Advertiser Disclosure: Many of the savings offers appearing on this site are from advertisers from which this website receives compensation for being listed here. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). These offers do not represent all deposit accounts available.

Breaking Down The Details Of The 2008 Economic Stimulus Plan and Your Tax Rebate Check

Published 2/12/08 (Modified 3/14/11)
By MoneyBlueBook

Update: Read About The Possibility Of A 2009 Second Stimulus Check

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)
($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)
(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 Economic Stimulus Questions. For an unofficial response however, you can try posting your comments or questions here.

Updated Note: The IRS has released the official Economic Stimulus Payment Schedule.

Disclaimer: Discover is a paid advertiser of this site.
Reasonable efforts are made to maintain accurate information. See the Discover online credit card application for full terms and conditions on offers and rewards.

Feed for this Entry

405 Responses to “Breaking Down The Details Of The 2008 Economic Stimulus Plan and Your Tax Rebate Check” 

  1. Dana Brown/ Bryan Brown says:

    yes my rebate was suppose to be in my bank account friday may 9th and it wasnt and still isnt and it is may 13th please tell me when i will have it in there because i had big plans for it and well some of them were ruined because it wasnt there on time please help me by answering my question.

  2. Lien Pham says:

    I'm waiting for my tax rebate and I haven't seen it yet. I filed electronically and paid my taxes electronic. According to the schedule, I should have received a rebate last week (5/09/08). I don't make more than 75K. Does this mean that I'm not getting a rebate or is it going via regular mail?

  3. Gretchen says:

    My entire tax return was taken by the Military Star Card/AAFES. I still owe them money. Will this be taken out of my stimulus check? I thought it was just a credit card debt, but I guess since it was through a military affiliated company, it is considered a federal debt. Does anyone know?

  4. Lyssa says:

    My question is this. The Ohio Attorney General is claiming I owe them repayment for unemployment benefits. They offset my state taxes but I got my federal taxes just fine. WIll I still get my stimulus?

  5. Tony says:


    I have filed my 2007 tax returns in March and got the returns already. The return has been filed as 'Married Filing Jointly' with ITIN for my wife. My daughter and I both have SSN's. After filing I have realized that I am not eligible for Stimulus payment as my wife didn't have SSN.

    My wife has now received her SSN. And I would like to file 1040X to replace my wife's ITIN with her SSN. But I am not sure if I can do this. I highly appreciate if you can give me some inputs in this regard. Can I file 1040X to replace ITIN with SSN? if yes, what precautions should I take? Will I get Stimulus payment if I can file 1040X? Do I need to file 1040X for state as well (I live in Massachusetts)?

  6. daryl says:

    question: i found out a few weeks ago, i honestly forgot to add some capital gain info on my 2006 taxes, and I now owe. I set up a payment plan with the IRS to make monthly payments. Will I receive my stimulus check or will the IRS Garnish?

  7. Angela says:

    I am head of household, 2 dependents 1 in college 1 is 12 yrs old. However, my stimulus pay was reduced because of a tax liabilty/AGI...is 20615 taxable income is 0. Itemized deductions 11222...
    Why was the payment reduced...I cannot find a clear answer on the IRS page. i call..the recording stated that my payment was reduced because of my tax liability??? I receive a VA disabilty benefit for injuries sustained during the Gulf War, thats over 3000 however I am not retired or totally disabled..

  8. Teresa says:

    Hi, i filed and i will receive a refund check and i filled efile and did direct deposit and here is the 16th of may and still no check in the bank
    so what is that tell me that mine will be mailed to me??????

  9. michelle d. kemp says:

    when is my stimulus check coming.

  10. Delores Fegan says:

    I have not rec'd my stimulas refund. Due on May 9 (last two #'s 53) I have my ss cks direct deposited.

  11. texas says:

    hey im 19 and i took care of two of my nephews and i put them as dependents will i get a check? but i also put the adress as my aunts so can she cash my check y o n?

  12. Ana Pool says:

    My daughter filed jointly for 2007. She paid taxes for the whole 2007. In the other hand her husband was working but he claimed 5 dependents the whole year and almost never paid taxes. They have a child. They received their estimulus check but they only received $900.00. I thought they going to receive $1500. Please can you tell me why?

  13. Dave Bell says:

    Just received what was left of ours: "... based on 0 qualifying children."
    Huh? We have three dependent children, two of them under 17.
    Ignoring the discrimination against the 17 yo, who earned ~$3600, but doesn't qualify on her own, why were the two 15 yo's DQ'd?!?
    Guess we'll be calling the tax guy on Monday...

  14. Melanie says:

    In the news this weekend they are talking about the people complaining that they didnt get the extra $300 foe a dependant child or children. This is an error of the government and they are fully aware of it. They promise to fix it by resnding checks to those with qualifying children. Of course, you wont get the owed money until July. It will be paid by paper check. But hey, at least you know it's coming.
    They also admit to a glitch that put peoples money into the wrong bank accounts. At first they said it happened to 15,000 people, now they claim that number is actually 1,500. Maybe it did work out better for the people who were to get their stimulus by check rather than direct deposit after all.

  15. sharon says:

    Our AGI was 19,200. (filed jointly) and we received our check already. We had direct deposit, but we only got $600. Daughter said she heard that they made some mistakes on the checks. My husband started collectimg SS in Dec.2007, and is still working parttime. I retired in April of this year. We sent our income tax forms in Feb. No we didn't have to pay . We got a small rebate. How come we only got $600.?

  16. Grace says:

    I think the whole payment amount is pretty unfair. I am single, have no kids, and received a federal refund of $500. Just because I didn't owe the IRS anything, I am only going to receive a $300 stimulus check, according to the IRS calculator. Also, the payment schedule is stupid, basing the whole timeline on the last two numbers of your SSN. I'm not even going to be receiving this check until July! If I would have known that, I would have asked my tax preparer to change my refund to DD. I personally think that it should go by the date they processed your return. I mailed mine in Jan. 31, and received my check on Feb 21. I have also heard that they may penalize you on your 2008 refund, so based on that, I would only receive a $200 2008 refund! I refuse to spend this money when I receive it, because I will probably need it to pay the IRS or my state next year. What a joke.

  17. Christine says:

    I received my stimulus check last Friday. My familiy was supposed to receive $1500. (married with one child). We only received a total of $158.00. We owe no back taxes, child support, past due student loans and we met the tax liability standards. I called the IRS support number, but was unable to talk to anyone. I guess we have to wait for a follow-up letter stating our deductions......in 2 weeks. I want to figure this out now. Is it a mistake or are there other deductions out there that we don't know about?

  18. stacey says:

    I recieved a very odd amount for my rebate check. I should have recieved $1200 (myself and then 2 minor kids) but didn't. I do not owe any back taxes or anything...recieved my full refund from 2007 infact...I have looked all over the net for anything to explain it and cannot find anything

  19. Stephanie says:

    I'm so mad!!! I'm a stay at home mother to a 22 month old. I tried to go back to work last year but had to quit because my son got very ill at daycare. I had missed more time than I had worked, so I would have been fired anyway.

    Yadda Yadda Yadda.... We aren't getting a stimulus check. My boyfriend is the only source of income, but he owes money to the irs.

    I think it's total BS that you have to have made at least 3,000 to be eligible. We could really use the help, not that it would be "stimulating" anything in this house other than to pay bills we've been short on.

  20. kim blankenship says:

    I filed my taxes electronically via my cpa prior to the 4/15 deadline. Because I am self employed, I owed taxes this year which I have already payed in full via a personal check (which was quickly cashed, I might add!) My total income was less than $37,000 and according to my accountant, I should be receiving $600 which he requested to be direct deposited ( I file as head of household, but my son was 17 before 12/31/07, so I get nothing for him). As of today, I have not received anything (including a letter saying the amount of the check I would be entitled to). Also, I paid my accountant separately via a personal check. Any ideas as to when and How I might be receiving my payment? My ss# ends in 82. Thanks in advance for your help.

Leave a Reply

If you liked this site, please Add To Bookmark and/or Subscribe To A FeedReader

Search this site