Will The Tax Rebate Reduce My 2008 Refund?

Irs Economic Stimulus Package The IRS is debunking several myths surrounding the tax stimulus rebate checks.

by Emily Forrester

Published: Wed, February 27, 2008 - 4:55 pm CST

The following is a press release sent to News 5 to help answer questions about tax rebate checks:

The Internal Revenue Service today moved to set the record straight on several issues surrounding the 2008 Economic Stimulus Payments. An estimated 130 million taxpayers will receive the payments beginning in May.

“The most complete information about the payments is at IRS.gov,” said IRS spokesman Dan Boone. “But the IRS is concerned that some rumors are causing confusion.”

The following is a list of reported myths and the facts about the payments:

MYTH – The Stimulus Payment will reduce a taxpayer’s 2008 refund.
FACT – The payment will not reduce refunds or increase the amount owed when a 2008 return is filed.

MYTH – The Stimulus Payment is taxable.
FACT – It is not subject to federal taxes, but taxpayers are encouraged to keep a copy of the IRS notice they will receive later this year showing the amount of payment. In the event a taxpayer does not qualify to receive the full amount this year but does next year, the notice will serve as a record of the previous amount received.

MYTH – Taxpayers needn’t do anything in order to receive a Stimulus Payment.
FACT – Taxpayers must file a 2007 tax return in order to be eligible for a payment. The IRS will do the rest.

MYTH – Everybody is eligible for a payment.
FACT – Not everyone qualifies, but most of those who do will receive a minimum of $300. Individuals or married couples who have no 2007 tax liability must file a tax return reporting at least $3,000 of “qualifying income,” which includes most Social Security benefits, certain Railroad Retirement and veterans’ benefits, and earned income. Filers whose 2007 adjusted gross income exceeds $75,000 ($150,000 for married couples filing jointly) will receive a reduced payment or no payment at all.

MYTH – A person can file with any taxpayer ID number and get a Stimulus Payment.
FACT – All taxpayers (both spouses on a joint return) must have a valid Social Security Number (SSN) in order to be eligible. Children must have valid SSNs to qualify a filer for an additional amount.

MYTH – Only paper checks will be issued.
FACT – Direct Deposit is the best way to receive the payment. Note that even if you aren't due a refund on your 2007 tax return, filling out the bank routing information will allow your Stimulus Payment to be direct deposited.

MYTH – The IRS will contact taxpayers by phone or e-mail about their Stimulus Payments.
FACT – Watch out for scams! IRS will contact taxpayers about Stimulus Payments only via the U. S. Mail.

The IRS reminds those who don’t have any other requirement to file a tax return that submitting a tax return to qualify for the Economic Stimulus Payments does not create any additional tax or trigger a tax bill. In addition, the Stimulus Payments will not have any effect on eligibility for federal benefits.

Complete details are available at irs.gov

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myview Says:

Fri, May 02, 2008 at 8:39 am

I appreciate the government sending out the tax rebates but is it really a rebate. When you factor in all the extra money you are spending out for gas and food its just helping put more gas and food on the table for a few more monthes. Thus giving the gas companies even more money for profits. The extra money will come in useful but i dont feel it is going to boost the economy any. If anything it will just boost the gas companies profits more then they already are. Alot of people are so excited about these rebates and are thinking of new toys to buy with them and new things but once that money is gone they will be right back to where they were before the money came struggling to pay bills and buy food and put gas in the car to get back and forth to work. I have figured just from the extra costs of everthing today the rebates are simply making up for prices being too high. And should only help for a month or two before everyone is back to where they started before the rebates came out.

fee fee Says:

Thu, Feb 28, 2008 at 9:54 am

you know im proud that the g’ment is helping out this year with prices going up we need it an so does the people on disability an they should be the main concern! their not going to receive it . my parents is on ssi they not going to get it! it looks like the elderly would be the first to get it! its good that they receive the money each month but by the time they pay their bills they dont even have any money left for food an they not giving many stamps out a month for the elderly not enough to do any good!!!! i just think we need to start doing more and to make sure our elederly is being took care of thanks for letting me make a comment

housedivided Says:

Thu, Feb 28, 2008 at 7:26 am

A. The economic stimulus law refers to the same definition of Social Security
and Railroad Retirement benefits used in IRS Publication 915. Thus, Social
Security monthly retirement, survivor and disability benefits, or the Tier 1
Railroad Retirement benefits equivalent to those SS benefits, all count.
This is the amount reported to you by the Social Security Administration as
“Net Benefits for 2007” in Box 5 of Form SSA-1099 or by the
Railroad Retirement Board in Box 5 of Form RRB-1099. Report this amount
on Line 14a, Form 1040A. Determine the amount of your Veterans’ benefits
by multiplying your monthly benefit by the number of months during 2007
that you received the benefit. Supplemental security income (SSI) payments
are not considered Social Security benefits and thus cannot be included.
Because SSI is not taxable, it is not reported to you on Form SSA-1099. [New 2/27/2008]

housedivided Says:

Thu, Feb 28, 2008 at 7:21 am

Q. I am filling out the special Form 1040A to report my qualifying income. Which Social Security benefits should I report on Line 14a?

ILOVEPUPPIESTOO:
Found in frequently asked Q & A on IRS.gov
article was long so have to post 2nd to get answer in
If this doesn’t help you I suggest calling the IRS of SS office
for that info rather than listening to here say.

ILovePuppiesToo Says:

Thu, Feb 28, 2008 at 6:42 am

I went to irs.com and no where that I can find on their site “people who are on disability” may be eligible. It does however mention Veterans on disability are eligible. How can I find out if I am eligible? I do not have to file taxes each year because I am disable.