Economic Stimulus Act of 2008

Economic Stimulus Act of 2008 Helping Qualified Individuals Receive Their Economic Stimulus Payments 1 National Affordable Housing Preservation Associates Webinar April 24, 2008 Economic Stimulus Payments  What Is The Economic Stimulus Act? • Congress passed & the President signed the Economic Stimulus Act in January 2008 • 130 Million American Households will Receive Economic Stimulus Payments Beginning May 2008 & Continuing through 2008 2 Economic Stimulus Payments  Who is Eligible for an Economic Stimulus Payment? • Individuals with a Valid Social Security Number • Individuals who File a 2007 Individual Tax Return with:  a Net Tax Liability, or 3  at Least $3,000 of Earned Income and/or Qualifying Income Economic Stimulus Payments  Who is Eligible for an Economic Stimulus Payment? • Must Not be Claimed as a Dependent on Someone’s Else Tax Return in 2007 • The Economic Stimulus Payment for Taxpayers with Income in Excess of $75,000 (Single Taxpayers) & $150,000 (Married Filing Joint Taxpayers) is Subject to Phase-out 4 Economic Stimulus Payments  What is Qualifying Income? • Earned Income (Wages or Net Self Employment Income) • Earned Income Does Not Include Dividends, Interest, Capital Gains or Other Passive Income Sources (Such as Rental Properties) 5 Economic Stimulus Payments  What is Qualifying Income? (Con’t) • Social Security Benefits Reported on Form 1099-SSA  Supplemental Security Income (SSI) is Not Qualifying Income •Railroad Retirement Benefits Reported on Form 1099-RBB 6 Economic Stimulus Payments  What is Qualifying Income? (Con’t) • Veteran’s Disability Compensation, Pension or Survivor’s Benefits Received from the Department of Veterans’ Affairs (VA) 7 Economic Stimulus Payments  How Much are the Economic Stimulus Payments? • Minimum of $300 ($600 For Married Filing Jointly) with a Net Tax Liability or Qualifying Income of at Least $3,000 • Maximum of $600 ($1,200 For Married Filing Jointly) 8 • Additional $300 for Each Qualifying Child Economic Stimulus Payments  Who is a Qualifying Child? • A Child who is Under Age 17 as of December 31, 2007 • A Child with a Valid Social Security Number • A Child who cannot be Claimed as a Dependent on Another Tax Return 9 • A Child who meets the Eligibility for the Child Tax Credit Economic Stimulus Payments  How Does an Individual Receive an Economic Stimulus Payment? • File a 2007 Tax Return by the Due Date of October 15, 2008 • The IRS will make the Determination of the Exact Amount of Economic Stimulus Payment from the 2007 Tax Return Filed 10 Economic Stimulus Payments  What If an Individual Does Not Have a Tax Filing Requirement? • Some Individuals do not have a Legal Filing Requirement  Have Income which is not Taxable (Social Security Or VA Benefits)  Have Taxable Income that Results in No Tax Liability (Less than Standard Deduction And Exemption Amounts) 11 Economic Stimulus Payments  What If an Individual Does Not Have a Tax Filing Requirement? • Regardless of an Individual’s Legal Filing Requirement for 2007 or any year, in order to Receive an Economic Stimulus Payment they must File a 2007 Tax Return. Includes:  Social Security Recipients  Railroad Retirement Recipients  VA Benefit Recipients 12 Economic Stimulus Payments  What If an Individual Does Not Have a Tax Filing Requirement? Is there a Simplified Method for Filing in 2007? • For Individuals with Qualifying Income for an Economic Stimulus Payment and No Other Filing Requirements, they may file a Form 1040A With Minimal Entries For 2007 13 Economic Stimulus Payments  Impact on other Federal Benefits • Receipt of an Economic Stimulus Payment will Not affect the Eligibility or Amount of Needs Based Federal Benefit Programs (I.E. Food Stamps, Medicaid, Etc.) • Will Not Count as Income in Month Received • Will Only be Considered as a Resource 60 Days after the Month it 14 was Received Economic Stimulus Payments  Impact on 2008 Federal Tax Return • Stimulus Payments are Not Taxable • Taxpayers will Not Owe Tax on their Stimulus Payment in 2008 • Stimulus Payments will Not Reduce or Increase a Taxpayer’s Refund in 2008 • Individuals who do Not Qualify for an Economic Stimulus Payment based on their 2007 Return May Qualify for a Special Benefit on their 2008 Return 15 Economic Stimulus Payments  Economic Stimulus Payments Federal Tax Offsets • Economic Stimulus Payments are Subject to Offset for Outstanding Tax and Non-tax Liabilities in the Same Fashion as Regular Tax Refunds • If an Offset Occurs, Taxpayer will Receive a Letter explaining how the Stimulus Payment was Applied 16 Economic Stimulus Payments  Economic Stimulus Payments • Economic Stimulus Payments will be Direct Deposited if Taxpayer requested Direct Deposit on their 2007 Tax Return • Economic Stimulus Payments will be Mailed to Taxpayers who:  Requested a Split Refund  Requested a Refund Anticipation Loan 17 Economic Stimulus Payments  Economic Stimulus Notices • IRS will send Notice to all Taxpayers who filed a 2006 Tax Return in Early March informing them about the Economic Stimulus Payments • IRS will send a Special Notice in Late March (including an Information Guide, Form 1040A, Mailing Envelope) to SSA, RRB & VA Beneficiaries who did not File a 2006 Tax Return 18 Economic Stimulus Payments  Economic Stimulus Notices • Each Recipient of an Economic Stimulus Payment will Receive a Second Notice from IRS around the Time of the Economic Stimulus Payment informing them of the Amount of the Economic Stimulus they will be Receiving 19 Economic Stimulus Payments  Economic Stimulus Notices & Scams • Please be aware of potential scams • The IRS will not: • Go Door-to- Door • Make Outbound Phone Calls • Send e-mails • Will never ask for credit card information 20 Economic Stimulus Payments  Economic Stimulus Payment Dates • Payments will Start in May & will Continue throughout the Summer based on a soon to be released Schedule • Initial Schedule will be based on the Last Two Digits of Taxpayer’s Social Security Number • By Law, Final Payments Must Be Made by December 31, 2008 21 Economic Stimulus Payments  Economic Stimulus Payment Dates • For Returns Filed By April 15, 2008 • Direct Deposits will start the week of May 2nd and be completed by the week of May 16th • Paper checks will start the week of May 16th and completed by week of July 11th • For Returns Filed After April 15th, ESP willed about two weeks after their 22 refund but not before July 11th Economic Stimulus Payments  Economic Stimulus & Amended Returns • If a Taxpayer has already filed their 2007 Tax Return & did not include $3,000 of Qualifying Income because they did not include the Non-taxable Income such as SSA/VA Benefits, that Taxpayer will need to file an Amended Return, Form 1040X, to Report the additional Qualifying Income. 23 Economic Stimulus Payments  Economic Stimulus Filing Dates • Initial Payment Schedule will impact returns Filed by April 15th • Filing Deadline for 2007 Tax Returns is October 15, 2008 24 Economic Stimulus Payments  How Can You Help • Provide educational information to your residents • Provide access to forms necessary to file for an ESP payment (Form 1040A, IRS Package 1040A3) • Hold “ESP Filing Seminars” at Your Properties Where Assistance Could Be Provided to Potential ESP Recipients 25 Economic Stimulus Payments  How Can You Help – “ESP Filing Seminars” • Most Potential ESP Recipients Who Have Not Filed to Date Need Face-toFace Assistance • Fear/Confusion Regarding Taxes • Lack of Understanding of What is Required 26 Economic Stimulus Payments  How Can You Help – “ESP Filing Seminars” • Plan Workshops in Your Facilities • Provide Direct Assistance (Facilities Manager & Volunteers Who Will Help Complete the Return) • Self-Help Assistance (Volunteer Helps a Group of Individuals File Returns as Same Time) 27 Economic Stimulus Payments  How Can You Help – “ESP Filing Seminars” • Minimal Training Required to Prepare Simple ESP Returns • IRS Publication 4665 www.irs.gov/pub/irs-pdf/p4665.pdf • IRS Package 1040A-3 www.irs.gov/pub/irs-pdf/k1040a3.pdf • NCOA/AARP Online Tool – www.stimulus2008.benefitscheckup.or 28 g/espp/welcome Economic Stimulus Payments  How Does an Individual File a Simple Form 1040A to Qualify for an Economic Stimulus Payment on a Paper Return? • Secure an IRS Form 1040A • Write “ECONOMIC STIMULUS” Across the Top of the Form 1040A • Write in Taxpayer’s Name, Address and Social Security Number in the Appropriate Boxes 29 Economic Stimulus Payments  How Does an Individual File a Simple Form 1040A to Qualify for an Economic Stimulus Payment on a Paper Return? (Con’t) • Check the Filing Status that Applies to the Taxpayer •Input Taxpayer’s Earned Income (Wages & Net Self Employment Income Less Than $400) on Line 7 30 Economic Stimulus Payments  How Does an Individual File a Simple Form 1040A to Qualify for an Economic Stimulus Payment on a Paper Return? (Con’t) • Input Taxpayer’s Social Security (Form SSA-1099), Tier 1 Railroad Retirement (Form 1099-RBB), and/or Veteran’s Disability &/or Death Benefits on Line 14a • If Exact Amount is Not Known, Use Estimate Based on Monthly Benefit 31 Economic Stimulus Payments  How Does an Individual File a Simple Form 1040A to Qualify for an Economic Stimulus Payment on a Paper Return? (Con’t) • Input Amount of Non-taxable Combat Pay on Line 40b • For Taxpayers Wanting Direct Deposit, need to Complete Lines 44b through 44d with Bank Information • Sign Return and Mail to IRS 32 Economic Stimulus Payments  Economic Stimulus Information & Marketing Materials • For Latest Information, please visit the Official IRS Website at www.irs.gov to view up to the minute Frequently Asked Questions Section. • From irs.gov Economic Stimulus Information Center, click on the Link to “Marketing Products For Partners” to Locate Various Marketing & Outreach 33 Tools Economic Stimulus Payments  Economic Stimulus Information & Marketing Materials • Key Materials Available:  One Page Flyers for SSA, VA, RRB & Low-income Recipients  Sample 1040A  Envelope Stuffers  Radio Public Service Announcements 34 Economic Stimulus Payments For More Information on Economic Stimulus Payments, Please Visit www.irs.gov & Click on “Rebate Questions” on the Home Page or Call IRS Hotline at 1-866-234-2942 35