Tax Rebate Checks Wednesday, February 13, 2008 President Bush signed the “economic stimulus” legislation that is expected to provide tax rebates to more than 130 million Americans in the coming months. Although Congress had hoped that the rebate checks would stimulate the slowing economy immediately, taxpayers will not actually start receiving checks until May at the earliest. The Internal Revenue Service, which will be responsible for the distribution of the checks, will need to finish processing 2007 tax returns before it starts delivering the rebate checks. The following are some basic points about the rebates: • • • Single wage earning taxpayers will be eligible for a $600 rebate and married couples who file jointly will be eligible for $1,200. Taxpayers with dependent children under age 17 will be eligible for an additional $300 per child. Therefore, a wage earning family with two children would be eligible for $1,800. There is no limit on the number of dependents eligible for the rebate. The rebates will be based upon information on the 2007 tax returns. Therefore, to get a timely rebate, you should file your taxes by the April 15 deadline. Those who file an extension on their taxes may not get their rebate until year-end. Filing an income tax return this year, even though you don’t make enough money to owe federal taxes, will speed along your rebate check. The rebates phase out for single taxpayers who have an adjusted gross income of more than $75,000 and married taxpayers with an AGI of more than $150,000. If you received at least $3,000 in 2007 from Social Security benefits, veteran’s disability payments, earned income or any combination of the three, you are eligible for a rebate of $300, or $600 for married couples. Even in this reduced income category, you are eligible for the $300 per child additional amount if you have dependents under the age of 17. Many retired ministers who draw Social Security should qualify under this provision for a rebate check. Money coming out of your Minister’s Retirement Plan account does not count as qualifying income for the stimulus payment, although your Social Security will. College students who were claimed as a dependent by their parents will not qualify for a rebate even if they have earned income over $3,000. Taxpayers must have valid Social Security numbers to qualify for the stimulus payment. If married filing jointly, both taxpayers must have a valid Social Security number. And, children must have valid Social Security numbers to be eligible as qualifying children. The rebate payments will not count toward or negatively impact any other income-based government benefits, such as Social Security benefits, food stamps and other programs. Part or all of your rebate check will be withheld if you owe money to the IRS. Most taxpayers will receive two notices from the IRS. The first general notice from the IRS will explain the stimulus payment program. The second notice will confirm the recipients’ eligibility, the payment amount and the approximate time table for the payment. The rebate checks will not be treated as taxable income on your 2008 tax return.
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Most importantly, to get the rebate check you do not have to file an additional tax form or complete an application. All those who file tax returns will get the rebate in due time. If you are eligible for a rebate and do not get one, you should contact the IRS. Taxpayers should be alert for tax rebate scams such as telephone calls or e-mails claiming to be from the IRS and asking for sensitive financial information. The IRS will not call or e-mail taxpayers about these payments nor will it ask for financial information. To get rebates out to taxpayers quickly, the payments will be direct deposited for taxpayers selecting that option when filing their 2007 tax returns. Additional information about the rebate program will be shared with you when the IRS announces such.
Used by permission from: In the Know, Vol. IX, Issue 8 Art Rhodes, President and CEO Church of God Benefits Board, Inc.