Breaking Down The Details Of The 2008 Economic Stimulus Plan and Your Tax Rebate Check
Updated! With both the U.S. House of Representatives and the Senate having nodded their respective approvals of the nearly $160 billion economic stimulus package (that’s “B’ as in Billion), the bill has finally been signed, sealed, and delivered to President Bush for final approval. The President has already indicated that he will quickly sign the economic aid into law - so I believe the rebate checks will soon be on their way to a mailbox or direct deposit account near you.
I shall try to explain how the 2008 economic stimulus package will work and how much you can expect to receive in the way of a rebate check.
1) Why Are We Getting A Tax Rebate Check?
The Tax Rebate Check is part of the U.S. government’s emergency pro-growth economic stimulus plan to prevent the U.S. economy from stalling out and entering a period of prolonged recession. Due to the recent slowdown in the economy caused by housing bubble problems and subprime mortgage related issues, the federal government wants to keep the economy on the up and up by putting money into the hands of U.S. consumers to encourage increased consumer spending. Like jump starting a car, the government wants to hand consumers extra wads of cash to encourage increased business investment and consumer activity. Surveys have indicated that at least half of consumers intend to use the money to pay down existing debt, while the other half intends to either save or spent it on extra things. Personally, I plan to save my economic stimulus check if I qualify for one. While the stimulus plan also provides some business incentives, I will only focus on the consumer side tax rebate checks at this time.
2) How Does Qualifying For And Receiving A 2008 Tax Rebate Check Affect And Relate To My 2007 and 2008 Tax Returns?
The economic stimulus tax rebate is counted as a tax credit against your future 2008 tax bill. However, you are entitled to the full qualified rebate amount when you file your 2007 tax return by the April 15, 2008 deadline. Qualification to receiving it now will be based on your 2007 income information. Taxpayers should not be concerned that the tax rebate is only a mere future credit that has been accelerated into the present in terms of timetable. The economic stimulus tax rebate is a true credit for qualified taxpayers (free money essentially). The rebate amount that you receive now will not be used to offset any of your future income tax bill or any anticipated refund checks from filing your future 2008 tax return on April 15, 2009.
The economic stimulus plan is flexible and permits taxpayers to either file their tax return on April 15, 2008 and get their rebate checks now (the preferred route), or wait till April 15, 2009 to file their 2008 tax return and get their rebate checks then. Note that even if you file now and qualify for a rebate check, and your status changes and you become eligible for a larger rebate when you file your 2008 tax return next year, you can still claim the positive difference at that time. In addition, you will not have to give back any rebate money already received even if your status change causes you to later qualify for a lesser amount for tax year 2008 when you file in 2009.
3) Who Will Get A Tax Rebate Check and How Much Will I Receive?
The economic stimulus tax rebate checks are intended to go into the hands of low to middle income Americans (those who are supposedly more inclined to spend them immediately). Thus while most ordinary taxpayers will qualify for a stimulus check, those who make a lot of money are likely to be partially or fully phased out of receiving a rebate.
The amount of your tax rebate will be based on your 2007 federal income tax return’s adjusted gross income (AGI), which is not just your annual salary. Your AGI includes all income sources including wages, salaries, tips, interest, alimony paid to you, and dividends, offset by any specific business, or capital gains or losses - but it does not include the personal exemption, or any standard or itemized deductions. You are entitled to receive the full rebate amount unless your adjusted gross income exceeds a certain threshold, in which case you will either receive a reduced rebate or be entirely excluded from receiving one at all if your income is simply too high. However, the economic stimulus package is intended to cover many people and nearly 130 million Americans are expected to qualify for at least part or all of their entitled tax rebate check.
The proposed plan that is expected to be approved will provide one time check rebates of up to $600 for individuals or $1,200 for couples, along with an additional $300 for each child (classified as dependents under the age of 17). Low income people, including retirees on Social Security or Veterans disability benefits who earned at least $3,000 will receive checks of $300. Low to middle income people including retirees who made enough to pay taxes will receive higher tax rebates up to their net tax liability, limited only by their AGI. But so long as you paid taxes and made ($3,000 or more a year but less than $75,000 as a single individual), or ($3,000 or more, but less than $150,000 a year as a married couple), you will be entitled to the full tax rebate check.
If you exceed the adjusted income threshold, you may still get a rebate, but it will be reduced by 5 percent of the amount you earned above the adjusted gross income limits of $75,000 for single filers and $150,000 for couples. Thus for example: A single filer with no children and an adjusted gross income of $80,000 ($5,000 over the limit), will see his or her rebate check reduced by $250 (5% of $5,000), and will receive a check for $350, instead of the full $600. Rebate checks will phase out completely for single filers who earn over $87,000 and for couples who earn over $174,000.
| Single Individuals (AGI) |
Qualify For A Rebate Check? |
| Less Than $3,000 (must be earned income) |
No |
| ($3,000 - $75,000), but DID NOT pay taxes | Yes - $300, plus extra for each child |
| ($3,000 - $75,000), but DID pay taxes | Yes - $600, plus extra for each child |
| (Over $75,000 - $87,000) | Yes - But for income that exceeds $75,000, your rebate will be reduced by 5% (in $1,000 increments), plus extra for each child |
| Over $87,000 income | Maybe - You have been phased out, but can still get rebates for your child |
| For Each Child You Have | Additional - $300 per child |
| Married Couples (AGI) |
Qualify For A Rebate Check? |
| Less Than $3,000 (must be earned income) |
No |
| (3,000 - $150,000), but DID NOT pay taxes | Yes - $600, plus extra for each child |
| ($3,000 - $150,000), but DID pay taxes | Yes - $1,200, plus extra for each child |
| (Over $150,000 - $174,000) | Yes - But for income that exceeds $150,000, the rebate is reduced by 5% (in $1,000 increments), plus extra for each child |
| Over $174,000 income | Maybe - As a couple, you’ve both been phased out, but can still get rebates for your child |
| For Each Child You Have | Additional - $300 per child |
4) Who Is Excluded From Receiving An Economic Stimulus Rebate Check?
If you are a single individual who earned more than $87,000, or if you are a married couple that earned over $174,000 for the year, you are likely excluded from receiving a rebate check, unless you can otherwise claim any extra child rebates. Keep in mind that the child rebates can also be phased depending on how much your adjusted gross income exceeds the income threshold.
If you’re a young college student who had earned income for 2007 but are claimed as a dependent under your parent’s tax return, you are ineligible for the tax rebate as well.
Under the Senate approved proposal, illegal immigrants will also not be eligible to receive tax rebate checks for obvious reasons.
5) What Do I Have To Do To Get My Tax Rebate Check?
To get your tax rebate check now, you must file your 2007 federal tax return (either a form 1040 or 1040 EZ) by the April 15, 2008 filing deadline. Or you can wait until April 15, 2009 to file your 2008 tax return and obtain it then (although, why would you want to wait until then?). I recommend using a low cost online tax preparation program such as Turbo Tax or Tax Cut to assist you (both are reasonably priced and provide accurate results). Even if you don’t usually file a tax return because you don’t earn enough to owe taxes like some retirees or veterans on disability, you will still need to file a 2007 tax return in order to receive the economic stimulus check.
6) When Can I Expect To Receive My Tax Rebate Check?
The Internal Revenue Service (IRS) intends to start issuing the rebate checks starting May 2008 to qualified recipients who properly and timely submit their tax returns by the April 15, 2008 filing deadline. If you miss the annual tax filing deadline or request a filing extension, it is possible you won’t receive your rebate check until the end of the year (thus I suggest you file by April 15, 2008 - mark it on your calendar and circle it!)
7) Where Can I Get More Information About The Tax Rebate?
To get official answers to your tax rebate concerns and queries, you should check the official IRS website link on the subject. Please take a look at my post on obtaining official Answers To 2008 Tax Rebate Questions. For an unofficial response however, you can try posting your comments or questions here.
Updated Note: The IRS has released the official Tax Rebate Payment Schedule.
February 16th, 2008 at 9:49 pm
If we owe for our 2007 taxes, will we still receive a tax rebate check?
February 16th, 2008 at 10:48 pm
I presume by “we” that you represent a married couple. Do you have any kids that can qualify you for the additional child tax rebate?
But to address your question, because you made enough in 2007 to pay taxes, you WILL receive a tax rebate check, but any rebate will be reduced by any phaseouts of your adjusted gross income that exceed $75,000.
February 17th, 2008 at 3:41 pm
IF YOU ARE ON SS DISABILTY AND RECIEVED LESS THAN 9000.00 AND WORKED AND ONLY EARNED 1500 DO YOU STILL QULIFY, OR DO YOU HAVE TO EARN 3000.00 ABOVE SS
February 17th, 2008 at 5:50 pm
Ordinarily, your Social Security income would not be taxable as it is currently below the taxable threshold. But the economic stimulus law contains a special provision allowing Social Security and disability recipients to count those benefits towards the qualifying income requirement of $3,000. Thus under the terms you’ve provided, you ARE qualified to receive a stimulus payment.
But because you won’t need to pay taxes on your benefits or earned income, you will only be entitled to the lower $300 rebate rather than the higher $600 amount.
See this IRS Publication for more information.
February 19th, 2008 at 8:02 am
If I am dependent of my parent yet i worked and made more than $3000, and 19yrs old. Would I qualify or my parents received it?
February 19th, 2008 at 8:53 pm
If your parents filed taxes and claimed you as a dependent for tax purposes, you are disqualified from receiving a tax stimulus check even though you had earned income in 2007 that exceeded $3,000.
However, if you are merely dependent on your parents for some financial support and they DID NOT claim you as a dependent for TAX purposes, then you may be entitled to a rebate.
February 24th, 2008 at 6:47 pm
I was informed by an accountant that if I received a $1,200.00 Bush rebate in 2008 and I am entitled to received a $2,000.00 refund in 2009, the IRS will deduct my 2008 $1200 dollar Bush rebate from their 2009 refund resulting in a actual refund of $800.00. Is this correct?
February 24th, 2008 at 8:10 pm
There is much confusion on this tax matter and understandably so. I will try to explain.
To clarify, the 2008 economic stimulus rebate that we are all applying for by this year’s April 15, 2008 filing deadline is based on 2007’s tax return. However, it is actually a sort of “modified” credit towards your future 2008 tax return. If your income and tax situation doesn’t qualify you to receive the rebate this year in 2008, you are permitted to file and qualify for it again in April 15, 2009 when you file your 2008 tax return.
The advice your accountant provided you appears to be incorrect. My understanding is that if you receive a stimulus check this year, the IRS will not offset it later on in 2009 when you file your 2008 tax return even if for example, your life situation changes and thereby entitling you to a lesser stimulus rebate amount had you waited until 2009, when you filed your 2008 return.
Thus, to address the specifics of your situation: The IRS should not deduct your $1,200 stimulus rebate check amount from your $2,000 tax refund filed in 2009 arising out of your 2008 tax return. If your tax rebate stimulus check was only a mere offset of your future tax return, it would be nothing more than a mere loan. But Bush’s economic stimulus checks are true tax rebate credits.
February 25th, 2008 at 9:49 am
I F I HAVE A DEBT WILL THIS REBATE CHECK BE OFFSET IN ANY WAY?
February 25th, 2008 at 3:23 pm
Ordinary debt, such as credit card or even mortgage debt, has nothing to do with entitlement to the 2008 economic stimulus rebate check. As long as you pay taxes and have adjusted gross income that is within the threshold amounts, you will receive a rebate.
February 26th, 2008 at 8:46 am
Just a quick question, I am a homemaker and my husband made 42,000 this year. Would we get the 1200 plus kids , or would it be 600 plus kids? Also we filed in January would we still receive it in may?
February 26th, 2008 at 1:42 pm
Based on the details you’ve provided, I presume you and your husband filed your tax return as “married filing jointly” and that the $42,000 amount was the adjusted gross income (AGI) amount. I am also presuming that you and your husband ultimately owed some taxes on the return.
In that case, it appears you will be entitled to the full $1,200 rebate plus an additional $300 for each child you have. You fall within the qualification threshold. Having filed your tax return in January and before the April 15 deadline, you are on track to receive your full economic stimulus tax rebate check by the projected May estimation.
February 28th, 2008 at 5:51 pm
It says dependents under 17 years of age not 17 and under. I have a brother that is 17 so does that mean my mother wont get the extra dependent money?
February 28th, 2008 at 6:28 pm
But, yes, unfortunately your statement is correct. Because your brother is already 17, he cannot be classified as an under 17 child dependent for tax rebate purposes. Your parents will not be entitled to the extra child dependent credit of $300 when it comes to him.
February 28th, 2008 at 7:55 pm
I’m in the Maybe Category. AGI over $174,000 with 3 kids under 17. Will I get $900 for the kids or is it a partial payment?
February 28th, 2008 at 8:25 pm
Running some quick math on my trusty calculator here, I would say that if your AGI exceeds $174,000 by $18,000, your 3 child rebates would be phased out completely as well.
You did not list your exact AGI information, but if your adjusted gross income is more than $192,000, you won’t be entitled to the full Bush tax rebate.
February 29th, 2008 at 10:04 pm
My husband and I filed bankruptcy 11/2007. We rec’d a discahrge 02/2008. Will we have to return the 2008 rebate check??
February 29th, 2008 at 10:53 pm
Just a little disclaimer that bankruptcy law is not my legal background. But based on my understanding, since you filed for bankruptcy protection in 2007 when you were not yet due the tax rebate, and presumably since the estate trustee has made no effort to claim the rebate prior to discharge, you should be able to keep the full tax rebate amount.
March 3rd, 2008 at 5:00 am
This stimulus package discriminates against the very people who need it the most.People who are on SSI don’t qualify for some stupid reason…..aren’t they citizens also….
March 3rd, 2008 at 7:11 am
The economic stimulus package passed because of compromises in the Senate that expressly mandated the inclusion of Social Security income recipients into the mix of those who will qualify for the tax rebate. Although Social Security generally isn’t high enough by itself to qualify as taxable income because it doesn’t exceed the base income threshold, Bush and Congress are allowing the amount to factor towards the tax rebate calculation I’ve outlined in the chart above. I think they clearly are not being discriminated against, despite the way you’ve described.
March 3rd, 2008 at 8:27 am
I’m a single parent of two and self employed and my (AGI) was 12,704 do I qualify for the Stimulus Rebate Check. and I paid self employment taxes of $1931.00
March 3rd, 2008 at 1:21 pm
Based on the information you’ve provided and presuming the accuracy of the numbers - you will be entitled to a tax rebate check of $1,200. This includes $600 for your single filing status with taxes paid, and two sets of $300 for your children.
Even if your filing status was Head Of Household rather than single, do note that for tax rebate purposes, Head of Household is being treated the same way as filing single. Thus, if your filing status is anything other than “married filing jointly”, the adjusted gross income limit for rebate purposes is generally $75,000.
You are precisely who the economic stimulus plan was designed to target. Remember to spend/save the amount wisely when you receive the check in May. That’s the anticipated tax rebate check delivery date.
March 3rd, 2008 at 2:03 pm
I’m still a little confused on the SS aspect of the rebate. My wife & I had only $2760.00 of earned income, $1500.00 IRA withdrawal & our Social Security. However our SS doesn’t even show on our tax return because the worksheet says it isn’t high enough to be taxable. ??
March 3rd, 2008 at 2:18 pm
Entitlement to the economic stimulus tax rebate is something the IRS will calculate for you. Your job is just to make sure you filed timely and with accurate data.
Your Social Security income, although not considered taxable because it’s below the threshold test, will still be factored by the IRS towards tax rebate qualification. My understanding is that the IRS will match your total Social Security benefits to you and apply it towards the tax rebate qualification test to see how much you are entitled to despite the information not being expressly reflected on your personally filed income tax return forms.
March 3rd, 2008 at 6:36 pm
Me and my husband file MFJ. We have AGI over $174,000. We claim both of my parents as dependents. They are retiree over 70 yrs old and live on SS, with income less than $3000. Are our parents qualified for a tax rebate? How would it affect our tax return?
March 3rd, 2008 at 6:45 pm
Unfortunately, because your dependent parents are not classified as children under the age of 17, you and your husband will not be able to claim them for the extra child tax rebate for economic stimulus plan purposes.
Additionally, because your retiree parents do not have at least 3,000 in earned income (which for economic stimulus plan purposes also includes all otherwise non-taxable Social Security benefits), they do not satisfy the minimum threshold of $3,000 for tax rebate entitlement.
March 3rd, 2008 at 7:10 pm
My husband and I filed chapter 13 bankruptcy in Jan. 2008. Will we be able to
keep our rebate?
March 3rd, 2008 at 8:02 pm
This is a very good legal question for which I have no solid definitive answer. It is an issue that may have to be advised and litigated by your attorney as he or she so chooses.
The first step is to determine the position that your Chapter 13 bankruptcy trustee intends to take. The case would be moot obviously if he or she chooses to deem the economic stimulus tax rebate as an exempt asset from trustee control.
However, in my opinion, I think the tax rebate amount will likely have to be sent to the trustee unless it was exempted at filing. Since the tax rebate was not signed into law until February 2008, the rebate could not have been exempted at the time of Chapter 13 bankruptcy filing. Any such tax refund usually represents an over-withholding not permitted under Chapter 13. I think the amount will likely have to go to the trustee.
March 4th, 2008 at 12:10 pm
Me and my wife file MFJ. If we have our parents as our dependents on our tax return. They are retirees with income on SS over $3,000. Would they be qualified for a rebate? Would it be phase out with our AGI or they will receive their portion seperately?
March 4th, 2008 at 12:15 pm
There is an extra $300 tax rebate for each claimed dependent, but it is only for qualified children under the age of 17. That means taxpayers who claim an older person 17 or over as a dependent won’t get the extra money.
Individuals 17 or over who were claimed as dependents won’t be happy either. The economic stimulus bill specifically makes dependents, or even those who could be claimed as a dependent, ineligible for the tax rebate. So your dependent parents who were claimed by you and you wife won’t get rebates even if they held jobs or otherwise had Social Security income that otherwise would have qualified them for the tax rebate money.
In the alternative, if the financial numbers makes sense, one option is to amend your tax return and remove your parents as dependents. If you do that, they will be able to separately qualify for the tax rebate on their own (they will need to file their own 2007 tax return however). Of course, you and your wife will probably end up paying more in taxes.
So it’s just a matter of shifting tax money around.
March 4th, 2008 at 12:37 pm
My husband and I have 4 children together and he also has 1 child from a previous marriage. We filed our taxes as married filing jointly and claimed all 5 children. Our AGI was around $43,000. Im a stay at home mom. So based on this info can you tell me what our stimulus check amount may be?
March 4th, 2008 at 2:00 pm
You and your husband are in luck! The current stimulus plan imposes NO limit on the number of child based rebates that a family may be entitled to. As long as you claim all five children as dependents on your federal tax return, the IRS should be able to do the math.
Based on your married filing jointly AGI of $43,000 and presuming the numbers you’ve provided are accurate and that you did have to pay taxes, I calculate that you will be entitled to a big fat whopping rebate check of: $2,700.
Remember to use the money wisely!
March 5th, 2008 at 11:15 pm
I’m currently going through a Chapter 7 bankruptcy, but it has not been filed yet. Will I get the stimulus check, or will I have to pay it back?
March 6th, 2008 at 1:00 am
In regards to your anticipated Chapter 7 bankruptcy filing, you will likely lose your economic stimulus tax rebate check if you file for bankruptcy protection prior to receiving it. You will likely be required to turn over all or part of the rebate check to your Chapter 7 trustee unless it can otherwise be successfully claimed as exempt under federal and state laws.
If you wait till shortly after you receive your tax rebate to file for bankruptcy, the rebate check will likely be included as income for purposes of running the means test to see if you qualify for filing Chapter 7 to begin with.
As always, consult an attorney for further detailed guidance.
March 6th, 2008 at 1:40 am
IS THERE A SPECIFIC WAY THE IRS IS HANDING OUT THE REBATES? ONLY BECAUSE I HEARD SOMETHING IN THE MATTER OF THEY ARE GOING BY THE LAST 4 DIGITS OF YOUR SOICAL SECURITY NUMBER. CAN YOU CLEAR THAT ONE UP? THANKS
March 6th, 2008 at 2:22 am
There seems to be much online speculation about the way and the order that the tax rebate checks will be sent out. The advanced refund tax rebates in 2001 were distributed according to Social Security Number, and related rumors seem to be surfacing again. After doing some research, I have not been able to confirm that piece of information, so at this time being I must continue to view that as mere speculation.
While I do know the IRS is rapidly trying to assemble an orderly distribution system, they have not yet announced the order in which the 2008 tax rebates will be sent out.
I recommend regularly checking out the IRS Economic Stimulus Payments Information Center website link. It’s the only official source of information regarding the tax rebate.
Of course I will continue to post significant announcements as they are officially released.
March 6th, 2008 at 2:39 am
My wife and I recently were informed that our tax refund check was being offset and applied to an old school debt of hers. How will this affect our stimulus check. I will be filing an injured spouse claim soon.
March 6th, 2008 at 3:17 am
Based on the information you’ve provided, I presume your wife’s old student loans are currently in default. As a result, there is a student loan lien being placed on any IRS income tax refund coming to you. Your economic stimulus tax rebate check will likely be intercepted as well. Unless the student loan debt is paid off or missed payments are made current, your rebate check money will likely be siphoned off to pay for the outstanding loan.
As for your injured spouse claim, the IRS has not issued any special claim forms as of yet for the matter so I would just go ahead and file the regular Form 8379 claim for Injured Spouse Allocation. If your claim is successful, your tax rebate amount should be split 50/50, including the amount for each qualifying child if any.
March 6th, 2008 at 12:57 pm
My wife and I had a 2006 tax balance to the IRS which is being paid on under my wife’s Chapter 13 payment plan. Will we still get our stimulus check or will it go to her trustee ?
March 6th, 2008 at 6:04 pm
I am unable to provide you a very definitive answer to your question because it depends on how your Chapter 13 trustee views such windfall tax rebates that are not linked to the pre-filing overestimation or overpayment of taxes.
Normal tax refunds are part of the bankruptcy estate and debtors must turn over future tax refunds to the bankruptcy trustee. However, the 2008 tax rebate is not in the nature of a true refund, akin more to governmental free money as there is no underlying overpayment of taxes.
Since the answer may be subjectively based on the perception and views of your bankruptcy trustee, I suggest that you solicit the services of your attorney to inquire the trustee about his or her position on the pressing issue. My guess is that more likely than not, because you are already in the midst of Chapter 13 restructuring, you should be able to keep at least part of your stimulus tax rebate. However, in the interest of the estate, the trustee will likely want to intercept your tax rebate check and review the amount on a case by case scenario before releasing any amount to you (if release is the approach the trustee is willing to agree to).
However, that’s just my view.
March 7th, 2008 at 4:49 pm
My husband and i filed MFJ and income over $174,000. we have 1 child will we get a check on the childs behalf?
March 7th, 2008 at 5:10 pm
Since you and your husband exceed the married filing jointly threshold, you will not qualify for the tax rebate. Your extra qualified child rebate of $300 will phase out completely if your Adjusted Gross Income is $180,000 or more. Anything less than that, you may get a partial tax rebate.
March 8th, 2008 at 1:34 am
bankruptcy excludes EIC child credit from tax refunds sent to trustee. why not the stimulus rebate??
March 8th, 2008 at 2:52 am
Whether the earned income credit (EIC) is permissibly exempt from your bankruptcy trustee’s control is dependent on your state’s relevant laws and the court’s interpretation. Some states have enacted statutes expressly excluding “public assistance benefits” from bankruptcy collection (presumably that includes the earned income credit). But not all states provide for this EIC exemption in bankruptcy matters.
I do not have a definitive answer to your question, but it’s definitely a legal question a bankruptcy attorney may be able to more competently respond to.
If I had to make an assessment though, I would probably say that the tax rebate might not be exempted as a public assistance benefit under any relevant state EIC exemption because the tax rebate is also claimable by higher income individuals. Even married filing jointly couples with one child who have adjusted gross incomes of $174,000 a year qualify for the tax rebate. In contrast, the earned income tax credit only benefits very low income families.
March 10th, 2008 at 10:08 pm
i made exactly 2958 in 2007, should i wait to file my taxes till next year, or will i still get my 300 dollar rebate check
March 10th, 2008 at 10:29 pm
Because your 2007 adjusted gross income is less than $3000, you will not qualify for the tax rebate this time around.
I would wait until 2009 to file your 2008 tax return and claim it then. Hopefully you should earn enough to qualify at that time.
March 11th, 2008 at 10:07 am
my hubby and I filed chapter 13 in 2004, we do not get tax refunds anymore, they go to the bankruptcy courts. According to the calculator, we qualify for a rebate but will we get one or will it go to the trustee?
March 11th, 2008 at 10:30 am
Unfortunately, I am unable to provide you or your hubby a very definitive answer. It will depend on the practice and views of your Chapter 13 trustee. Normal tax refunds are part of the usual bankruptcy estate and debtors must turn over future tax refunds to the bankruptcy trustee. However, the 2008 tax rebate is not in the nature of a true refund, akin more to some special governmental type assistance as there is no underlying overpayment of taxes.
Since the answer may be based on the perception and views of your bankruptcy trustee, I suggest that you solicit the services of your attorney to inquire the trustee about his or her position on the issue. Because you are already in the midst of Chapter 13 repayment, my initial assessment is that you should be able to keep at least part of your stimulus tax rebate. However, in the interest of the estate, the trustee will likely want to intercept your tax rebate check and review the amount case by case before releasing any amount to you.
March 11th, 2008 at 12:11 pm
My husband and I are retirees. No working income but we have withrew $50000
from IRA and some investment income. We paid $5000 for 2007 federal income tax. Do we get tax rebate aand how much?
March 11th, 2008 at 12:15 pm
Your IRA withdrawal counts as ordinary income towards your adjusted gross income (AGI) on your tax return. Thus, presuming you went ahead and filed your tax return as married filing jointly, you will be entitled to a stimulus rebate check of $1,200.
You indicated “$50000 from IRA and some investment income.” You did not indicate how much the other investment income came out to be, but I am presuming it did not bump your total AGI past $150,000.
March 11th, 2008 at 12:21 pm
My husbands and my AGI was around 47000, and we have 3 qualifying children so I think we are entitled to the rebate. I have filed an injured spouse claim but have not heard anything yet. If our tax return was taken for back child support that my husband owes, will we lose our rebate check as well?
March 11th, 2008 at 12:30 pm
Because there is a child support lien on your husband’s income tax refunds, your economic stimulus tax rebate check will likely be intercepted as well, that is, unless your injured spouse claim prevails.
If you live in a community property state (such as Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, or Wisconsin), community assets, including a joint refund, can generally be offset to pay the liabilities of either spouse. However, filing a successful Injured Spouse claim on Form 8379 in a community property state may entitle you to recover 50% of any refund or rebate coming to you.
In non-community property states, the IRS runs an algorithm to determine what part of the refund is due to the income, deductions, and credits of each spouse. The share of the refund that is attributable to the injured spouse gets refunded to him or her, and the rest is used to offset the debt of the other spouse. The tax rebate checks will likely be subject to the same process. It will get offset but you should be able to get part of it with an injured spouse claim.
However, the IRS has not specifically addressed this issue yet.
March 11th, 2008 at 2:41 pm
I am 18 years of age and although I work, I can still be claimed as a dependent. Am I entitled to a rebate?
March 11th, 2008 at 6:45 pm
If your parents filed taxes and properly claimed you as a dependent for tax deduction purposes, you are disqualified from receiving a tax stimulus check even though you may have had earned income in 2007 that exceeded $3,000. However, if you are merely dependent on your parents for some financial support and they DID NOT actually claim you as a dependent for tax purposes, then you may be entitled to a rebate.
Please also note that because your age already exceeds 17 years, your parents, even if they were to claim you as a dependent, would not be entitled to the extra $300 child tax rebate on your behalf.
March 12th, 2008 at 10:18 am
Hi-
I filed my 2007 taxes already and qualified for a return. Unfortunatly for me, I got behind on a student loan and now they are taking that from my paycheck and they also applied my FULL tax return to that loan.
Given the fact that the IRS applied my return to that loan, would I still qualify for the tax releif check?
March 13th, 2008 at 4:45 pm
Because your student loans are currently in default, there is a student loan lien being placed on any IRS income tax refund coming to you. Your economic stimulus tax rebate check will likely be intercepted and taken as well. Unless the student loan debt is paid off or missed payments are made current, your economic stimulus rebate will likely be swiped to pay for the outstanding loan.
March 13th, 2008 at 5:36 pm
i was wondering if you might be able to tell me how much my husband and i might get back on our rebate check if any at all. our total AGI was $22,718 and we have two kids i also do not work so we filed MFJ.
March 13th, 2008 at 6:01 pm
For your AGI of $22,718 and presuming you paid taxes on that and properly claimed your two children as dependents under the ages of 17, you and your husband should receive a total tax rebate check of: $1,800.
March 13th, 2008 at 6:34 pm
My parents are both disabled, and they get SSI.. they do get more than 3,000 a year each in disability benefits (SSI benefits).
BUT they also get welfare (foodstamps and cash assistance) for my two sisters, one is 17 and one is 15.
They usually don’t file taxes, because of their situations.
Should they file? wll they get any money from the stimulus? AND if they do will they have to report it to their welfare agency and will their benefits be reduced?
March 13th, 2008 at 7:30 pm
I am not certain whether your parents will need to report the tax rebate to their welfare agency, but I would have a very difficult time believing that the welfare agency would reduce their benefits based on a governmental nation wide plan to issue free money to all qualifying lower income taxpayers. The economic stimulus plan was meant to target and benefit lower income people. I do not think the welfare agency will reduce their governmental assistance because of the tax rebate.
To qualify for the tax rebate, your parents will most definitely have to file their 2007 tax return even if they ordinary do not do so due to their lower income situation. If they do not file, they will not receive a rebate check, even if they were entitled to receive one.
Because Social Security disability income has been specially included as income for tax rebate purposes, they will likely qualify for a rebate amount. The amount will depend of whether they owed any taxes for 2007. If they did, their joint tax rebate amount (including the child rebate for your presumably dependent sister under the age of 17) will be: $900 if they DID NOT pay taxes, or $1,500 if they DID pay taxes.
I am assuming you cannot be properly claimed as an under-17 dependent child.
March 14th, 2008 at 7:28 pm
I have a slightly unusual case. I am SSI repecient however I am legaly claimed under IRS rules as a dependent. ( I am listed as other) I am concerned that by filing I can hurt the one who claims me, financialy. Yet I am not sure whether or not she could receive additional money because I am not a under 17yr old child, but a dependent no the less.
what is the options for this case?
Thanks
D. D.
March 14th, 2008 at 7:52 pm
Whether you file your own tax return or not has no tax rebate bearing on the person claiming you as a dependent for deduction purposes. However, because the $300 child rebate is limited only to those under age 17, the person claiming you will not be entitled to the extra child rebate.
Furthermore, because someone else is claiming you as a dependent, you will not be permitted to receive a stimulus rebate for yourself. The economic stimulus bill specifically makes dependents ineligible for the tax rebate. Thus, you do not need to worry that your own filing will harm the other person’s tax rebate qualification.
March 15th, 2008 at 5:30 pm
I am a qualifying widow with a dependent child under the age of 17 and a 2007 AGI of approximately $105,000. Do I qualify for the economic stimulus rebate or not?
March 15th, 2008 at 7:56 pm
As a single filer with an under 17 child and an AGI of $105,000, you are completely phased out according to the economic stimulus brackets. You will not be entitled to receive a tax rebate check.
March 17th, 2008 at 3:30 pm
I am disputing a tax liability with the IRS because the liability isn’t mine, its due to someone illegally using my information without my knowlege. I am also in the middle of filing chapter 7 with the tax liability included in it because the petition said I had to include all tax debts even if I am disputing them. I receive disability payments and am not usually required to file and I want to know if I will get a stimulus payment if I file.
March 17th, 2008 at 3:40 pm
I am not clear whether you have filed Chapter 7 bankruptcy already or whether you are merely in the process of getting ready to file for Chapter 7.
If you are planning to file bankruptcy before you receive your economic stimulus tax rebate, the tax rebate is a potential asset that should be listed on your bankruptcy filing paperwork. If you are filing Chapter 7, you may be required to turn all or part of the rebate over to your trustee unless it can be successfully claimed as exempt under the laws applicable in your jurisdiction. Federal and state laws provide different exemption rules, although some states allow you to utilize federal exemptions if they are more favorable.
Whether the tax rebate is exempt is a question your bankruptcy attorney will be more qualified to answer. Some states provide exemptions for public benefits, including public assistance (welfare), social security and unemployment compensation. I am unable to give a definite answer as to whether the stimulus tax rebate qualifies as a public benefit however.
March 17th, 2008 at 9:49 pm
I have filed 2007 tax returns (married filing jointly) and got a refund already. My AGI is $74000. My wife doesn’t have SSN and so I filed it using ITIN. I heard that IRS will not pay any rebate if ITIN is used in the tax filing. I have a child of 1 year age. What will happen in my case?
Note: My daughter and I have SSN’s.
Thanks
Tony
March 17th, 2008 at 10:00 pm
Your exact question has been perfectly addressed by the IRS as one of their official frequently asked questions. Take a look here (link).
To summarize, if you filed single with only a Individual Taxpayer Identification Number (ITIN), you will not be entitled to a stimulus tax payment since only those with a valid Social Security Number (SSN) are qualified to receive one.
If married filing jointly, both taxpayers must have valid Social Security Numbers. If only one spouse has a valid Social Security Number and the other only has an ITIN, jointly, you will not get a stimulus payment.
However, Tony, if you file your own separate return instead, you may qualify for a payment, based on your own income credits and deductions. You may also claim your daughter for the child rebate if you submit your federal tax return as married filing separately, since she has a valid SSN. Good luck
March 18th, 2008 at 7:52 am
I have retained a lawyer for chapter 7 bankruptcy.Will I get a rebate?My husbands on disibility.
March 18th, 2008 at 6:52 pm
I would need to have more details regarding your situation to clarify a proper response. I would need to know your total Adjusted Gross Income (AGI) and whether you have actually filed Chapter 7 yet.
To give you some general guidance, I am presuming you have sufficient AGI to get over the tax rebate threshold, and I am also presuming you have not yet filed Chapter 7 but have merely retained a bankruptcy attorney.
However, even if you are entitled to a tax rebate check, it is likely your tax rebate payment will be classified as a potential asset and listed on your bankruptcy claim. You may be required to turn all or part of the rebate payment over to your trustee unless you can properly claim exemption based on the laws applicable in your jurisdiction.
March 18th, 2008 at 7:26 pm
Thanks for the clarification!
We are in the process of applying for an EAD for my wife and then get an SSN.
I would like to know if I can claim this stimulus payment by filing an amendment later this year, after my wife receives SSN. If it is not possible this year by an amendment, can we claim it next year as part of 2008 tax filing.
I appreciate your help!
Thanks
Tony
March 18th, 2008 at 7:36 pm
If you can’t claim a rebate now, you can claim it later.
The stimulus rebate everyone will be receiving shortly is actually an accelerated tax rebate for 2008. Thus if you don’t claim it during this year, when you file your 2008 federal tax return on April 15, 2009, you can claim it then. The IRS is simply giving taxpayers the option of claiming it now rather than at the later time.
If you can’t qualify for the tax rebate at the present time you can claim it when you file your 2008 tax return. As for filing a 1040X amended return if your wife receives a SSN during this year, I would certainly go ahead and do that. At the very least, your tax rebate check will merely be delayed. Better late than never!
March 18th, 2008 at 9:25 pm
Our trustee ( BK13 ) does not request our refunds each year. We can keep them. I was also told that we can keep our stimulus, so I guess it is PER district.
March 19th, 2008 at 10:09 am
I am a student that made about 20,000 last year. However, I also took out 8,500 in Stafford subsidized loans. Do the loans affect whether or not I can receive a rebate? Thanks!
March 19th, 2008 at 10:15 am
Your Stafford subsidized student loans have no bearing on you receiving your economic stimulus payment, unless they are currently overdue. Since you are still a student, I presume they are not. You should qualify for a tax rebate.
March 19th, 2008 at 10:28 am
I heard that the tax rebate checks are comming out of our 2009 tax refund, is that true? Is this really not free money?
March 19th, 2008 at 11:00 am
The current economic stimulus payment is an accelerated rebate from your future 2008 tax return. The IRS is simply giving you the option of claiming it now, rather than at the later time. It is indeed “free money”. The rumors that the tax rebate will be deducted from your 2008 tax refund are false.
March 19th, 2008 at 3:11 pm
my daughter recently divorced has no income except ssi diability on a 3 yr old child. Former husband owes back child support on child that is now almost 19. Exwife has attached his fed tax returns for the past 5 yrs and state refunds. This year he filed taxes and claimed the 3 yr old. He has a refund of approx.500.00 dollars will he be eligible for the rebate for him and the child? What sould my daughter do about her filing a fed refund for herslef? Can she file for the earned income credit on her child she is raising now or in the future?Will she be eligible for the rebate this yr?
March 19th, 2008 at 7:17 pm
Your case has multiple issues and questions that would be more competently addressed by a tax attorney. I’m unable to offer you an accurate opinion at this time due to the lack of further details.
However either way, in accordance with their dependent tie breaker rules, the IRS will likely want to ask both parties for information to determine who is properly entitled to claim the 3 year old child as a dependent.
March 20th, 2008 at 10:04 am
I owe this year, will my tax rebate be applied to the balance due if I have not paid the taxes in full?
March 20th, 2008 at 10:15 am
Normally the IRS has to issue you a tax assessment and formal Notice and Demand for Payment before it will start taking your tax refunds to satisfy the outstanding tax liability. I anticipate the tax rebate to be the same. You will likely receive the rebate despite owing taxes for the year. However, bear in mind that if it’s left unpaid, you will receive a tax bill that includes interest and penalties. Thus you should try to pay off your tax liability sooner than later.
March 20th, 2008 at 10:33 am
Retained lawyer for chapter 7 bankruptcy.We have no tax liability.Havent filed in years.Living off disibility.So,can we claim stimulus rebate.Even with the means test for my bankruptcy it would still pass.
March 20th, 2008 at 11:00 am
I would need to know the total amount of your disability income to tell you whether you qualify for a stimulus payment at all, but I presume you have enough to qualify for one.
Whether your Chapter 7 bankruptcy filing will affect your stimulus payment depends on whether you’ve already filed your bankruptcy claim or not. Since you’ve only retained the lawyer, I presume you haven’t filed yet. If you are already in a bankruptcy, the tax rebate may have no affect on you at all. If you are filing a Chapter 7 claim, you may be required to turn all or part of the stimulus rebate over to your Chapter 7 trustee, unless the amount can be claimed as exempt under the laws applicable in your jurisdiction.
March 21st, 2008 at 5:08 pm
I am on disablity, my wife makes the bulk of our income. I have a tax offset, but for the last 5 years we have recieved 100% of our refund because she makes the most money, and my ssa-1099 does not seam to be enough to count.
We have already filed or 2007 taxes and recieved our refund last week, again we recieved 100% of the line 73 amount. we do file a injured spouse form each year.
since we have already filed, and the injured spouse form was included, do we need to file anything further? I have read that they will take 50% of the stimulus payment. Will this be the case for us since we always recieve 100% of our tax refunds?
thank you in advance.
March 21st, 2008 at 8:31 pm
Since you indicate that for the last few years the IRS has let you keep nearly 100% of your joint tax refund due to your wife’s injured spouse claim, I presume you are living in a non community property state that assesses refunds based on income proportionality. Thus, based on your situation and the facts you’ve provided, my assessment is that you should receive nearly 100% of your joint tax rebate as well. If you’ve already submitted the injured spouse form, you’ve done all that you can do for now. Just hang tight until May.
March 22nd, 2008 at 10:23 am
I went through a divorce last year after 15 years of marriage. When I filed taxes in February, my refunds were taken by the IRS to offset debt from previous years that I knew nothing about. To make a long story short, I have filed for Innocent Spouse which is in review now. I’m confused about what happens now in regard to “collections” while the case is in review (which accoding to sites I have read can take up to 1 year). The IRS site states that once you have filed for the Innocent Spouse, all collections are stopped until a determination is made. Does this mean that they will not take the Stimulus check due myself and my children?
March 23rd, 2008 at 10:16 pm
An injured spouse form adds 4-8 weeks to your return. the earlier you file it the faster you get your return.
I’m no pro, but you need to find out what the debt is, and who caused it. you will have to prove it was not your fault for the debt to get any refund. You will need to hire a CPA if you possible can.
March 23rd, 2008 at 10:24 pm
sorry this is not laid out proper, it is bits from several letters I have written in the last few days.
Here is where we stand today, I guess we are somewhat lucky. My parents are letting us use their CPA to handle the matter since we can get nowhere tring to deal withthe issue ourselves.
We had a tax issue back in 2002, the ohio dept of taxation and the ohio attorney generals office have colected close to 2 grand on a tax for that was filed on a normal state form instead of a part year resident form. Indiana was fine with us filing the wrong form over there. where we made 85% of our income. All the numbers we and are to this day right, I just used the wrong form, when I recieved the letter saying they redid my taxes, I believed we had fullfiled our obligation to the state. We have filled and recieved refunds every year since.
Then they say the tried to contact us, but did not have our address and or phone number. I explained both were on each 1099 we filed since 2002. they could not find us till 5 years later? gimmie a break.
Ohio saw that the amount we claimed was what we made in ohio, and since it did not line up with the IRS number, they redid or taxes for use, and said we owed 256 bucks, instead of 168 refund. we mailed a check for 256 the next day and have the original copy of the canceled check. they dropped it till this year, but have taken close to $2000 between then and what the bill we recieved this year was for. we have copies of every letter and phone call with names and dates we made to ohio.
the ohio dept of taxes and the attorney general both have different ammounts we owe, and they are not even close to each other.
when I went back over it, we did everything right (they owe us the 168 refund from 2002.) and they owe us close to $2000 that they have taken from us against the law.
My parents set us up with a appointment with their CPA, he is good, their returns involve millions of dollars every year.
Since I am disabled, and have had to deal with their harassment for 6 years, I wonder if I can sue the Ohio dept of taxation and or the attorney generals office, and for what amount. I hope he says we can sue them, I know you cant sue the IRS, but I read you can sure state level.
I believe we are due $30,000 in interest, lost wages, and time, plus pain and suffering.
Does anyone know if I can and for how much? they owe me $2100 bucks, plus I want interest, they charged interest and assorted fees, for the amount they said we owed them(close to $500), they would never say what the assorted fees were. they just kept transfering me between the two agencies, I guess hoping I would give up and just pay them more money they have been stealing from my family. this is theft plan and simple in my eyes, no different than someone stealing my identity and racking up bills.
We were forced into bankruptcy in 2003, and are now behind on credit card debt close to $3000, because we did not recieve money legally due us by the state.
I had to see my doctor several times to deal with the stress and was put on 3 medications from the trama. I have doctors that will back me up on this.
March 25th, 2008 at 8:24 pm
I have a friend that is on disability benefits and (SSI benefits).but she did not make $3000.00 on disablity and was told she can not count ssi because they do not send a 1099 on it. But she did make $200.00 over the year baby sitting my kids here and there can she clam that even though I did not send her a w2 form?
March 25th, 2008 at 10:48 pm
I would becareful about reporting any income, especially because she is on SSI. they can yank that check at any moment. its not like regular disability. I qualified for SSI for 1 month, the next my wife got a job and they pulled my SSI the day she was hired. There is a “free legal advice” site on the net. the people wit alot of posts are attnys. I think you have to register, but then find the section her question is about, SSI, and ask away, make sure to post the state she lives in so the advice given will be based on case law for her state.
Hope it helps.
March 26th, 2008 at 12:33 am
Eric’s opinion is something your friend definitely should think about. Other than the social security income (SSI), if your friend reports additional earned income made through so-called under the table means, she may be placing her qualified SSI benefits in jeopardy.
If your friend is intent on qualifying for the tax rebate however, most income sources can be counted for tax rebate income qualification purposes, including your friend’s babysitting income. She’ll just have to add up enough to hit the magic number of $3,000.
March 26th, 2008 at 9:22 am
Hi I have a story like tammy, I am a mother of two, me and my husband was broke up before 2007 I am on ssi and disability my son he is 14 and cut grass last summer made about $50.00 I did not make $3000.00 by $39 can I claim his money?
March 26th, 2008 at 2:31 pm
You can only claim your child’s unearned investment income on your own tax return. Unearned investment income includes dividends, interest, and capital gain distributions, but does not cover earned income sources like wages from lawn mowing or babysitting. You will be unable to include your son’s wages on your own federal tax return for tax rebate qualification purposes.
March 26th, 2008 at 2:53 pm
ok thanks What about yard sale money would that count on the economic stimulus rebate check?
March 26th, 2008 at 3:32 pm
Generally, all profits from garage and yard sales are considered taxable income. However, the profit is only the excess part that exceeds the basis of the sold items. The basis cost is the price that you originally paid for the item. Since the vast majority of garage and yard sale items are sold at heavily discounted prices, most of the so-called profit is in fact a loss - not resulting in taxable income. An exemption of course would be if the yard sale item was a fancy art painting that had appreciated in value. Any excess gain from the sale then would obviously be considered income.
In your case, I am presuming you did not sell a product that had appreciated in value. Thus, you probably didn’t generate taxable income from your sale and wouldn’t have extra income to contribute towards the tax rebate income qualification threshold.
March 27th, 2008 at 10:48 am
any income gain would have to have hppened in 2007 as well. you cant claim money made in 2008 on your 2007 tax return.
just FYI
March 27th, 2008 at 8:57 pm
I just got married 8/31/2007 and filed married filing seperate. My AGI calculated at 38,000 because I had to withdraw a retirement fund of 8,000 and my husband made roughly $22,000. My questions are 1)Do we both qualify for the Economic Stimulus rebate check? and if so what amount would each of us be entitled to?
2) We have one child together and I claimed our child our on my return because my AGI was more than my husband’s. Will I recieve a credit for our child and what amount should I expect?
March 27th, 2008 at 11:00 pm
The IRS has a useful and on-point tax rebate posting about the tax rebate effects of those submitting their tax returns as “married filing separately”. Check out Example #6.
In response to your specific questions:
Based on the information provided, yes - you and your husband both qualify for a tax rebate. Presuming you both paid taxes, with you claiming the child as a dependent, you should receive $900 - the basic stimulus payment of $600 plus $300 for the child. Your husband, filing as married filing separately as well, should receive a $600 stimulus payment.
March 31st, 2008 at 1:11 am
I am a 21 year old student who let my parents claim me this year because they said they would pay the difference. I made over $13000 and they keep telling me that I would only get $300 if I were to claim myself…. I keep telling them I would get the $600. I had taxes withdrawn from my checks and such but I ended up getting a refund from both state and federal. What do you think? They trying to screw me over or what? I am single. They said something with the student part has something to do with me only getting the $300… Set me straight please.
March 31st, 2008 at 1:28 am
Based on the information you’ve provided, I believe you are correct, and your parents’ statements regarding the tax rebate are wrong. Based on your income of around $13,000 with taxes paid, you are well within the qualification limits for a $600 economic stimulus rebate.
Your student status has no effect on your tax rebate qualification. However, because your parents claimed you as a dependent, this will effectively disqualify you from receiving any rebate. I hope you guys can sort things out. Your parents can always file a 1040X to amend their return.
April 1st, 2008 at 1:28 pm
I have a lien on tax returns due to child support, if I don’t pay owed taxes on April 15th, will the stimulus payment go towards my owed taxes or go to my exwife for back childsupport
April 2nd, 2008 at 1:57 pm
I am not entirely clear what you mean by “If I don’t pay owed taxes on April 15th”.
If you don’t file your taxes at all, you will not receive a stimulus payment at all since filing is a requirement to receiving a rebate. If you do file though, since there is a lien on your tax returns, the stimulus payment will be intercepted to satisfy the child support debt like any other tax refund.
April 2nd, 2008 at 2:17 pm
My husband and I filled MFJ we have 2 kids under 17. Our AIG was 35,000 and we already filled or taxes a couple of months ago. I’m a stay at home mom with no income. ($1,800 back right?)
But I have a quick question. I know family members have received a letter in the mail stating that they qualify for the rebate and this has been about a week ago. We haven’t received this letter and I’m a little conserned should I be?
April 2nd, 2008 at 3:02 pm
I wouldn’t worry about not having received the letter. The letter was a standard template letter with no new information. It doesn’t indicate that you actually qualify for a rebate, but is merely a reminder notice to file your taxes if you want to qualify for a tax rebate payment.
Take a look at the IRS letter’s contents in this article.
April 2nd, 2008 at 3:51 pm
Regarding D McMillan’s post from April 1st, 2008 at 1:28 pm — Raymond, I think I understand her/his question because I’m in a similar situation and I’d like to restate the question. I owe for 2007 taxes but can’t pay the amount until I get another job (I was laid off a few months ago). So when I file the 2007 tax return but don’t pay the taxes owed (yet), will the stimulus rebate be applied to the amount owed for my 2007 taxes OR to the past-due debt (in my case a very old student loan in default, in DM’s case above it’s child support) for which there is already a tax lien? For the past 5 years or so, all my tax refunds have been applied to the old student loan, FYI. Thanks in advance for your reply.
Incidentally, for anyone who’s currently getting a student loan: pay it off as soon as you can! Mine has followed me for 26 years so far, believe it or not, and although it was originally for a small amount, over time it has ballooned from the interest charges and I now owe more than ten times the original amount — and counting. It’s in collections now and although the IRS sends a letter each year saying that the refund was used to offset the loan, the amount of those refunds ($1,000 last year alone) does not show up on the collections statements. It’s difficult to determine who actually holds the debt, but the IRS takes my money each year while the collections company just keeps increasing the amount. The amount owed never goes down, only up. So yeah, learn from my mistake if you can. It’s been the biggest financial albatross of my life, and will never go away. Even if I were to claim bankruptcy, student loan debts are not eligible for discharge so I will always owe them no matter what. And I don’t make enough money to actually pay them off. Depressing!
April 2nd, 2008 at 8:41 pm
I owe a Hospital bill that is from a State teaching hospital and they always keep our State Refund. So will they also keep the tax rebate check. Thanks
April 3rd, 2008 at 12:44 pm
My husband owes student loans. They always keep his tax refunds. I did not file Injured Spouse for 2007 because we owed back taxes from 2006. My 2007 refund was automatically applied to my owed taxes and they are now paid in full.
I will need to file Injured Spouse to get my portion and my child’s portion of the rebate, but do I file it now or should I wait until I get a letter from the IRS stating that our rebate was applied to his outstanding loans?
April 3rd, 2008 at 12:45 pm
I should have added that we filed jointly because I knew that all of the refund would go to back taxes, but I didn’t realize the rebate would go toward his loans. We just got married in 2007 so his refunds have always gone toward his loans.
April 3rd, 2008 at 1:12 pm
If you want to shield your portion of the tax rebate from your husband’s old unpaid student loans, you should file the injured spouse form with your tax return before the April 15 deadline. The rebate amount you get back will depend on whether you reside in a community property state or not.
April 4th, 2008 at 10:11 am
My husband had some old medical bills go to collections with our states Attorney Generals office. They have taken our state refund for the last two years and applied it to that debt. Will they take the tax stimulus check as well? We file Married Filing Jointly and our income is below $75,000 together.
Thanks,
Rachel
April 4th, 2008 at 11:05 am
I am a bit puzzled as to why your husband’s unpaid medical bills would result in a federal tax refund lien. Generally, tax refunds are not captured for private and commercial debts. Was there a seizure order against one of your bank accounts where the tax refunds were being deposited into?
Just for your information - for tax lien purposes, the stimulus payment is treated like any other tax refund. This means that part or all of your payment can be used to pay past due federal or state income taxes or non-tax federal debt such as student loans and child support. If this occurs, you will receive a letter explaining how the stimulus payment was applied.
April 4th, 2008 at 10:38 pm
I made a little less than $2,700 after taxes, but a little over $3,200 before taxes. Will I receive a stimulus check?
April 4th, 2008 at 11:54 pm
I presume the amount you’ve listed are earned income amounts from qualifying sources such as wages. If so, you made enough to cross the $3,000 initial income threshold for tax rebate qualification. If you are single, you will receive a $300 stimulus payment.
April 5th, 2008 at 12:20 am
i have 3 questions for you,
i am a single mother of 3 and the father of my children claimed 2 of our kids, because made more money for the year of 07 than did. with me claiming only one of my children and earning less than 3,000 this year will i qualify for the rebate check?
i was fired from my job when i became pregnant with my 3rd child and collected public assistance from mar. 07- jan 07 does my public assistance get counted as earned income even though it was not claimed on my 07 return?
if so and i do qualify for the rebate heres the 3rd question for you,
i have a student loan in default, but it did not effect my 07 refund nor did they start to garnish my wages at my current job, will my free rebate (if i qualify) be effected by this loan in default?
April 5th, 2008 at 12:22 am
please notify me of my comment via e-mail and on your website
April 5th, 2008 at 4:38 am
1) If your earned income was truly less than $3,000 for 2007, you will not clear the basic qualifying income eligibility to receive a stimulus payment.
2) When you mention “public assistance”, I presume you are referring to either unemployment benefits or welfare benefits based on need. Neither of them are considered earned income for tax rebate purposes and will not help you clear the initial qualifying income hurdle. However, if your public assistance was comprised of Social Security benefits it might…
But either way, if you had taxable income, the amount would need to be reported on your federal tax return to be counted towards your $3,000 tax rebate income goal.
3) If you haven’t received an IRS Notice of Federal Tax Lien due to student loan default yet, you are probably okay for now. But eventually they will go after your future tax refunds.
April 5th, 2008 at 10:46 pm
thank you
April 6th, 2008 at 3:32 pm
me and my husband filed our income taxes in feb. my question z that we made a total of 15227.00 last year what amount will me and him recieve plus we have two kids
April 6th, 2008 at 7:18 pm
Based on your income, I estimate you should receive a $1,800 stimulus payment - $1,200 for married filing jointly and 2 sets of $300 for each kid.
April 7th, 2008 at 2:34 pm
I’m 24 yrs old. I’m in law school. I have no children. I am not claimed as a dependent. I had student loans, but that shouldn’t matter. I made $0. As I understand it, I don’t get any rebate. But, do I need to file any taxes at all, or can I just not do anything, and be willy-nilly until April 15, ‘09? Thanks.
April 7th, 2008 at 3:14 pm
I’m sorry you are in law school. As a recovering young attorney (late 20’s), I have a somewhat jaded and pessimistic view of the legal profession.
But back to the tax rebate question - if you have no income during 2007, you pay no income tax. If you make anything during 2008 however, you may qualify for the tax rebate on April 15, 2009. That’s because the tax rebate may either be claimed in 2008 or 2009 - the IRS is giving us that option
April 9th, 2008 at 11:06 am
My wife has four credit cards that were run up and left to her by her ex-husband over five years ago. HE filed for bankruptcy last year and thus she was left with the debt. All of these cards are now in collections. Will we still get our rebate check since we filed jointly?
April 9th, 2008 at 12:00 pm
Although the credit cards may currently be in collection status, generally tax refunds may not be intercepted by private entities to satisfy outstanding debt (only the state and the federal government can). The tax rebate is treated the same way as a tax refund for lien purposes.
Thus I would not worry about the credit card company intercepting your tax rebate payment. However, do note that if they haven’t already done so, they may have already placed liens on your existing bank checking or savings, and may grab the tax rebate when you deposit the amount into one of those accounts.
April 9th, 2008 at 5:54 pm
i have not filed bankruptcy yet, however, i am in the process of filling out the paperwork. i am married, but i am filing, not my husband, on debt acquired before our marriage. will my bankruptcy affect our tax rebate? should i wait to file until we have received the rebate?
April 9th, 2008 at 6:00 pm
Are you filing for Chapter 7 or Chapter 13 bankruptcy? The results and effects will differ.
If you are filing a Chapter 7, you will likely lose your economic stimulus tax rebate if you file for bankruptcy protection prior to receiving it. You will likely be required to turn over all or part of the rebate check to your Chapter 7 trustee unless it can otherwise be successfully claimed as exempt under federal and state laws.
If you wait till shortly after you receive your tax rebate to file for bankruptcy, the rebate check will likely be included as income for purposes of running the means test to see if you qualify for filing Chapter 7 to begin with.
Chapter 13 may be slightly different. The effects would depend on how your bankruptcy trustee decides to treat the rebate. The case would obviously be moot if he or she deems the economic stimulus tax rebate as an exempt asset from trustee control.
It’s a broad question…thus it’s best to ask your bankruptcy attorney on this matter.
April 9th, 2008 at 7:37 pm
Raymond.
Had to file for an extension this year and was wondering how filing that would affect me getting the rebate check. I have read different versions of what might happen on line and was wondering what was the truth. I tried looking through the IRS site but did not find a definite answer.
Can you shed some light on this please. Great site, thanks a ton.
Dave
April 10th, 2008 at 3:33 am
The IRS wants to encourage everyone to file by the normal April 15 tax deadline since the sooner you file, the sooner you can receive your stimulus payment.
The closest IRS answer I can find in response to your question is here:
“People who file a return after April 15 will receive their economic stimulus payment, but probably about two weeks later than the schedule shows. A return must be filed by October 15 in order to receive a stimulus payment this year. See the online calculator for an estimate of the amount you will receive.”
April 10th, 2008 at 8:55 am
Thanks so much Raymond!!! I appreciate your time! Mike
April 10th, 2008 at 6:24 pm
So…let me try again. For several years my tax refunds have been intercepted to pay an old student loan. Pretty straightforward. For the 2007 return, however, instead of a refund I will actually owe taxes, which I cannot afford to pay (I was laid off recently). When I file, and don’t include a check, I am curious to know if the stimulus payment will be applied to the 2007 taxes or to the previously mentioned old student loan. How can I find that out? I’ve searched but can’t find any information. Any info is appreciated. Thanks.
April 10th, 2008 at 7:00 pm
Oops sorry…your previous question somehow fell through the cracks..
Well your student loan tax lien and your 2007 unpaid tax liability will be treated separately. Your unpaid student loans will get first priority because they are currently in active collection mode. Your unpaid 2007 taxes don’t enter collections until the IRS has given you several warning letters and the opportunity to pay them in full.
Because the tax rebate is treated the same way as a tax refund, you can expect your tax rebate to be intercepted by the IRS and paid towards your old student loans. The IRS will send you a later detailing the treatment of your tax rebate.
April 10th, 2008 at 7:54 pm
Just a few questions I retired in 2002 and receive a partial pension of about $13,000 I have not filed a tax return since receiving the partial pension. When I contacted the pension board they would not give me a 1099 and when I explained to them that I had not filed an income tax for the last 5 years they wouldn’t give me a 1099r but they did send me a monthly income verification. Can I use this to file my own income tax without the 1099 or 1099r? From what I have read I do qualify for the $600 and I do have a child that I am the custodial parent that lives with me so I will qualify for the $300 also right? Thanks for any help on this matter……
April 10th, 2008 at 8:00 pm
Yes, you can use the monthly income verification to file your taxes.
Unless your taxable pension arises from Social Security, railroad retirement, or Veteran Affair benefits…your pension will not be considered earned income for tax rebate purposes. However, if you are paying taxes on it, in some cases it doesn’t matter whether the taxable income is earned or unearned. You should still file as the IRS may just go ahead and count it towards the tax rebate threshold. The treatment onus is on the IRS since they are running the calculations automatically for you.
April 10th, 2008 at 8:31 pm
Just one question as long as you are on SSI and make over $3000 you are eligible right? I read the whole post and that is what I got out of it, also how do I file without a 1099…thanks so much…
April 11th, 2008 at 4:41 am
When you say SSI - are you referring to social security income or are you referring to supplemental security income? Since you seem to suggest that you did not get a Form SSA-1099 reporting your Social Security benefit information, I suspect you are actually receiving supplemental security income. Supplemental security income does not count towards the tax rebate qualifying threshold.
But if by SSI you are referring to Social Security benefits, then yes, you seem to have enough for the rebate. To file without your 1099, you may be able to get the benefit paid information from your bank statements perhaps. You don’t usually need to attach a 1099 form to your return, except when you receive a Form 1099-R that shows income tax withheld.
April 11th, 2008 at 10:56 am
i’m a single mom who recieves childsupport and a ssi check for my daughter and i was just wondering if i will get a rebate check?