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Economic Stimulus Information

SECTION 1: 2009 ECONOMIC STIMULUS INFORMATION

2008 Tax Returns will include an Economic Stimulus payment if certain requirements are met for Taxpayers.

In order to calculate this amount, the Taxpayer will need the amount of the Economic Stimulus Payment they received in 2008. In order to find out the 2008 amount, if you do not remember, follow the Link in Section 1 here and provide us the information with your Return Organizer.

CLICK TO VIEW PRIOR YEAR STIMULUS PAYMENT YOU RECEIVED FROM IRS WEB SITE

If you have any questions, please give us a call.


SECTION 2: 2008 ECONOMIC STIMULUS INFORMATION

In 2008, Taxpayers may have received an Economic Stimulus payment. The calculation for that payment is found below. After 2008, Taxpayers will receive this payment with their Return; see above.

Well now that you have also heard, you probably have questions about how it will work.
 
a. How big will your rebate be?

Refer to the Spidell Stimulus Calculator or Thompson Stimulus Calculator herein. We have confidence in the source of the Calculators and they should provide you with a Complete and Accurate Answer. However, we have not Audited or Tested the Calculators in relation to the complete Law, and therefore we cannot attest to the Accuracy or Completeness of the Calculators. Therefore, we  do not recommend that you rely upon the Calculators for any Financial reasons. 
    
b. What do you have to do to get it? File a Return. You can show a $1 Return.

We can help with this issue when we prepare your Return or you can Schedule a Consultation for us to look at your specific circumstances. There is no charge to our Client which we prepared a 2007 Individual Income Tax Return, Form 1040, by the Extended Due Date of 10/15/2008.

c. When can you expect to receive a check? See Rebate Schedule below.
 

The basic rebate will generally be limited to the amount of the 2007 tax liability, if the Tax Liability is less.
 
On the other hand, some taxpayers will qualify for a minimum rebate of $300 for singles or $600 for joint filers. These taxpayers include those with at least $3,000 of “qualifying income”.

What is Qualifying Income? Qualifying Income is earned income, Social Security, and Veteran’s disability benefits, even if they owed no tax for the year. A minimum rebate will also generally go to taxpayers who owed at least $1 of tax for 2007.
 
Rebate Per Child
Taxpayers with dependent children under 17 will generally get an additional rebate of $300 per child. So, for example, joint filers who qualify for the basic rebate and who have two dependent children can expect a check for $1,800.
 
Phase Out - High Income
On the downside, the rebate is phased out for higher-income taxpayers at a rate of 5% of income above certain levels. The beginning point of phase-out range is $150,000 for joint filers and $75,000 for other individuals. So, for example,  a single taxpayer with $85,000 of income for 2007, who would normally qualify for a $600 rebate, will get a check  for just $100 ($600, less 500, 5% of 85000-75000=10,000).

Rebate really= 2008 Credit in Advance!
If you don’t qualify for a rebate or get a reduced rebate, that is not necessarily the end of the matter. The rebate is not technically a rebate at all; it is an advance payment of a credit that will be claimed on your return for 2008. So, if you do not get a rebate based on 2007 data, but do qualify for a credit based on 2008 data, the credit will reduce your 2008 taxes. The same holds true if you qualify for a credit that is more than the rebate check you receive this year, the extra amount will reduce your 2008 tax bill.

What if 2008 Varies from 2007? 
On the other hand, don’t worry if you don’t expect your 2008 credit to be a much as the rebate you receive this year. You will not have to pay back an extra amount. According to a recent Seminar we attended regarding this new Law, if the Government makes a mistake and overpays you the Stimulus payment you will NOT have to pay the overpayment back. There will be no Penalties or Interest charged on the Overpayment.
 
Claiming the Rebate
Just file a 2007 tax return, the Government will handle the Rest. However, if you would like to receive the Payment Direct Deposit make sure to include the Bank Account information on the Return you file. Otherwise a Check will be mailed to you.

Change of Address - IRS Form 8822
Oh, do remember to file that Change of Address Form 8822 timely because the Check can only be mailed to the  address on the last Income Tax Return you filed.

Change of Address, Form 8822, is available on the IRS Web site (see our Links Page to easily access the IRS Web site) Complete and mail in the Change of Address to the IRS. Refer to the Form 8822 Filing Instructions on where to mail the Change of Address.
 
The Check Mailed
The Treasury Department says that rebate checks will begin going out in early May and payments will be largely completed this summer.
 
Please Note
Since the rebate is based on 2007 tax return information, if you put your return extension, you won’t get a rebate check until after your return is filed. Moreover, no rebate checks will be issued after December 31, 2008.

So, if you wait to file at the final October 15 extended return deadline, no rebate check? Depends.

However, even if a filing extension is necessary; you’re not out of the money: You will still be able to claim a credit against  your 2008 tax.


REBATE SCHEDULE

IRS announces rebate release schedule

The IRS has released its schedule for issuance of rebate checks in response to the Economic Stimulus Act of 2008 (null 110-185). The payment dates range from May 2 to July 11, 2008, and are based on:

  • Whether the taxpayer uses direct deposit or paper check; and
  • The last two digits of the taxpayer social security number
People who file a return after April 15 will receive their economic stimulus payment, but probably about two weeks later than the schedule shows. A return must be filed by October 15 in order to receive a stimulus payment in 2008.

DIRECT DEPOSIT

Last two SSN digits:
Payment will be transmitted:
 00 through 20
 May 2
 21 through 75
 May 9
 76 through 99
 May 16

PAPER CHECK

Last two SSN digits:
Payments will be mailed by:
 00 through 09
 May 16
 10 through 18
 May 23
 19 through 25
 May 30
 26 through 38
 June 6
 39 through 51
 June 13
 52 through 63
 June 20
 64 through 75
 June 27
 76 through 87
 July 4
 88 through 99
 July 11

Presented by Someone you can talk to...
Cindy J. Harris CPA

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