Questions & Answers:
Rebate Checks
For more information on rebate checks, please visit the IRS website.
Q: How are the checks calculated? How much will I get?
A: Rebate checks will be calculated based on 2007 tax returns and will be the sum of two separate calculations:
- A base amount and
- A per child bonus
Q: What is the base amount?
A: The base amount is whichever is greater between two options:
- Option A – Federal income tax paid in 2007, with a maximum of $600 for single filers ($1,200 for married filing jointly) or
- Option B – Flat amount of $300 for single filers ($600 for married couples filing jointly), but only if the filer’s “qualifying income” in 2007 was at least $3,000, or the filer paid at least some federal income taxes in 2007
For this purpose, “qualifying income” includes earned income (i.e., salary, wages, etc); Social Security benefits (including Social Security disability payments), and certain payments made by the VA to disabled veterans and their surviving spouses.
Q: What is the per child bonus?
A: Anyone qualifying for the base amount (because they had at least $3,000 in “qualifying income” or paid at least some federal income taxes in 2007) also receives an additional $300 per child, with no limit on the number of children.
Q: Will there be any income limits on the checks?
A: Checks will be phased-out for single filers with adjusted gross incomes (AGI) above $75,000 ($150,000 for married couples filing jointly) by $50 for every $1,000 of AGI over $75,000 ($150,000 for married couples filing jointly).
Q: I know some people won’t get a stimulus payment. How do I know if I’m one of them?
A: You will not receive a stimulus payment in 2008, if any of the following apply to you:
- You do not file a 2007 tax return
- Your net income tax liability is zero and your qualifying income is less than $3,000
- You can be claimed as a dependent on someone else’s return (i.e., students who can be claimed on a parent’s tax return are not eligible)
- You do not have a valid Social Security Number. If you are married filing jointly and your spouse does not have a valid Social Security Number, you are also not eligible for a check. Similarly, the $300 per child bonus is only available for children for whom the parents provide a valid Social Security Number
- You are a nonresident alien
Q: When will I receive my stimulus payment?
A: The Treasury Department will start sending out payments in early May.
Q: I have moved since filing my 2007 tax return. How will my payment reach me?
A: You should file a Form 8822 with the IRS and a change of address notice with the U.S. Postal Service. This will ensure your check is sent to your new address. Without your current address, the check could be returned to the IRS as undeliverable.
Q: Will my stimulus payment be included in my regular tax refund? Will the checks or direct deposits come at the same time?
A: No and no. Taxpayers who over-withheld their taxes during 2007 will receive two separate payments. The first will be a repayment of the over-payment of taxes from 2007. The second payment, which will come later, will be a separate stimulus payment.
Q: I have not yet filed my 2007 tax return. Can I still qualify for a stimulus payment in 2008?
A: Yes, but you must file a 2007 tax return. Although the IRS has yet to announce a schedule for delivery of the stimulus payments, those who file after April 15 – either with or without a tax-filing extension – are likely to receive their stimulus payments later than those who file by April 15.
Q: Is my stimulus payment taxable?
A: No. You will not owe tax on your payment when you file your 2008 federal income tax return. But you should keep a copy of the IRS letter you receive later this year listing the amount of your payment. You will need to know this amount next year when you fill out your 2008 return.
