In the February 13, 2008 press release, IR-2008-18, Acting IRS Commissioner Linda Stiff stated, “If you are eligible for a payment, all you have to do is file a 2007 tax return, and the IRS will do the rest.” The IRS estimates that over 130 million people will receive stimulus payments / tax rebates.
Who Is Eligible for a Tax Rebate?
The IRS will determine who qualifies based on 2007 tax returns, calculate payments, and then issue rebate checks automatically.
The U.S. Treasury Department Office of Public Affairs provided examples on its website of how the Economic Growth Act of 2008 will benefit individuals. Basically, an individual can expect to receive a tax rebate check equal to the amount of their 2007 tax liability, with a maximum payment of $600 per person (which translates into $1,200 for married taxpayers). Those earning over $75,000 (or $150,000 for married filing jointly) can expect a reduced payment based on how much their income exceeded those limits. Taxpayers are eligible to receive $300 per child who qualifies for the child tax credit.
Important Information about Federal Income Tax Rebates
- Tax rebate checks will be direct deposited for taxpayers who selected direct deposit on their 2007 tax returns.
- Most individuals just need to file a 2007 tax return to trigger their payment; no extra forms or steps are required.
- Individuals must have a valid Social Security number to receive a payment. Additionally, dependents must have valid Social Security numbers to be counted in the calculation.
- An Individual Taxpayer Identification Number or any other identifying number is not the same as a Social Security Number and will not qualify a taxpayer for the stimulus payment.
- Some individuals who do not pay tax are also eligible to receive payments, albeit reduced. This includes low-income workers, individuals who receive Social Security benefits, as well as recipients of certain veterans’ or railroad retirement payments. If these individuals had at least $3,000 of qualifying income in 2007, their payments will be $300 per person ($600 for joint filers) and $300 for each qualifying dependent.
- It is the responsibility of the individuals who fall under the exception above to file a 2007 tax return in order to notify the IRS that they are eligible for a payment. These individuals may not normally have to file a return, but need to do so now in order to notify the IRS of their qualifying income.
Be Wary of Phone Calls or Emails Regarding Tax Rebates
Individuals should be wary of tax rebate scams. The IRS cautions that individuals may be targeted by scamsters who use the tax rebate as a lure. Individuals should not give out personal or bank account information to anyone who calls and claims to be calling about a tax rebate check. The IRS has stated that it will not call individuals regarding these payments. Information about rebate checks will be communicated via U.S. mail. According to the IRS, taxpayers will receive two notices regarding the tax rebates: an explanation of the stimulus payment program and confirmation of the individual’s eligibility that includes the amount and tax rebate timetable.
Importance of a Current Mailing Address
It is imperative that the IRS has an individual's current mailing address. Taxpayers who have moved since filing their 2007 return are encouraged to update their mailing address with the IRS and the U.S. Postal Service.
Many individuals who are eligible to receive tax rebates are also eligible to receive free in-person tax return assistance through VITA or free online filing through IRS Free File.
Sources: IRS Website and U.S. Treasury Website
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