2008
Economic Stimulus Payment (Tax Rebate Checks) FAQs
What
is the Stimulus Payment?
The Stimulus
Payment, also known as the Economic Stimulus Payment or Rebate,
is a refundable rebate credit for eligible individuals. The
rebate credit will be sent to eligible taxpayers beginning
in May of 2008 and will be based on their 2007 tax return.
How much will I
get? And what are the "cutoff" income limits?
Most taxpayers will get the maximum amount of $600 ($1,200
for those who file a joint return). The minimum payment is
$300 ($600 for those who file a joint return). There is an
additional $300 for each child on the tax return that has
a Social Security number and is a qualifying child for the
Child Tax Credit. The payment is limited to a maximum of $600
($1,200 if filing a joint return) or the total tax liability
on the return, whichever is less.
The payment is subject to
maximum income limits and will be reduced by 5% of the amount
of income in excess of $75,000 ($150,000 if filing a joint
return). If your income is less than $3,000 and you have other
qualifying stimulus income, you will receive the minimum payment
of $300 ($600 if you are filing jointly). If you devide 600
by 5%, you'll find that the "phase out range" for individual
is 12,000. So the hard "cutoff" income limit for individuals
should be 87,000. Similarly, the cutoff income for MFJ couples
are 174,000.
For the estimated
figure of your rebate check, use IRS's Economic
Stimulus Payment Calculator.
If your qualifying income
is below $3,000 you are not eligible for the Stimulus Payment.
How do I get my
check?
Most taxpayers need to do nothing other than file their 2007
tax return as they normally would. The IRS will determine
individual eligibility and the amount of your rebate check
based on your 2007 tax return. Your payment will be issued
to you by the IRS in the same manner your refund check was
issued. If you would like to receive your check by direct
deposit, you can request this on your tax return. If you received
a bank product such as a Refund Anticipation Loan from your
tax preparation firm, the IRS will mail a check to the address
on your tax return. If you have moved and will receive your
Stimulus Payment check in the mail, make sure you file Form
8822, Change of Address, with the IRS and submit a change
of address with the U.S. Post Office.
When will I get
my check?
The IRS will begin mailing on May 2. The date you receive
your payment depends on the following:
- When your return is/was
received and processed by the IRS;
- The last two digits of
the primary SSN; and
- Whether the payment is
being mailed or deposited into your bank account.
The IRS has released the
following payment schedule for returns received and processed
by April 15, 2008:
• Direct Deposit Payments
Last
two digits of the Primary SSN: |
Date
payment should be sent to your bank account: |
00 - 20
|
May 2 |
21 – 75 |
May 9 |
76 - 99 |
May 16
|
• Paper Check
Last
two digits of the Primary SSN: |
Date
payment should be mailed: |
00 - 09 |
May 16
|
10 – 18
|
May 23
|
19 - 25
|
May 30 |
26 - 38 |
June 6 |
39 – 51
|
June 13 |
52 – 63 |
June 20 |
64 – 75
|
June 27 |
76 – 87 |
July 4 |
88 – 99
|
July 11 |
A small percentage of tax
returns will require additional time to process and to compute
a stimulus payment amount. For these returns, stimulus payments
may not be issued in accordance with the schedule above, even
if the tax return was processed by April 15. If you file your
tax return after April 15 the IRS will continue to make weekly
payments through the end of December. To ensure you receive
your stimulus payment this year, you must file a tax return
by Oct. 15.
When will I receive
a rebate check if I filed my tax return after April 15?
If you file your return after April 15, 2008, you should receive
your rebate check about two weeks after you receive your refund
check.
What is the latest
I can file a tax return and still receive a rebate check?
Taxpayers should file a tax return by October 15,
2008 to ensure they will receive their rebate check.
Who is eligible?
To receive an economic Stimulus Payment individuals must:
. Have qualifying income of greater than $3,000, and . Have
a Social Security number, and . Not qualify as a dependent
of another taxpayer
What is qualifying
income?
Qualifying income for the economic Stimulus Payment is: .
Earned income such as wages and net self-employment . Social
Security benefits . Social Security equivalent Tier I Railroad
Retirement benefits . Veteran’s disability compensation, pension,
or survivors’ benefits received from the Department of Veteran’s
Affairs . Combat pay if elect to include in earned income
What income does
not qualify? There are many types of income that
do not qualify for the Economic Stimulus Payment, including:
. Supplemental Security Income (SSI) . Investment income such
as; dividends, interest, and capital gains . Non-veterans
or non-Social Security pensions such as normal retirement
distributions, IRA distributions, and non-Social Security
equivalent Railroad Retirement payments . Unemployment compensation
. Lottery or gambling winnings
What is Supplemental
Security Income (SSI)? Supplemental Security Income
is a program administered by the Social Security Administration
and financed by general funds from the U.S. Treasury. Qualified
individuals must be disabled, blind, or at least 65 years
old and have limited income and resources. SSI is not based
on prior work or a family member’s prior work like Social
Security Benefits.
What if I don’t
have to file a tax return?
You must file a tax return to qualify for and receive your
Stimulus Payment check, if you are not required to file a
tax return because your income is below the minimum filing
requirements or your only income is from a VA disability or
Social Security, you should file a return to report your payments
and eligibility. The IRS has emphasized that individuals with
no filing requirements will not get a tax bill. The tax return
is being used to qualify for and issue the Stimulus Payments.
What if I already
filed my tax return and my qualified income is too low?
If you received qualified income that is not normally reported
on your tax return, such as Social Security benefits or qualifying
benefits from the Department of Veteran’s Affairs, you should
file Form 1040X and report the non-taxable benefits and the
amounts that you received.
How do I report
qualifying benefits?
If you have qualifying benefits such as Social Security, Railroad
Retirement, or qualifying VA benefits, report them on Form
1040, line 20A or Form 1040A, Line 14A. The IRS will not recognize
the qualifying Social Security, Railroad Retirement, or VA
benefits if they are not reported on the appropriate line.
How do I find out
the amount of my qualifying income if I don’t receive an annual
statement?
If you do not receive a Form 1099 reporting your benefits,
you may estimate the total received by taking your monthly
benefit amount and multiplying it by the number of months
you received it during 2007. For example: John is a totally
disabled veteran whose only income is a veteran’s disability
pension and Social Security benefits. John does not know what
his annual income is from either source. He does know that
he received $600 a month from the VA and $1,000 a month from
Social Security and he received both benefits for the entire
year. Since John does not have to file a tax return normally,
multiply his monthly income ($600 + $1,000) by the total months
he received it (12). John received $19,200 in benefits last
year. Report the $19,200 on Form 1040A, Line 14A or Form 1040,
Line 20A.
Is there anything
else I need to know?
Yes, the IRS will send two informational notices concerning
the Economic Stimulus Payments. The first notice will explain
the stimulus payment program. The second notice will confirm
the taxpayer’s eligibility, payment amount, and the approximate
time table for the payment. Taxpayers should save the second
notice for their 2008 tax records.
Who do I contact
if I have additional questions? More
information on IRS e-file can also be found at www.irs.gov/efile.
What happens to
my 2008 tax return if I didn’t qualify for the 2008 rebate
check?
The Stimulus Payment will be a credit on the 2008 tax return.
Those taxpayers that did not qualify to receive the 2008 rebate
check may be eligible for the rebate credit when they file
their 2008 tax return.
What happens to
my 2008 tax return if I do receive a 2008 rebate check?
If you received all of the allowed rebate in your 2008 rebate
check, there will be no affect to your 2008 tax return. If
you received more rebate than the allowed rebate when filing
your 2008 tax return, there will be no affect. If you received
less rebate than the allowed rebate when filing your 2008
tax return, you will be eligible for the rebate credit of
the difference.
Why is the statement
"Stimulus Payment" across the top of my tax return?
The IRS has requested the statement "Stimulus Payment" be
printed across the top of all tax returns filed by those individuals
who would otherwise not be required to file a tax return.
This will help speed up the processing of these returns for
their rebate check disbursement.
If all of my income
was tax free in 2007 because I was in a combat zone for the
year, will I qualify for a rebate check?
Combat pay is considered qualifying income for the stimulus
payment. You must file a tax return to receive your check.
Please make sure you include all of your dependent children
under age 17 on your stimulus payment return. You will not
have to pay any taxes on your return and you must write “Stimulus
Payment” across the top of your return.
Will taxpayers who
are otherwise not required to file have to repay the money
received from the rebate check on a 2008 tax return?
Individuals that receive a stimulus check this year will not
be required to repay the stimulus payment on a future tax
return. If the taxpayer correctly filed their 2007 tax return
and they received a stimulus payment greater than the actual
computation of the credit on their 2008 tax return, there
will be no penalty and they do not have to repay the extra
payment received. If the taxpayer was not otherwise required
to file a tax return for 2007, and filed one for the stimulus
payment, they will not have to pay taxes on or claim as income,
the stimulus payment received.
If I was already
claimed as a dependent on my parent’s tax return, will I receive
a stimulus payment based on my own tax return?
An individual that is can be claimed as a dependent on another
return does not qualify for the rebate. If the individual
claims the personal exemption for themselves on their 2008
tax return and otherwise qualifies, they will receive a refundable
rebate credit.
Does a deceased
taxpayer qualify for the stimulus payment?
If the deceased taxpayer qualifies for the stimulus payment,
their estate will receive the stimulus payment. If the final
return was married filing jointly and there is no other appointed
representative for the deceased taxpayer, the surviving spouse
will receive the stimulus payment.
What do I do if
I receive a Stimulus Payment Package from the IRS and I have
already filed my tax return?
If you have already filed your tax return, you can
destroy the package you receive. The packages are being mailed
from a joint effort between the Social Security Administration
and the IRS to ensure that all eligible individuals that traditionally
do not file a tax return are aware of the program.
Will my stimulus
payment affect my Food Stamps, SSI, or other benefits I receive?
The stimulus payment program will not affect any public assistance
program at the federal, state, or local level that are financed
with federal funds. Programs such as SSI, food stamps, and
other state welfare programs are financed with federal funds.
What are the requirements
and the amounts for the stimulus payment?
The rebate amount is based on the lesser of your income tax
liability if your AGI is greater than your standard deduction
amount plus the personal exemption amount (twice the personal
exemption amount if MFJ) or $300 ($600 if MFJ). The maximum
amount is $600 ($1,200 if MFJ). In addition you may receive
$300 for each child claimed as a dependent that is under 17
years old and has a social security number.
What will happen
to my rebate check if I owe back taxes or other federal debts
and my refund check is being applied to those debts?
If you owe back taxes or other state or federal debts that
are being collected through the federal government and your
refund check is being used to pay the debt, your rebate check
will also be used to pay the debt. If your debt is paid in
full without applying all of your rebate check you will receive
a check for the remaining portion.
If I am filing jointly
with my spouse and one of us is an injured spouse, what is
the stimulus payment amount?
The amount will be split 50/50, including the amount for each
qualifying child.
I am required to
file a tax return, but I am not receiving a refund. Can I
fill out the direct deposit information on my tax return so
that my stimulus payment will be deposited into my bank account?
Yes. Filling out the bank routing and account information
will allow your stimulus payment to be direct deposited.
I am otherwise not
required to file a tax return, but I am filing to receive
my stimulus payment. Can I fill out the direct deposit information
on my stimulus payment return so that my payment will be deposited
into my bank account?
Yes. Filling out the bank routing and account information
will allow your stimulus payment to be direct deposited.
I have an ITIN,
but my spouse has a valid Social Security number. Can we get
a payment?
If you and your spouse file a joint return, you will not get
a stimulus payment. If your spouse files a separate return,
your spouse may qualify for a payment, based on his or her
income deductions and credits.
For more Qestions
and Answers, visit IRS's Stimulus
Payments: Answers to Frequently Asked Questions page.
Updated
04/10/2008
This
material is provided for general and educational purposes
only, and is not intended to provide legal, tax or investment
advice. Individuals who wish to invest in retirement plans
should contact their tax and financial advisors regarding
their specific legal or tax situation.
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