“The money is going to help Americans offset the high prices we’re seeing at the gas pump, the grocery store and also give our economy a boost to help us pull out of this economic slowdown,” President Bush said Friday.
The federal stimulus payments — tax blogger Kay Bell dubbed them “prebates” — are an advance on a tax credit you would have gotten when you filed your 2008 tax return. You’re just getting it a year early, says Bell, of Don’t Mess With Taxes. The amount will be based on your 2007 tax return and range from $300 to $600 per adult, up to $1,200 for married couples who file jointly, and $300 per child under 17 years of age.
Here are some other things you should know:
-No special paperwork is required for most people. Just file a 2007 tax return, and the IRS will figure out the amount of your rebate.
-Checks will start showing up in May. The money will be direct-deposited into your bank account if you select that option on your tax return.
-You have to have a valid Social Security number to get a rebate.
-Once you file your 2008 tax return and it ends up you should have gotten a bigger advance payment, you’ll get the extra money in 2009. If it turns out you should have gotten less, consider it a bonus. You won’t have to pay back the difference.
-The rebate is tax-free. You won’t have to count it as income on your 2008 taxes. You will have to note it on your 2008 tax return so the government doesn’t pay you the money again.
Also, the IRS “emphasizes the stimulus payments will not count toward or negatively impact any other income-based government benefits, such as Social Security benefits, food stamps and other programs.”
Who won’t get a rebate? This list includes college students who can be claimed as dependants, and people whose adjusted gross income is $87,000 or more ($174,000 for married couples who file jointly). The rebate will be reduced by $50 for every $1,000 you earn above $75,000 ($150,000 for married couples filing jointly).
Rebate distributions will be staggered between now and July for those who filed tax returns by the April 15 deadline. Those who filed for an extension will get checks as well, but they’ll face a delay of about two weeks. See a tentative distribution schedule here (payments are based on the last two digits of the taxpayer’s SSN…real great for those of us who are “91″)
Whether you plan to save it — a good idea given the economic downturn — invest it, spend it to cover rising food and fuel costs, or take advantage of retailers’ special rebate offers, consider it a gift from Uncle Sam.
Wahoo! Happy spending/saving!
Hey, I’m allowed at least one nerdy post a year, right? And really it’s not THAT nerdy because it involved money…which buys us things…and that makes everyone happy, right? We can all relate to that.