§ 231 et seq.) of chapter 9 of Title 45, Railroads. For further details and complete classification of this Act to the Code, see Codification note set out preceding section 231 of Title 45, section 231t of Title 45, and Tables.
Statutory Notes and Related Subsidiaries
Treatment of United States PossessionsPuspan. L. 116–260, div. N, title II, § 272(c), Dec. 27, 2020, 134 Stat. 1971, provided that:“(1)Payments to possessions.—“(A)Mirror code possession.—The Secretary of the Treasury shall pay to each possession of the United States which has a mirror code tax system amounts equal to the loss (if any) to that possession by reason of the amendments made by this section [enacting this section and amending sections 6211 and 6213 of this title and section 1324 of Title 31, Money and Finance]. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession.
“(B)Other possessions.—The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits (if any) that would have been provided to residents of such possession by reason of the amendments made by this section if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply unless the respective possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to its residents.
“(2)Coordination with credit allowed against united states income taxes.—No credit shall be allowed against United States income taxes under section 6428A of the Internal Revenue Code of 1986 (as added by this section) to any person—“(A) to whom a credit is allowed against taxes imposed by the possession by reason of the amendments made by this section, or
“(B) who is eligible for a payment under a plan described in paragraph (1)(B).
“(3)Definitions and special rules.—“(A)Possession of the united states.—For purposes of this subsection, the term ‘possession of the United States’ includes the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands.
“(B)Mirror code tax system.—For purposes of this subsection, the term ‘mirror code tax system’ means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.
“(C)Treatment of payments.—For purposes of section 1324 of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (span)(2) of such section.”
Administrative ProvisionsPuspan. L. 116–260, div. N, title II, § 272(d), Dec. 27, 2020, 134 Stat. 1972, provided that:“(1)Exception from reduction or offset.—Any refund payable by reason of section 6428A(f) of the Internal Revenue Code of 1986 (as added by this section), or any such refund payable by reason of subsection (c) of this section [set out above], shall not be—“(A) subject to reduction or offset pursuant to section 3716 or 3720A of title 31, United States Code,
“(B) subject to reduction or offset pursuant to subsection (c), (d), (e), or (f) of section 6402 of the Internal Revenue Code of 1986, or
“(C) reduced or offset by other assessed Federal taxes that would otherwise be subject to levy or collection.
“(2)Assignment of benefits.—“(A)In general.—The right of any person to any applicable payment shall not be transferable or assignable, at law or in equity, and no applicable payment shall be subject to, execution, levy, attachment, garnishment, or other legal process, or the operation of any bankruptcy or insolvency law.
“(B)Encoding of payments.—In the case of an applicable payment described in subparagraph (E)(iii)(I) that is paid electronically by direct deposit through the Automated Clearing House (ACH) network, the Secretary of the Treasury (or the Secretary’s delegate) shall—“(i) issue the payment using a unique identifier that is reasonably sufficient to allow a financial institution to identify the payment as an applicable payment, and
“(ii) further encode the payment pursuant to the same specifications as required for a benefit payment defined in section 212.3 of title 31, Code of Federal Regulations.
“(C)Garnishment.—“(i)Encoded payments.—In the case of a garnishment order that applies to an account that has received an applicable payment that is encoded as provided in subparagraph (B), a financial institution shall follow the requirements and procedures set forth in part 212 of title 31, Code of Federal Regulations, except—“(I) notwithstanding section 212.4 of title 31, Code of Federal Regulations (and except as provided in subclause (II)), a financial institution shall not fail to follow the procedures of sections 212.5 and 212.6 of such title with respect to a garnishment order merely because such order has attached, or includes, a notice of right to garnish federal benefits issued by a State child support enforcement agency, and
“(II) a financial institution shall not, with regard to any applicable payment, be required to provide the notice referenced in sections 212.6 and 212.7 of title 31, Code of Federal Regulations.
“(ii)Other payments.—In the case of a garnishment order (other than an order that has been served by the United States) that has been received by a financial institution and that applies to an account into which an applicable payment that has not been encoded as provided in subparagraph (B) has been deposited electronically on any date during the lookback period or into which an applicable payment that has been deposited by check on any date in the lookback period, the financial institution, upon the request of the account holder, shall treat the amount of the funds in the account at the time of the request, up to the amount of the applicable payment (in addition to any amounts otherwise protected under part 212 of title 31, Code of Federal Regulations), as exempt from a garnishment order without requiring the consent of the party serving the garnishment order or the judgment creditor.
“(iii)Liability.—A financial institution that acts in good faith in reliance on clauses (i) or (ii) shall not be subject to liability or regulatory action under any Federal or State law, regulation, court or other order, or regulatory interpretation for actions concerning any applicable payments.
“(D)No reclamation rights.—This paragraph shall not alter the status of applicable payments as tax refunds or other nonbenefit payments for purpose of any reclamation rights of the Department of the Treasury or the Internal Revenue Service as per part 210 of title 31, Code of Federal Regulations.
“(E)Definitions.—For purposes of this paragraph—“(i)Account holder.—The term ‘account holder’ means a natural person whose name appears in a financial institution’s records as the direct or beneficial owner of an account.
“(ii)Account review.—The term ‘account review’ means the process of examining deposits in an account to determine if an applicable payment has been deposited into the account during the lookback period. The financial institution shall perform the account review following the procedures outlined in section 212.5 of title 31, Code of Federal Regulations and in accordance with the requirements of section 212.6 of title 31, Code of Federal Regulations.
“(iii)Applicable payment.—The term ‘applicable payment’ means—“(I) any advance refund amount paid pursuant to section 6428A(f) of Internal Revenue Code of 1986 (as added by this section),
“(II) any payment made by a possession of the United States with a mirror code tax system (as defined in subsection (c) of this section) pursuant to such subsection which corresponds to a payment described in subclause (I), and
“(III) any payment made by a possession of the United States without a mirror code tax system (as so defined) pursuant to subsection (c) of this section.
“(iv)Garnishment.—The term ‘garnishment’ means execution, levy, attachment, garnishment, or other legal process.
“(v)Garnishment order.—The term ‘garnishment order’ means a writ, order, notice, summons, judgment, levy, or similar written instruction issued by a court, a State or State agency, a municipality or municipal corporation, or a State child support enforcement agency, including a lien arising by operation of law for overdue child support or an order to freeze the assets in an account, to effect a garnishment against a debtor.
“(vi)Lookback period.—The term ‘lookback period’ means the two month period that begins on the date preceding the date of account review and ends on the corresponding date of the month two months earlier, or on the last date of the month two months earlier if the corresponding date does not exist.
“(3)Agency information sharing and assistance.—“(A)In general.—The Commissioner of Social Security, the Railroad Retirement Board, and the Secretary of Veterans Affairs shall each provide the Secretary of the Treasury (or the Secretary’s delegate) such information and assistance as the Secretary of the Treasury (or the Secretary’s delegate) may require for purposes of—“(i) making payments under section 6428A(f) of the Internal Revenue Code of 1986 to individuals described in paragraph (5)(A) thereof, or
“(ii) providing administrative assistance to a possession of the United States (as defined in subsection (c)(3)(A)[set out above]) to allow such possession to promptly distribute payments under subsection (c) to its residents.
“(B)Exchange of information with possessions.—Any information provided to the Secretary of the Treasury (or the Secretary’s delegate) pursuant to subparagraph (A)(ii) may be exchanged with a possession of the United States in accordance with the applicable tax coordination agreement for information exchange and administrative assistance that the Internal Revenue Service has agreed to with such possession.”
Public Awareness CampaignPuspan. L. 116–260, div. N, title II, § 272(e), Dec. 27, 2020, 134 Stat. 1975, provided that: “The Secretary of the Treasury (or the Secretary’s delegate) shall conduct a public awareness campaign, in coordination with the Commissioner of Social Security and the heads of other relevant Federal agencies, to provide information regarding the availability of the credit and rebate allowed under section 6428A of the Internal Revenue Code of 1986 (as added by this section), including information with respect to individuals who may not have filed a tax return for taxable year 2019.”
