Here's the skinny on the economic stimulus tax rebates.
For most people it's a no-brainer, but people who do not normally file a tax return because they primarily receive untaxed Social Security benefits or their income is too small must take special action.
That's because the IRS will use information from returns now being filed to distribute the stimulus checks authorized earlier this year by Congress.
It's automatic. The good news is that people who normally file tax returns won't have to do anything. The IRS will calculate your rebate, notify you that it's coming, and either send a check or directly deposit the money into your bank account.
"You do not have to do any computations or fill out any additional forms," says IRS spokesman Eric Smith. "Just file your 2007 return."
Nonfilers. People not normally required to file have to do more so they're on record to get a rebate. They can file a partial return for 2007, filling in a few entries on a 1040A and writing "Stimulus Payment" across the top.
The IRS is mailing an information package to people it figures may be nonfilers eligible for a stimulus check. The package (1040A-3) is also available online at www.irs.gov and includes special instructions and a blank 1040A.
How much. The IRS estimates that payments will start going out in early May, in amounts generally ranging from $300 to $600 for individuals and up to $1,200 for couples filing a joint return—plus up to $300 more for each dependent younger than 17.
Nonfilers who may qualify for a $300 payment ($600 on a joint return) include seniors who receive Social Security benefits of at least $3,000 a year and workers who earn at least $3,000. Certain recipients of railroad retirement benefits, veterans' benefits, and military combat pay may also be covered.
Your specific amount may depend on your income, the amount of tax you pay, and other factors.
Couples with over $150,000 in adjusted gross income and individuals with income over $75,000 lose out since the stimulus bonus begins to phase out when income hits those amounts.
Not your refund. The IRS is concerned that stimulus checks will be confused with typical refunds. "People will get their refund and then this extra payment," Smith says.
For tax geeks. The stimulus check is a technically a rebate of 2008 tax but for expediency is based on your 2007 return. That means you may get another shot at the rebate when you file your 2008 return next year.
If, for example, your 2007 income is above the phase-out point but drops below it in 2008, you may be able to recover part of rebate disallowed this year.
If you have more dependents in 2008 than in 2007, you can seek an additional amount when you file your 2008 return.
The IRS is developing a worksheet to guide people through this when they file for 2008.
A change in your situation this year that would reduce your eligibility for a rebate? You will not have to pay back what you got based on your 2007 situation.
Help! The IRS website has lots of information to help people through the thicket, including a calculator to figure their coming rebate and a schedule of when payments are to go out, based on the last two digits of taxpayers' Social Security numbers and other factors.
Volunteer groups that assist older and low-income people are geared up to help. Some tax preparers, reached through the IRS website, offer free online preparation of rebate requests.
Why delay? The standard April 15 deadline doesn't apply when filing a return just to get the rebate, but doing so will get you in line for the payment. The IRS says that to get a check this year, you must file no later than October 15.