2008 Economic Stimulus Checks – How the US Responded to the Great Recession

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Note: the section below was originally published in 2008 and covers the 2008 economic stimulus package. It has been updated for historical purposes and for usability. Please see this page if you are looking for information on the 2020 stimulus checks during the coronavirus outbreak. I’ve written about the economic stimulus rebate program a few…
Note: the section below was originally published in 2008 and covers the 2008 economic stimulus package. It has been updated for historical purposes and for usability. Please see this page if you are looking for information on the 2020 stimulus checks during the coronavirus outbreak.

I’ve written about the economic stimulus rebate program a few times on my site, but I continue to receive a substantial amount of stimulus questions in the comments of the articles I have written and via e-mail. Because I have received a lot of questions, I thought it would be good to put the majority of them in one place so I can refer people to the FAQ section – hopefully helping a lot of people while also reducing my workload.

Keep in mind, this information is gathered primarily from the IRS web page, and I am not a tax professional. So if you are in need of professional tax advice, please consult the IRS or tax pro.

What is the Economic Stimulus Package?

tax-forms.jpgThe economic stimulus package is a change in the tax code that will eliminate the 10% bracket from 10% to zero for the first $6,000 of taxable income in 2008. But the government decided to do this based on tax filer’s 2007 taxes so they could distribute this money so taxpayers would spend it now and (hopefully) boost the economy.

Who is Eligible for the Rebate?

The economic stimulus rebate check is available to qualifying taxpayers, based on IRS calculations. Single tax filers with adjusted gross income (AGI) less than $75,000 and couples filing jointly with AGIs less than $150,000 will qualify for full rebates. Those with AGI levels above the maximum will receive a reduced rebate based on a phase-out schedule.

Persons who do not owe income taxes, but earned at least $3,000 in wages, Social Security benefits, or veterans disability benefits, will get rebate checks of $300 for individuals and $600 for couples.

Who Will Not Receive an Economic Stimulus Check?

You will not receive an economic stimulus rebate in 2008 if:

  • Your net income tax liability is zero and your qualifying income is less than $3,000. To determine your qualifying income, add together your wages, net self-employment income, nontaxable combat pay, Social Security benefits, certain Railroad Retirement benefits and certain veterans’ payments.
  • You can be claimed as a dependent on someone else’s return.
  • You do not have a valid Social Security Number.
  • You are a nonresident alien.

Keep in mind, the calculation will be run again in 2009, so if your situation changes, you may be eligible to receive a rebate at that time.

How Much Money Will I Receive for the Rebate?

Qualifying single filers (AGI less than $75,000) will get rebates of up to $600. Qualifying couples (AGI less than $150,000) will get rebates of up to $1,200, plus $300 per dependent child younger than 17, with no maximum number of eligible children. 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.

I recommend using the official stimulus rebate calculator (calculator removed from IRS website) for a better idea of how much you might receive.

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.

What Do I Have to Do to Get My Rebate Check?

If you file taxes in 2007 and qualify for the rebate, it will be automatically sent to you. To receive the economic stimulus rebate, you are required to file a 2007 tax return, either a form 1040, 1040A or 1040-EZ. If you are someone who normally doesn’t file a tax return (for example, a pensioner, retiree, of someone whose income is based on Social Security, military veteran’s disability, or other income), you will need to file a tax return in order to receive the rebate.

Will I Receive My Rebate Check via Direct Deposit or by Mail?

Stimulus Payments will be directly deposited for taxpayers who select that option when filing their 2007 tax returns. Taxpayers who already filed and requested direct deposit won’t need to do anything else to receive the Stimulus Payment. Taxpayers who did not request Direct Deposit for their 2007 refund, or provide their bank information to the IRS if you paid taxes, will receive a paper check by mail.

The Official IRS Payment Schedule

This is a copy of the official stimulus payment schedule from the IRS web page, as of May 1, 2008. Economic stimulus payments will be issued according to the last two digits of the main filer’s Social Security number when the taxpayer files their tax return, and whether the tax filer chooses direct deposit or payment by check.

The IRS expects to send out 25% of the checks within the first few weeks and should have the majority of the rebate checks issued by mid-July.

For joint filers, the payments will go out based on the person listed first on the return. Payments will be made by either direct deposit or paper check, consistent with how people filed their 2007 tax return.

According to the IRS website, direct deposits will be made daily and will be completed by the date listed below (assuming your tax return was filed by the April 15 deadline):

Direct Deposit Schedule

Last two SSN digits: Payments will be transmitted no later than:
00 through 20 May 2
21 through 75 May 9
76 through 99 May 16

Paper checks will also go out based on the taxpayer’s Social Security number. For Social Security numbers ending in 00 through 09, the paper checks will be mailed starting May 9 and will continue through May 16. A similar process will be repeated in the following weeks.

Paper Check Schedule

Last two SSN digits: Payments will be mailed no later than:
00 through 09 May 16
10 through 18 May 23
19 through 25 May 30
26 through 38 June 6
39 through 51 June 13
52 through 63 June 20
64 through 75 June 27
76 through 87 July 4
88 through 99 July 11

Late filers. People who file a return after April 15 will receive their economic stimulus payment, but probably about two weeks later than the schedule shows. Since it normally takes the IRS about 2 weeks to process most tax returns, it should take about a month to receive your rebate check. A tax return must be filed by October 15 in order to receive a stimulus payment this year.

Keep in mind, this is a rough schedule – the Treasury is processing over 130 million rebates!

The Official IRS Rebate Calculator

The web-based stimulus rebate calculator is easy to use and takes about 5-10 minutes to complete. You will need a copy of the Form 1040 that you filed with the IRS. Then, follow the instructions. Don’t worry, the IRS doesn’t ask for any personal data such as your SSN, nor does it store any of your information when you use the calculator. All entries are erased when you exit or start over. Keep in mind, this is only an estimate, and is not “official” until you receive the check.

Where’s My Stimulus Payment? – The Official IRS Rebate Tracker

The IRS created a web-based tool to help you track the status of your economic stimulus rebate. You will need to have your tax return handy because you will need to input some key information from your return, including your SSN, filing status, and the number of exemptions. The tool will locate your information in the database and give you the status of your rebate.

Important note about rebate tracker: The IRS recommends using the Payment Schedule prior to using the payment tracker since your payment information will not be available on this tool until the time that your payment is scheduled.

I Received My Tax Refund on a Prepaid Debit Card – Will My Stimulus Rebate Check Come the Same Way?

Those who received their tax refund on a prepaid debit card from a tax preparation company will receive their rebate by mail. They will receive a check sent to the address on their return. Refund anticipation loans for the stimulus check are not allowed by the IRS.

What if I Earned More Than the Maximum Income?

If you earned more than the maximum, you may still be eligible for a refund check. However, it will be reduced by 5-percent of the amount you earned above the AGI income cap of $75,000 for a single filer or $150,000 for couples. The rebates will follow this formula until it phases out, and those earning above the phase-out level will not receive a rebate check.

For singles, the phase-out level begins at $75,000 and ends at $87,000, with a reduction of $50 for every $1,000 earned over $75,000. If you earn above $87k, you will not receive a rebate.

For couples, the phase-out level begins at $150,000 and ends at $174,000, with a reduction of $50 for every $1,000 earned over $150,000. If you earned above $174k, you will not receive a rebate.

Will I Receive the Economic Rebate if I am Someone’s Dependent?

If you are over 17 and are a dependent, neither you or your parents will receive a rebate, even if you earned enough money to qualify for the rebate. This will affect many high school and college-age workers who worked last year and earned the minimum amount to receive the rebate.

However, keep in mind, the rebate is based on your 2008 income, and the rebate calculation will be run again when your taxes are due in 2009. So if your dependent status changes between now and the time you file taxes next year, you may still receive the rebate in 2009.

If you filed your tax return by the April 15th deadline, you will receive your rebate check automatically starting May 2. For those who elected to receive their rebate check via electronic deposit, checks will begin being sent by the IRS on May 2nd. For those who will receive their check via mail, the checks will be sent starting May 16. If you filed your taxes late or filed for an extension, you may not receive your rebate check for several weeks after you file, and there have been some reports that it may take several months to receive your rebate.

I Did Not Receive the Economic Stimulus Rebate Letter in the Mail. Will I Still Get the Rebate?

Yes, you will. The letter was only sent out to remind people what was happening and to explain when the rebate checks will be sent. The rebates will be sent automatically, so there is nothing you need to do to receive your check.

What if I Moved?

To ensure you receive your rebate, you will need to file a Form 8822 with the IRS and a change of address notice with the U.S. Postal Service. This will ensure your check is sent to your new address. Without your current address, the check could be returned to the IRS as undeliverable. You would still get it, it would just take longer because it would have to go through the IRS system.

How Does the Rebate Affect My Taxes in 2009?

There is some misconception about the stimulus package; it is not a loan on your 2009 taxes. You do not pay it back. The IRS eliminated the 10% bracket for the first $6000 of taxable income (AGI). The rebate is a credit to reflect the new tax laws.

If you did not qualify for the rebate based on the taxes you filed in 2008, but your situation changes when you file your taxes in 2009, you may be eligible for the difference if it is in your favor. If the change is not in your favor, you will not have to pay the difference.

I Am Having My Wages Garnished by the IRS. Will this Affect My Rebate Check?

It may. If it does, the IRS will send you a notification letter explaining where the money went and why. Some examples of this could be past due taxes, student loans, wage garnishments, or child support. If you have further questions, contact the IRS.

Can I Use the Money from the Rebate Check for Whatever I Want?

Yes, you can. Once the money is sent to you, it is yours to do with whatever you want (though if you have legal obligations to take care of, you might want to do that). I ran an economic stimulus poll on my site regarding how readers plan on using their rebate checks. This is a completely unscientific poll, but over 500 people have responded. So far, over 40% of the responses indicate the reader will use the rebate check to reduce debt. Saving/Investing follows that with 31%. Feel free to leave your vote if you haven’t already!

I Filed for an Extension on My Taxes. Will I Still Receive the Rebate?

Yes. The rebates are based on taxpayers’ 2007 tax returns. Those who file extensions or file late would likely receive their checks later than regular filers, a U.S. Treasury spokesman said last week. The checks will be sent out automatically; taxpayers don’t need to apply.

Can I Check the Status of My Rebate with the IRS?

You can easily check the status of your rebate at the IRS website. The IRS created a web-based tool to help you track the status of your economic stimulus rebate. You will need to have your tax return handy because you will need to input some key information from your return, including your SSN, filing status, and the number of exemptions. The tool will locate your information in the database and give you the status of your rebate.

Important note about rebate tracker: The IRS recommends using the Payment Schedule prior to using the payment tracker since your payment information will not be available on this tool until the time that your payment is scheduled.

My Rebate Was Lower Than it Was Supposed to Be!

There could be several reasons, such as the amount of taxable income you earned, any back taxes or other obligations that may have been owed the IRS, or something else. Also, if your primary form of income was from Social Security or Veterans Disability, it is likely you will only receive $300.

I recommend using the official stimulus rebate calculator, then contacting the IRS if the numbers are different. Good luck.

Is My Rebate Check Taxable?

No! 🙂

Will There Be Another Stimulus Check?

There have been a lot of questions regarding another stimulus check. The US Government passed a second economic stimulus package called the American Recovery and Reinvestment Act of 2009, which included a variety of payroll tax deductions for individuals, and an assortment of tax cuts targeted to businesses and corporations. You can learn more here.

Over 5 Million Unclaimed Economic Stimulus Checks

There are currently over 5 million unclaimed economic stimulus checks being held by the IRS. The majority of the unclaimed economic stimulus checks belong to people who do not normally file income tax returns, such as people whose sole source of income is Social Security or veteran’s benefits. One of the factors causing a large number of unclaimed stimulus checks is getting the information out to people who normally do not file taxes. If you know anyone who may be in this situation, please do them a favor and let them know they might be eligible for a rebate.

Besides people who don’t normally file income taxes, there are others who have not yet received their economic stimulus check.

How to Claim Your Economic Stimulus Check

Your rebate check should have automatically been sent to the address you used when you filed your taxes. If you haven’t yet received it, try these tips:

Use the official stimulus payment tracker. The first thing to do is try using the official stimulus payment tracker on the IRS web site. Input the information that is on your tax return, and follow the step by step instructions. You should find out where your rebate is.

Direct deposit or paper check? A lot of people who signed up for direct deposit, but used a third party tax preparation company such as TurboTax or TaxCut will receive paper checks because of a compatibility issue with the IRS software. This caused a lot of delays in people receiving their rebate checks. Taxpayers who received their refund on a prepaid debit card from a tax preparation company will receive their rebate by mail. Taxpayers who did not request Direct Deposit for their 2007 refund or provide the IRS their bank information when they paid taxes will also receive a paper check by mail.

Be patient. Keep in mind the stimulus checks can take up to 6 weeks to arrive, so it is possible the check is in route. If more than 6 weeks have passed since you were supposed to receive your rebate, go to the next step.

Contact the IRS. If that doesn’t work, try contacting the IRS at 1-866-234-2942. Again, be patient. IRS workers are receiving hundreds of calls daily, and need time to process your information. You will get much better results if you are friendly with the agent handling your claim.

Other Reasons You May Not Have Received Your Economic Stimulus Rebate

You moved. The IRS does not allow rebate checks to be forwarded. If you moved between the time you filed your tax return and the time the economic stimulus rebate check, you will need to file a Form 8822 with the IRS and a change of address notice with the U.S. Postal Service. This will ensure your check is sent to your new address. Keep in mind there may be additional delays while the IRS processes your new information.

Your rebate check was garnished. By early June, the IRS garnished over $840M through the Treasury Offset Program. Since not all checks have been processed yet, that number may be closer to $1B in total garnishments. Your check may be garnished if you owe money for unpaid taxes, student loans, or child support. Taxpayers on a scheduled payment plan are not affected by the Treasury Offset Program. If your money was scheduled to be garnished, you should have received a notice.

You filed your taxes late. The IRS will continue processing stimulus checks through.. of this year. The rebates are based on taxpayers’ 2007 tax returns. Taxpayers who file extensions or file late should receive their checks later than regular filers. The checks will be sent out automatically; taxpayers don’t need to apply. You may receive your rebate as soon as 2 weeks after filing, but it may take up to six weeks to process your rebate check. A return must be filed by October 15 in order to receive a stimulus payment this year.

More Information About Missing Money

More information about unclaimed money: States keep track of unclaimed money with the intent of returning it to its rightful owner. It is free to search the state databases and free to make a claim if you find money or assets that are rightfully yours. Keep this in mind if anyone ever offers to help you claim money that is yours. Read more about how to find missing money.



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About Ryan Guina

Ryan Guina is the founder and editor of Cash Money Life. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is a current member of the IL Air National Guard.

Ryan started Cash Money Life in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about military money topics and military and veterans benefits at The Military Wallet.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free account here.

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Comments

  1. Gary Carroll says

    I did not earn $3000 in 2007, so did not receive a stimulus check.
    I earned a little over $3000 in 2008. Will I be eligible for a check in 2009?

    • Ryan says

      Hi Gary, I believe you might be eligible, however, you will need to file a tax return. The IRS should automatically send you a stimulus check based on your 2008 tax return if you were eligible. For questions about your specific situation, I recommend contacting the IRS or a tax professional.

  2. robert & mary jones says

    my husband and i both both are disabled we draw ss and we did get a one time check. so i was wonderind are we going to get economic check, since we don’t file taxes.

    • Ryan says

      Robert and Mary: Here is an article from the Social Security Website: Social Security’s One-Time Economic Recovery Payments Information Page. You should be eligible for a one time $250 payment. Best of luck to the both of you.

  3. Ryan says

    Thank you for stopping by, but these comments are now closed. This article is in reference to the economic stimulus check that went out in 2008.

    There was no economic stimulus check mailed out in 2009; the 2009 Economic Stimulus Personal Tax Breaks included withholding fewer taxes from paychecks during 2009.

    If there are issues or questions regarding the economic stimulus, please contact the IRS.

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