- Tax Rebate Plan
Tax Rebate Plan
That's the bottom line, if you want to get a tax rebate courtesy of The Economic Growth Act of 2008, enacted Feb. 13.
The act, designed to stimulate the economy, will provide one-time payments of as much as $600 per person and $1,200 per couple to most Americans. Click here to use our TurboTax rebate calculator to estimate how much you are likely to receive.
IRS begins mailing rebates May 2
For people who file their returns by April 15, the IRS will mail rebates between May 2 and July 11. Just when yours will be sent depends on how you choose to receive your payments and the last two digits of your Social Security number. Those who have their payments sent by direct deposit will get theirs before those who have theirs mailed. Click here for the latest details on the payment schedule.
Note: If you won't be getting a rebate this year, or feel you're not getting your fair share, you could qualify for one next year. Read more about second-chance rebates. TurboTax wants to make it easy for you -- whether you're doing your own return or helping a family member or friend to file this year. You can learn more here: 2007 Rebates for Social Security, Railroad Retirement and Veterans' Beneficiaries.
Service members can use their nontaxable combat pay to qualify for rebates as well. View Combat Pay and Rebates to learn more.
Prepare and file a return using the Free Edition of TurboTax. There is no charge for Free Edition, which is intended for filers with simple returns. You can prepare a tax return and e-file it , both at no cost. You can also print your return and mail the return to the IRS. For help in using Free Edition, read Rebates: Don't Normally File A Tax Return?
- Do I need to apply to get my rebate?
- How much will I get?
- Are there people who don't qualify?
- Can I use a number different than my Social Security number to qualify?
- What counts as qualifying income?
- Will a rebate reduce my Social Security payments?
- Will this affect my 2007 return?
- How will I receive it?
- What if I file my tax return after April 15?
- Can I have my rebate applied to my 2007 tax bill or to my 2008 estimated taxes?
- Will I have to give the rebate back at some point?
- How will I know if I'm getting a rebate?
No, most of the 130 million Americans eligible for the rebates, or what the IRS calls “economic stimulus payments,” need only file their 2007 income tax returns to get theirs. The IRS will figure the rebate amount and issue payments beginning in May.
However, if you qualify for a rebate, but wouldn’t ordinarily be required to file a tax return, you must file a 2007 return to receive it. This applies to some Social Security recipients and lower-income workers.
It depends on your 2007 income tax bill, your 2007 income and how many children you have:
- If you’re single and owe, or have paid, $600 or more in 2007 taxes, you will get the maximum of $600.
- If you are married and have 2007 taxes of $1,200 or more, you will get the maximum of $1,200.
- If you’re single and have taxes of more than $300, but less than $600, you will get a rebate equal to your bill. So if you paid or will pay $400 in 2007 taxes, you would get a $400 rebate.
- If you're married, and have taxes of more than $600, but less than $1,200, again, you will get a rebate equal to your taxes.
- Also, if you owe no 2007 taxes, but earned at least $3,000 in wages in 2007 or had Social Security, Railroad Retirement or certain veterans' benefits of at least $3,000 for the year, you will get a minimum rebate of $300 per person.
- If you or your spouse had nontaxable combat pay of more than $3,000, you will get at least $300 per person, or $600 per couple, plus $300 per child. For more information read this article on combat pay.
In addition, a rebate of $300 per child will be given, with no limit on the number of children. To qualify, a child must be age 16 or younger as of Dec. 31, 2007. Older children who can be claimed as dependents, such as college students, do NOT qualify.
For examples of how the rebates will apply to different households, view this Treasury Department web site and click on fact sheet.
Yes.
- Anyone who can be claimed as a dependent on someone else’s return. This would include a child, age 17 or above claimed as a dependent on a parent's return, for example, a college student. It would also include an adult dependent, such as an elderly parent.
- Non-resident aliens.
- Anyone who pays no income tax and whose qualifying income (see definition below) is less than $3,000 for 2007.
- Anyone without a Social Security number.
- Some higher-income earners. Click this link for more details.
- Anyone who doesn't file a 2007 tax return.
What about people who died in 2007 or early 2008? Can their survivors get a rebate?
Yes. Assuming an individual was otherwise qualified in 2007, the IRS will issue a rebate in that person's name or to the account designated by that person on a 2007 tax return. This applies whether the person died after filing, or the final income tax return was filed by a surviving spouse or personal representative.
Note: To get a rebate, you and your dependents must each have a valid Social Security number.
Other numbers issued by the IRS, such as a Taxpayer Identification Number (ITIN) or an Adoption Taxpayer Identification Number (ATIN) will not be accepted.
- If a couple files a joint tax return, and one spouse has a Social Security number and one has an ITIN, both will be disqualified (with one exception for military couples, see below). The spouse with the Social Security number can try to qualify for a rebate by filing a return separately.
- Parents who obtain a Social Security number for an adopted child, replacing the temporary ATIN, by the end of 2008 will be eligible for the child stimulus payment on their 2008 tax returns.
Exception: If you are a member of the military with a Social Security number, married to a foreigner with an ITIN and you file a joint return, you will not be disqualified from receiving a rebate. But your children must have valid Social Security numbers to be eligible as qualifying children.
Earned income, or wages, self-employment earnings and Social Security, Railroad Retirement and certain veterans' benefits.
Certain other kinds of income does not count toward the $3,000 annual 2007 minimum: dividends, interest, capital gains, distributions from Individual Retirement Accounts, and non-Social Security and non-veterans' pension income.
Supplemental Security Income (SSI) does not count as qualifying income.
The IRS says the rebates will not count against or reduce any other income-based government benefits, such as Social Security benefits, food stamps and other programs.
The rebate will not affect the 2007 taxes you owe.
If you have already filed, you can just wait to receive your payment.
Most people will receive their rebates the same way they choose to receive refunds on their tax returns -- by direct deposit into their bank or other accounts, or by check in the mail.
If you haven't filed a return yet and you qualify for a rebate, you can select either method when you file.
Under certain circumstances, however, the IRS has decided that taxpayers can only get their rebates by mail, even if they get their refunds by direct deposit. At TurboTax, this will happen if you use a "refund transfer" when filing your 2007 return. This service lets you pay for your tax preparation and/or e-filing from your refund proceeds, for an additional fee, under an agreement with Santa Barbara Bank & Trust .
The IRS also says that taxpayers who use "refund anticipation loans" or RALs (loans made to tax filers against their expected refunds) will also be unable to receive their rebates by direct deposit. TurboTax does not offer RALs.
The IRS reminds you, if you haven’t filed, that using direct deposit is the fastest way to get both your regular refund and your rebate.
Because the IRS is ahead of schedule in sending out the stimulus payments, you may receive your rebate check as early as Monday, April 28th.
You can still get your rebate, but don’t wait too long to file. The IRS says it will continue sending rebates until Dec. 31, 2008.
Remember that it's not enough to request an extension for filing, you must FILE the return itself to get a rebate.
No.
However, you might have to report it on your 2008 tax return. But it will NOT be taxed.
While most people refer to it as a rebate, the IRS is calling it a "stimulus payment."
It’s money the government wants Americans to spend to boost the economy. The money will be borrowed by the government and added to the federal deficit.
Your stimulus payment will be treated like a regular tax refund. That is, it will be used to offset or pay down outstanding income taxes and some non-tax liabilities, such as unpaid child support.
You should receive two notices from the IRS. The first will explain the stimulus payment program. The second is supposed to confirm your eligibility, the amount of the payment and approximately when you will get it. Click here for the latest update on the notices.
If you move after you file your 2007 tax return, notify the IRS, so your rebate won’t be delayed. Fill out Form 8822, Change of Address and also notify the Post Office.
Important: The IRS has already seen scam artists use the proposed rebates as lure to rip off taxpayers.
Keep in mind that the IRS is sending two informational notices to taxpayers advising them about the rebates. But it will not call or send you e-mails referring to the rebates or asking for your banking account numbers or your financial information.
Visit the IRS Economic Stimulus Payments Information Center.
