The Coronavirus Aid, Relief, and Economic Security Act (or CARES Act) entitles most Americans to stimulus checks valued at up to $1,200 per adult and $500 per dependent. Social Security beneficiaries are among those eligible for a check if their income doesn't exceed the limits for receiving one.

If you're one of the many Social Security recipients who has received a payment, or who is expecting one, there are a few key things to know to ensure you get the full amount of money and to understand what the payment means for your finances.

1. The money doesn't count as income for tax calculations or benefits eligibility

A payment of $1,200 means a significant increase in income for some retirees, as the average Social Security retirement benefit is just $1,503 per month in 2020.

When you see this cash hit your bank account, you may be concerned it could affect your tax bill, particularly if you're on the cusp of having some of your Social Security benefit subject to income tax.

Up to 50% of your Social Security benefit could be taxed by the IRS if your income exceeds $25,000 for single filers and $32,000 for married couples filing jointly. And up to 85% of benefits could be taxable with an income above $34,000 for singles and $44,000 for joint filers.

But for purposes of determining if your retirement benefit is taxable, only some income counts. That includes half of your Social Security payment, other taxable income, and some nontaxable income such as muni bond interest.

The stimulus money isn't counted for this calculation, so it will have no effect on whether you have to pay tax on Social Security. Not only that, but you also won't be subject to federal tax or state tax on the stimulus payment.

For those receiving means-tested Supplemental Security Income (SSI), the stimulus payment also won't affect your benefits eligibility since it will not count as income. And it will not be factored into financial resources calculations for 12 months.

2. You may need to take action to get your stimulus payment if you just started your benefits

Most Social Security beneficiaries will get their payments automatically via mail or direct deposit. The IRS can get your information from your 2018 or 2019 tax returns or from your Social Security earnings statements.

But if you didn't file a tax return in either 2018 or 2019 and you just started receiving Social Security benefits in 2020, the Social Security Administration won't be able to provide the necessary information to the IRS.

You'll need to either submit a return for last year or complete a simple online form for nonfilers. Using this form, you can provide the info the IRS needs to determine eligibility for the payment and let it know where to send your check.

3. You could get more money by submitting a 2020 tax return if the IRS didn't know about your dependents

If the IRS gets your information from Social Security, rather than from tax returns, it won't know about any dependents you may be entitled to claim. You get an additional $500 for each eligible dependent under the age of 17, money you'll miss out on if you have a dependent the IRS isn't aware of. It's relatively rare for someone receiving Social Security retirement benefits to have a dependent child under 17, but many children live with grandparents who are then able to claim the child for stimulus payment purposes.

The IRS has already processed, or begun processing, payments for most recipients of Social Security retirement benefits. If your payment has already been processed or sent, it's too late to update the IRS about your dependents now. But you can still get the extra money due for your dependents if you file a tax return for 2020.

For SSI recipients, the deadline for updating the IRS about your dependents is May 5, so you'll need to act quickly and use the form for nonfilers. If you miss the deadline, you'll also be able to get the money by filing a tax return for this year.

Maximize your benefits

Understanding how stimulus payments work will help you maximize your benefits. You can also use the money to spend, save, or invest without having to worry about any tax implications or effects on future benefit eligibility.

The money is meant to help you during these troubled times, so make sure you get what you deserve.

This article originally appeared in the Motley Fool. The Motley Fool has a disclosure policy.

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