You Must File 2007 Tax Return To Receive Stimulus Rebate in 2008
By George Jones, Washington Staff Writer
"To get a rebate check under the Economic Stimulus Act, an individual must file a 2007 income tax return," stated IRS Acting Commissioner Linda Stiff at a press briefing conducted from IRS headquarters in Washington, DC, on February 13, 2008, immediately following the president's signing of the bill into law.
Stiff announced that the IRS had been working on the rebate program for several weeks now, and "that the first checks will go out in early May, 11 weeks from now." Treasury's Financial Management Service (FMS) Commissioner Judy Tillman, also at the news briefing, stressed that the government had paid out rebates twice in previous years without problems and that FMS is confident that this rebate program will be no different.
Stiff advised that the determination of eligibility and payment amount for each individual will be made by the IRS based exclusively on information provided on a filed 2007 income tax return. Until a 2007 tax return is filed by any eligible individual, that individual will not be sent a rebate check. Those not required to file a 2007 tax return for federal income tax purposes nevertheless must file if they wish to receive a rebate this year. That group includes those individuals with no taxable income for 2007 but having at least $3,000 in qualifying earned income, Social Security benefits or veteran's disability payments.
Stiff said that the IRS was working with the Social Security Administration and the Veterans Administration "to get the word out." There are an estimated 20 to 30 million individuals falling into this category of persons not required under the tax law to file a 2007 return. Those who, despite outreach efforts, do not file a 2007 return by year-end 2008 will be eligible to file a 2008 return in 2009 to claim the rebate credit, Stiff added. Individuals who already have filed 2007 returns but did not disclose non-taxable Social Security or veteran's payments that would qualify them for a higher, $300 rebate, are being advised to file an amended Form 1040X to provide the IRS with this essential information for issuing the proper rebate check amount.
Those individuals who elect the direct deposit option on their 2007 tax return will receive their rebate amounts from the IRS by direct deposit. Because of printing and mailing time for regular Treasury checks, Stiff guessed that direct deposit recipients would receive their checks about 10 days earlier. If a split-refund was requested on a 2007 return, the IRS will deposit the entire rebate in the first account that is listed. Disbursement of the funds themselves will take place from four locations: Philadelphia, Kansas City, Austin and San Francisco.
While the IRS is certain that the first rebate payments will be made in early May, it has not yet decided on a system to order the payments. A team within the IRS and Treasury is investigating the most efficient and fair ordering method. An IRS spokesperson said that the method will be announced "as soon as it is tied down." Stiff added that a notice to each taxpayer receiving a rebate payment as to the amount would be sent 7 to 10 days before the check is received. In the case of direct deposits, however, Stiff said that the notice and deposit might be received almost simultaneously.
Stiff also reported that there will be few, if any, payments that would be covered by refund anticipation loans (RALs). She stated that the industry as a whole has said that it has no intention of using RALs in this situation.
For more help with the many tax changes that may affect you for the 2007 tax filing season and beyond, take a look at the Toolkit Tax Guide 2008. This easy-to-understand book helps taxpayers--including individuals and entrepreneurs--manage their taxes so they can better prepare their 2007 tax returns, as well as begin planning for 2008. It also includes free income tax preparation of a state and federal return and e-filing with CompleteTaxTM, CCH's easy-to-use online tax return service for individuals. Toolkit Tax Guide 2008 is available in major retail and online bookstores nationwide; via the Business Owner's Toolkit bookstore; or by calling 1-800-248-3248.
- Related items:
- Economic Stimulus Package Clears Congress
- Survey Finds Most Consumers Would Not Spend Tax Rebate
- National Economic Stimulus Legislation Agreement Announced
- Economic Stimulus Plan: How Might It Work?
- Tax Round-Up: A Look Ahead to Changes in 2008
Posted February 26, 2008.
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