The Senate and the House have both passed a stimulus package designed to give taxpayers rebates totaling almost $170 billion. The government’s hope is that taxpayers will go out and spend this money to spur along the economy.
How much stimulus money will I receive?
Depending on your income level, you may see up to $600 per person, with an additional $300 for each eligible child younger than 17. The rebate starts out at $300 per person, but rises to $600 per person to match the taxes you will pay based on your 2007 Adjusted Gross Income (AGI).
Your AGI is generally lower than your salary, and is based on your earnings after tax deductions such as 401(k) and Traditional IRA investments and other qualified deductions. However, if you earn above a set limit, you may receive less than $600. The tax rebate decreases by $50 for every $1,000 earned above $75,000.
How much stimulus money for dependents
If you are a dependent for someone else’s taxes, you will not receive a rebate even if you earned enough money to qualify for the rebate. If you are over 17 and are a dependent, neither you or your parents will receive a rebate. However, if no one can claim you as a dependent in 2008, you may still receive the rebate in 2009.
The stimulus tax rebate actually is a rebate against your 2008 taxes
This stimulus is a tax rebate against your 2008 taxes, even though they have not yet been filed. Even though this rebate is actually for your 2008 taxes, it will be based upon your 2007 AGI. When you file your 2008 taxes in early 2009, the calculation will be run again. If you should have received a larger rebate, the treasury will send you another check to make up the difference. This would apply to people who had children during 2008, or those whose 2007 AGI was above $75,000, but dropped below that level in 2008. If you income rises and you would have received a lower rebate, you get to keep the difference. At least they won’t ask for a refund! In either case, you do not have to pay back any of this rebate.
When will I receive my stimulus rebate check?
Checks will be mailed beginning in May, and will take approximately 10 weeks to complete. In all likelihood, you will see your check between May and early July. This assumes you file by the April 15th deadline. Those who file extensions will see their returns at a later date. Whatever you do, just don’t spend it before you get it!
For more information, check out the Economic Stimulus Package Frequently Asked Questions.
Update: The economic stimulus checks will be sent out a week early.
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So what you’re saying is that there may actually be some small benefit to my whole fiasco with the annuity we inherited? Our income is going to look a lot higher than normal, meaning we’ll owe more taxes for 2007 (though our AGI will still be under $75,000). And our income will drop significantly in 2008.
Thanks for explaining this. It’s very confusing.
Thanks for the explanation! I have been wondering about this and trying to understand it better. Although I am going to have to disappoint the government and not stimulate the economy with the rebate – mine is going to my debt!
Lynnae, I believe the $75,000 AGI is per person and $150,000 for couples. So you may get the full rebate this year ($600 per adult, and $300 per child).
JvW, I am going to disappoint the government as well – my money will go toward savings.
It’s going straight to debt reduction for me. I’ve paid in well over $30,000 in taxes for 2007 and this is going straight to the Citicard unless I have it paid off first! Then it’s going to either the student loan or to finish paying on the oldest’s braces. That $200/month for braces is killing me.
I guess there is incentive now to file on time and not for an extension! I will have to let the IRS know we have an additional child.
Ron, as much as the government wants people to go out and spend money to help the economy, I can’t help but think that on a macro scale, debt reduction is just as good, if not better then outright spending – especially if that spending means taking on more debt. On a micro level (i.e. your bottom line), it is probably the best possible thing you can do! I hope you get that debt knocked out quickly!
I’m just happy they won’t ask for your tax rebate back.
Looks like I will be getting $900 in tax rebate. I am going to save it. Awesome.
“I’m just happy they won’t ask for your tax rebate back.”
They will, in the form of new taxes someday. The government is borrowing all this money to hand it out; they are going to have to repay it somehow.
Pinyo, I’m going to save my money as well. That is the best thing for my current situation.
David, you are 100% correct. I am not a fan of this “stimulus package” but it has already passed. The only thing I can do is cash the check, or refuse the check, and I’m surely not going to do the latter! But I will save that money, because I know that one day, someone will come calling for it. How and when, I don’t know. It might even be in the form of diminished or no social security benefits, so as long as I save it toward retirement, I will be fine.
How do they detemine children? Is is the dependent test or the up to 16 used for the child tax credit? I have 17, 19 and 23 year olds in school. It si either $900 more or none for the kids.
Richard, I believe that if you can claim your children as dependents on your taxes, then you will automatically receive the rebate.
The stimulus package isn’t all bad folks. The interest rate the government is going to pay on the borrowed money is very very low (like 4.25%). If foreigners want to give us their money for such a low return I am fine with that. Our economy (even running a trade deficit) will churn out a better than 4.25% return on the capital! For numbers and references that back this up you can check out one of my blog posts from a while back, but seriously the debt is not the huge worry that everyone seems to think it is. Think of it the same way as a business borrowing money for growth; they may pay double the 4.25% and we still giddily buy up their stock.
We have an annual income of $32,000. At this rate we do not file an income tax return, per the instructions. How do we apply for the stimulus package money ?? How does the Gov know we are eligible ??GIT
I am a new small(very small) business owner who would like to get more information on the stimulas package for businesses. I operate a canoe rental business and want to know if I would be able to get a 50% reduction on my business taxes if I purchase new equipment (Canoes, Kayaks, Vehicles & other related outdoor equipment) for our business.
There is little information on this part of the 2008 economic stimulus package that passed. Everybody talks about the rebate check, but this could be huge for the small business owner.
If anyone knows more about this please post it on this website’s commets post page.
Do those that don’t file income tax.Do they get a rebate? Thank you
Denise, I believe the rebate checks are automatically sent to everyone who qualifies, but the qualifications are based on filed tax returns. Even if your income isn’t high enough to warrant a tax return, you should file this year. It is the only way you can receive a rebate check.
Will the rebate checks be sent out going by last numbers of your social security number or letters beginning of your last name?
Joann, to be honest, I haven’t heard. All I know is that they should be sent out starting around May if you file on time. If you miss the April 15 deadline, it may take until December or so to receive your rebate check.
George,
You will have to file a tax return to be eligible to receive the rebate.
Jared, thanks for the comment. I must have replied to George directly instead of posting the answer here as well!
I am buying the most expensive big screen HDTV that this will buy and above the HDTV in a frame will be President George Bushs name with a great of thanks. Love Antonio
I don’t make but around 30-35k either but still file taxes. Are you sure not eligible for a low income tax credit ? I just discovered on the irs.gov or tax act freedom web site you can file your taxes for free or half the cost of the normal turbo tax rate and is turbo tax. very user friendly and easy to use. please file your taxes for money due to you and for your rebate check other wise no check
My question is were can i find this form on the stimulus package and how do i fill it out.
my husband passed away in 06 i filed single and sent it in now inthe newpaper it said my husband can get it also even though he is deceased. i was told that they will look ar your and his record i sure hope so
Jennifer, the rebate will be automatically sent to you based on your 2007 tax returns. As long as you file returns and qualify for the rebate, you will receive it automatically.
Mary, I am very sorry to hear about your husband. I have not heard or read anything about a situation like yours, so the only thing I can do is refer you to the IRS page explaining the system, or recommend you speak with a tax professional. I wish you the best.
The government will dtermine the amount of money you get by your tax documents. This is why they are having people on SSI and people who normally would not file taxes file this year. I have already done 2 people’s taxes this year that will be receiving the rebate that did not even pay in any taxes
So let me see if I have this straight… I generally average a $700 rebate every year when I file taxes. I’m eligible for the $600 rebate in May/June. So bascially, when I file my taxes next year (’09) I’ll only get $100 back?? Doesn’t that kind of defeat the purpose of this stimulus package? Won’t the economy just be in worst shape next year if people don’t have the extra money to spend to stimulate the economy?
I am obviously having a brain knot moment… What I had been told was that if you were going to get, say, $1000 tax refund in 2008 that you will now only get $400 because you received $600 of it in May of this year. Now I am understanding that this $600 ($300 or $1200 or, or) is in ADDITION to your usual refund. Ok…so,which is it? Thanks.
Hello Pudden, The Stimulus Rebate check will not affect the refund you get this year, which is for your 2007 taxes. The refund is actually a change in the tax laws that takes effect for 2008 taxes, which will be filed in early 2009. However, the government wants to give people the money now so they can go out and spend it and hopefully help out the economy.
This will not affect your 2007 taxes, and is in ADDITION to your usual refund.
Lynn, I understand your point 100%. It’s too early to tell how this will affect next year’s taxes for a lot of people, but you are correct when you mention this comes from next year’s taxes. However, it is due to a change in the tax laws, so it is possible you will get roughly the same amount as in the past, in addition to this rebate.
As for the economy… Who knows? I don’t like the look of it now, and I’m not sure it will get better between now and then. I think we have a long way to go.
I got my notice in the mail stating that a rebate check may be coming my way. However, it also stated that those who can be claimed as dependants on someone else’s taxes might not recieve a rebate, which applies to me. I most definetly earned enough to get the rebate, but what I’m wondering is if I will be getting one at all. If there’s anybody that can offer me some advice or an answer. I can’t seem to find one anywhere. Thank you!
Rachel, If someone can claim you as a dependent (your parents for example), then they will get the rebate, not you. Otherwise the government would be paying out a rebate to the person claiming you as a dependent and to you, which would be twice the rebate.
You may want to double check with the IRS or an accountant for your particular situation. Good luck!
alright I am considered a dependent (I am 21), I meet all qualifications, I am eligible for the check?
Matt, I believe only one person can claim the rebate, so if you are a dependent, you probably cannot also receive the rebate. YOu may want to double check with the IRS.
OK, I found the answer. I will not be receiving the check, and my parents will also not receive anything for me (since I am over 17). If you ask me it is a bunch of bull. I made over 3,000, and filed federal taxes. I will not receive any payment, and my parents will also not receive anything. Pretty much screwed just like everyone else in my age group.
Matt, There may still be hope for you to get the rebate, although it might not come until next year.
The rebate is actually a “pre-bate” for 2008 taxes that will be paid in 2009. it is only based on 2007 income. So if you are no longer a dependent in 2008, you should get the rebate anyway.
When you file your 2008 taxes in early 2009, the rebate calculation will be run again. If you should have received a larger rebate, the treasury will send you another check to make up the difference.
check out the irs homepage. http://www.irs.gov
you cannot be a dependent and you also have to be under the age of 17.
I honestly can’t believe the government left this age group out of the package. We would be the ones to go out and spend the money.
Straight into my index funds!
The amount that you receive is just a loan from your next years tax refund.
The rebates are tied to a reduction of the 10% bracket from 10% to zero for the first $6,000 of taxable income in 2008.
“I guess they need some legal basis to give a rebate check so that’s what they came up with,”
“That would be tied to the 2008 return. That’s similar to (the 2001 tax rebate),
so basically you would reflect the rebate check as sort of a prepayment on your 2008 return.”
George, it’s not really a loan – they are changing the way taxes are going to be computed so it is really a rebate on taxes you will pay next year. Calling it a loan implies that you have to pay something back, but the IRS has emphatically stated no one will have to repay the rebate.
Well, I guess since I am 18 and going to college as a dependant, I get nothing. This confuses me. I think people in my position would be more likely to go out and spend it than someone with an electric bill to pay.
im 21 and i filed my taxes
i was confused tho because noone is claiming me as a dependant but tachnically they CAN until im 24(i think). I know thats how it is with financial aid and earned income credit. So basically my question is..
if im 21 and noone is claiming me as a dependant, am i eligable? thx in advance
Brandon, If no one is claiming you as a dependent, then you will get the rebate. I believe parents can only claim you as a dependent if you are in college or they are otherwise supporting you. Just make sure you file taxes and earned the minimum required amount and you should receive the rebate.
Since I payed this year, will they send me the check or direct deposit it. Also, is there any way to check the status of it? In other words, can you periodically check to see if it has been sent yet, once they start sending them out?
Dave, You will probably receive your rebate check the same way you paid your taxes. If you mailed your tax payment, you will likely receive your rebate via the mail unless you gave the IRS your direct deposit information on your tax return. If you paid electronically, you will likely receive your rebate electronically.
I have a different situation that is confusing me. For example, if you filed taxes, but owed back child support and the government took your tax return to go toward that, will you still get the stimulus check or will they apply that toward the child support owed as well? Any information will help. Thanks!
Kali, The IRS has stated they will take the rebate checks if they are currently garnishing wages. If this happens, you will receive a letter regarding where the money went and why.
Here is some more info regarding the economic stimulus package: http://cashmoneylife.com/2008/04/21/economic-stimulus-rebate-frequently-asked-questions/
So if I worked full-time, yet my parents claimed me, will i get a stimulus check? I am 20.
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