Okay, so I’ve been investigating this Economic Stimulus package to find out whether I’m going to get any extra money from the government this summer. I’ve searched a lot of websites to determine whether I’m eligible to receive a check and how much they’re going to pay out. Here are a few interesting things that I learned.
First, I learned that some people are not eligible for the “stimulus payment.” According to the IRS’s website, you won’t get a stimulus payment in 2008 if any of the following apply to you:
You don’t file a 2007 tax return.
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. For example, this would include a child or student who can be claimed on a parent’s return.
You do not have a valid Social Security Number.
You are a nonresident alien.
You file Form 1040NR or Form 1040NR-EZ, Form 1040PR or Form 1040SS for 2007.
As to the amount of the stimulus payment, it will be up to $600 for a single person, $1,200 for a married couple that files jointly and $300 for each additional kid in your household that has a Social Security number. (One website said the payment limit is two kids — or $600 — but I didn’t find that anywhere else, so who knows.)
Since this “rebate” is an advance for a new credit which will be included on the 2008 1040 income tax form, it will not affect your 2007 taxes. In April 2008 (this year for 2007’s tax settlement), you will receive what you are owed or you will have to pay what you owe as if the rebate never occurred. This summer you will receive the rebate for the 2008 credit in a separate check (or direct deposit if you choose).
In April 2009 or thereabouts, when you file your taxes for 2008, the IRS will run the calculation for the stimulus rebate credit again. If the results show that you would have received more (due to an additional child, for instance), you will be sent the difference. If your results show that you would have received a smaller rebate, then you get to keep the difference. This is an additional credit. You do not have to pay back to the IRS what you will receive this summer. Receiving this advance will not reduce next year’s refund nor will you owe more federal tax.
Click here to access a very useful calculator that helps you to see how much you’ll likely be getting. You’ll need to have a few numbers from your 2007 Tax Return to use this calculator.
For more details on the IRS’s website, click here.
In another post, I’d like to discuss what the stimulus package means for our economy, what I think about it on principle, and how I may spend (or save) any money I get from it.