Name confusion could delay your tax rebate

PERSONAL FINANCE

August 19, 2008|By EILEEN AMBROSE

Didn't get your tax rebate yet? It could be your name.

That's what Kassandra Palazzo discovered.

Palazzo for seven years has filed a joint tax return with her husband, and the New York couple never had trouble getting their refunds. But when their economic stimulus check didn't arrive, they contacted the IRS. As it turns out, Palazzo used her married name on the tax return, but the name she has on file with Social Security is her maiden name. That caused the holdup on the rebate.

You can, of course, continue using your maiden name after marriage. But if you are going to go by your husband's name, you should notify Social Security. And you should be consistent on the name you use for official matters, or face all kinds of repercussions. A mismatch of a name and Social Security number, for example, can affect your Social Security benefits and prevent you from getting a driver's license.

Palazzo is worried about her rebate. "What can she do now to get it? she asks in an e-mail. "And also, why can't my husband and my two kids still be eligible?"

According to the IRS, the agency has the authority to correct mismatches between names and Social Security numbers when dealing with regular income taxes and tax refunds. That is probably why the Palazzos never had a problem getting their refunds.

But the law creating economic stimulus payments does not allow tax rebate checks to be issued when names on returns do not mesh with Social Security records. This is a fraud- protection measure. And if one name on the return is wrong, it will also affect the rebate of the other joint filer.

The Palazzos will not lose out on the rebate, but they will have to wait until the next tax season to get it. The 2008 tax return will have a line to claim the rebate for those who qualify but did not get it this year.

Kassandra Palazzo has two choices, says Jim Dupree, an IRS spokesman in Baltimore.

She can file a joint return with her husband, but use her maiden name so their return matches Social Security records, he says. Or, she can have her name changed on Social Security records and then file a joint return next year using her married name.

To change a name with Social Security, you will have to fill out a Form SS-5, an Application for a Social Security Card, says spokesman Mark Lassiter. You can download the form from the agency's Web site at www.ssa.gov, but you can't file for a name change online.

That is because Social Security needs to see original documents to verify your name change and your identity. If you have waited many years to set the record straight with Social Security, you will need your marriage document plus a birth certificate or some other identification that shows your maiden name and birth date, Lassiter says.

Social Security benefits are another reason you want to make sure that your name and Social Security number matches official records. Retirement benefits are tied to your earnings over the years. If you work under your married name but never told Social Security, your work record won't be accurate.

"We match up the name and number. If we can't match it up, we don't toss the earnings record away. We keep a record of that," Lassiter says.

Social Security can later correct your earnings record. But again, why go through that hassle? You're better off applying to change your name with Social Security at the start of your marriage.

After the Sept. 11 attacks, Congress passed legislation to assure the accuracy of drivers' licenses that are often used for identification.

To get a license, motor vehicle administrations typically verify names with Social Security numbers. If they don't match, you won't get a license. The law was passed in 2005, but the Maryland Motor Vehicle Administration has been matching names and numbers since 2003, says Caryn Coyle, a spokeswoman with the agency.

To suggest a topic, contact Eileen Ambrose at 410-332-6984 or eileen.ambrose@baltsun.com.

ONLINE

Find Eileen Ambrose's column archive at baltimoresun.com/ambrose

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