2008 IRS Econimic Stimulus Payments

2008 IRS Econimic Stimulus Payments

2008 Economic Stimulus Payments
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 2008 IRS Economic Stimulus Payments
Starting in May, the Treasury will begin sending Economic Stimulus payments to more than 130 million individuals. These stimulus payments will continue to be disbursed through late spring and summer.
For the vast majority of taxpayers, the only thing you must do is file a 2007 income tax return in order to qualify for your stimulus payment. If you opted for direct deposit on your 2007 tax return, your stimulus payment will be direct deposited to the same banking information as your 2007 tax refund. If you opted to have a check mailed to you for your 2007 refund, your stimulus payment will be mailed to you.

Basic Eligibility
The IRS will utilize the 2007 tax return to determine eligibility and to calculate the basic amount of your stimulus payment. In most cases, the payment will equal the amount of tax liability on your return with a maximum amount of payment being $600 and a minimum of $300 for individuals filing as Single/Head of Household. Joint/Married filers payment will equal the amount of tax liability on your return with a maximum of $1200 and a minimum of $600.
(Your total tax liability can be found on line 63 of Form 1040, line 37 Form 1040 A, or line 10 on Form 1040 EZ for 2007)
Individuals who might not otherwise be required to file a 2007 tax return will need to file a return this year to receive the stimulus payment. The return must show at least $3,000 in qualifying income.
So, low-income workers who had at least $3,000 in earned income in 2007 but do not otherwise earn enough to be required to file a federal tax return need to file a return in order to get the stimulus payment. The same rule applies to Social Security, veterans and retired railroad workers who otherwise would not file a tax return, must in order to receive their stimulus payment.
Normally, certain Social Security, Railroad Retirement benefits and certain veterans' payments are not subject to income tax. However, the economic stimulus law passed in February contains a special provision allowing Social Security recipients and recipients of certain veterans' benefits and certain Railroad Retirement benefits to count those benefits toward the qualifying income requirement of $3,000 and thereby qualify for the stimulus payment.

Limitations
Individuals who can not claim their self exemption on the 2007 tax return will automatically be ineligible for the stimulus payment.
Individuals who pay no tax and who have less than $3,000 of qualifying income will not be eligible for the stimulus payment.
To be eligible for a stimulus payment, taxpayers must have a valid Social Security Number. Anyone who does not have a valid Social Security Number, including those who file using an Individual Taxpayer Identification Number (ITIN), an Adoption Taxpayer Identification Number (ATIN) or any other identification number issued by the IRS are NOT eligible for this payment. Both individuals listed on a married filing jointly return must have valid Social Security Numbers to qualify for a stimulus payment.
Eligibility for the advance payment is subject to maximum income limits. The payment amounts will be reduced by 5 percent of the amount of income in excess of $75,000 for individuals and $150,000 for those with a Married Filing Jointly filing status.

Additional Payments for Taxpayers with Qualifying Children
Parents and anyone else eligible for a stimulus payment will also receive an additional $300 for each qualifying child (subject to income phase-outs). To qualify, a child must be eligible under the Child Tax Credit and have a valid Social Security Number.
Any taxpayer who is not eligible for the basic payment amount due to the phase-out provision or any other exception will not be eligible for this additional amount for children.

Notice from the IRS
Most taxpayers will receive two notices from the IRS. The first general notice from the IRS will explain the stimulus payment program. The second notice will confirm the recipients' eligibility, the payment amount and the approximate time table for the payment. Taxpayers will need to save this notice to assist them when they prepare their 2008 tax return next year.
Anyone who moves after they have filed their 2007 tax return should notify the IRS by filing Form 8822, Change of Address, and also notify the Post Office.

Exclusions
Individuals who file Form 1040NR, 1040PR, or 1040SS are NOT eligible for stimulus payments. These returns are normally filed by Nonresident Aliens, residents of Puerto Rico and residents of the U.S. Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands (CNMI). Residents of U.S.possessions will be receiving their rebates directly from the possessions.

Future Form Will be Available
The IRS will release a special filing form for users who are NOT required to file a tax return but are filing in order to receive their stimulus payment. More information will be available from the IRS in the near future.
NOTE: OnLine Taxes will support this new available form and all users filing with it will be able to do so free of charge.

For more information on the Economic Stimulus Payments, you may visit the IRS site.

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