Senate Passes Economic Stimulus Tax Rebate
Tip It!A week after the House of Representatives passed their version of the economic tax stimulus package, the Senate has passed their own slightly modified version. Overall, the Senate version is very similar to the House version, differing mainly in the extension of the tax rebate to low-income seniors and disabled vets.
Here’s the deal…
Single filers making less than $75,000 will get a $600 tax rebate and couples making less than $150,000 will get a $1,200 rebate. On top of this, parents will receive an additional $300 per child. On top of this, tax filers who do not owe income taxes but have at least $3,000 in income will get a $300 rebate.
According to Treasury Secretary Henry Paulson, the IRS will start sending out the checks in May.
Published on February 7th, 2008 - 14 Comments
Filed under: Economy, Taxes
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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February 8th, 2008 at 4:55 am
I have an AGI of around $55,000, after exemptions and the standard deduction my taxable income is around $30,000. At a 10% tax rate, that puts my tax at $3,000. But, I then get a tuition credit and child tax credit, which makes my tax due $0. So, do I qualify for the full $600/$1200? Or will it be reduced to the $300? I do have taxable income, but my tax owed is zero.
February 8th, 2008 at 6:39 am
From what I’ve read, I *think* you would get $300 ($0 taxes, but over $3,000 in earnings). assuming this to be true, consider yourself lucky, as I don’t think you would’ve have qualified under the House version.
Of course, I’m just basing this on what I’ve read, so I could be mistaken.
February 8th, 2008 at 8:20 am
I am starting to feel that nickel’s reading is mine too. I should have adjusted my taxes. I just barely did not owe anything, and I could have not taken a couple of small deductions to push it so that I owed a very small amount. I wonder if that would have worked? Oh well, I am not going to sweat it I guess.
February 8th, 2008 at 9:43 am
yes, but from which year are they going to get the AGI from? Is the (slow-poke) IRS REALLY going to get it from the 2007 returns filed in april and be able to turn around and send out checks in may?
or will they use 2006 data?
February 8th, 2008 at 9:56 am
I’m glad they finally made a decision on it. If I get a refund great. If not, I won’t sweat it.
February 8th, 2008 at 12:58 pm
Did you notice this: “The checks are an advance on next year’s refunds, and most, if not all of the money, will be deducted from taxpayers’ refunds in 12 months’ time”.
So, it’s nothing more than a refund-anticipation loan from the IRS. The best thing to do it just sign the back of the check, and send it right back!!
February 8th, 2008 at 3:40 pm
Information found at the US Treas page:
http://www.treas.gov/press/rel.....amples.pdf
I haven’t read anything yet about this is borrowing from future tax refund dollars, but I did notice this line in one article.
“Lawmakers waived so-called paygo rules requiring them to offset that expense with savings elsewhere in the budget to avoid adding to the deficit.”
Not that I am surprised.
February 8th, 2008 at 4:05 pm
For more on my earlier comment, please see the article
http://articles.moneycentral.m.....bates.aspx
February 8th, 2008 at 5:41 pm
I don’t agree that this is just giving us our own money. If I’m understanding correctly this is an advance on our 2009 refund however it’s also a new tax credit so the effect on your taxes will be a wash. If you turned around and sent it back to them then they would just turn around and send it back to you in 2009. When you do your 2008 taxes you will have to claim this rebate check like it’s income but it will be canceled out by the one-time tax credit.
February 10th, 2008 at 2:21 am
From everything I have read about this, it is not something that you even apply for. Is the IRS just taking information from 2007 taxes and then send out checks?
February 16th, 2008 at 4:43 pm
“Rebates” will be based on your 2007 tax return….so even people that normally woudn’t have to file a return should if they want the rebate.
It is not going to count as taxable income on next year’s return. You will have to inclue it as income, but there will be a tax credit just for ‘08 returns that will cancel out that part of your income (make it not taxable).
It will in no way affect your refund/amount owed on your 2008 tax return.
And yes, the IRS will just send out the rebates. There’s nothing you need to do to get it, other than file a 2007 tax return.
Source — I work for H&R Block
February 20th, 2008 at 12:19 am
If I am married with two children and I get $1200 back am I going to have to pay taxes on that money? Am I going to have to claim it as income? If so that will push me into another tax bracket and I can’t afford to pay the extra taxes that come with that. I have a hard enough time raising my kids with the cost of living these days.
July 2nd, 2008 at 10:05 pm
I show a negative income because of losses on avocodo groves I own, will I get a rebate chech
August 25th, 2008 at 5:05 pm
Date: August 25, 2008
I have heard that another stimulus check will be sent out too people which have already received one. Is it true?