Tax rebate Q&A

If you’ve paid attention to the news lately, chances are you’ve heard about the economic stimulus law that Congress and the President have passed. Starting in May 2008, the U.S. Treasury will send out money to more than 130 million people. You may be wondering how the law will affect you.

Who’s eligible?

To receive the payment, you must have a valid Social Security number, and you must file a 2007 tax return. The Internal Revenue Service will use 2007 tax returns to determine who gets these payments and how much they get. Even if you paid little or no tax, you may receive money if you made at least $3,000 in qualifying income. If you can be claimed as a dependent on someone else’s tax return, you don’t qualify.

What’s qualifying income?

Qualifying income includes both taxable and some nontaxable income: regular earned income, Social Security benefits, Railroad Retirement benefits, veterans’ disability compensation, pensions, and survivors’ benefits from the Department of Veterans’ Affairs are all qualifying income for stimulus payments.

What if I don’t file a tax return?

Even if you aren’t required to file a tax return, but you do have qualifying income above the $3000 minimum, you should file a return. You won’t be charged taxes, but the return will be used to determine if you qualify for a stimulus payment.

What if my tax return shows less than the minimum?

If your 2007 tax return shows less than $3000 in income, but you received Social Security, Railroad Retirement or certain veterans’ benefits that aren’t listed and would raise your income above the minimum, you can file an amended return using Form 1040X, list the nontaxable benefits, and qualify for a payment.

How much can I get?

For most people, the payment will be the amount of tax liability on the tax return, with a maximum of $600 for individuals ($1200 for joint filers) and a minimum of $300 for individuals ($600 for joint filers). If you have children who qualified for the child tax credit on your 2007 return, you may also get $300 per qualifying child.

What’s the catch?

The money you receive will probably affect your 2008 tax return. You should save the notice you receive from the IRS, and use it when doing your taxes next year.

What should I expect?

The IRS is going to send two notices to most people. The first one will explain the stimulus program. The second notice will confirm your eligibility for payment, tell you how much you’re getting and when to expect the money. If you choose direct deposit on your tax return, this payment will come to you the same way as your tax refund.

Where can I find out more?

You can reach Cannon Air Force Base’s Volunteer Income Tax Assistance program at 784-7701. To find other VITA offices, call 1-800-906-9887. The IRS web site has more information at http://www.irs.gov.