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raccol wrote:

Kalrog wrote:And at the end of the year, you will have to account for this money. Remember that this "rebate" will be applied to your 2008 taxes. So if you would have gotten back $700 in the spring of '09 (for your 2008 tax year), you will now only get back $100. This assumes current tax laws.

Is this stated somewhere specific to this rebate or just based on previous rebates?

I base this on two things.
1) previous history
2) Tax law wasn't changed. So this CAN'T legally change how much taxes you owe for a year. It can just change when you get your refund.

I also saw an FAQ that said it wouldn't change your tax burden for 2008 - but that was a news article somewhere and not direct from the IRS. This tends to support #2 though.

srothstein wrote:And, as I understand the rules, you get back however much you listed on your 2007 tax return as the tax bill, with the following limitations:

1. Maximum rebate is $600 for a single person and $1200 for a married couple with no children. Either single or married would get an increase of $300 per child listed on the return.

2. If you were below the tax cutoff level and paid no taxes, you get no money EXCEPT that there is a minimum of $300/person who showed $3000 in EARNED income.

3. If you make more than $75,000 Adjusted Gross Income (single, or $150,000 married), you get nothing.

One part that is unclear to me and to the IRS is if the $300 per child credit phases out with the higher income or not. As I understand this, one part of the law says it does and the other part does not.

And a second part that is unclear to me is if the $300 per child addition is only if you paid the extra part in taxes. For example, my personal tax bill this year is about $XXXX. I do not know if my wife and I get just the $XXXX, or if we get $XXXX PLUS the $1200 for the four children. We did not pay 2400 this year in tax.

My understanding (and I don't even think the IRS fully understands it yet) is that it will change what happens on your 2008 taxes, but your 2007 taxes are filed with no effect from this "rebate" Basically, what this means is that if you are filling out turbo tax in January of 2009 (for the 2008 tax year) it will ask you if you got a rebate check in 2008. If you did, what was it. It will then adjust your end of year tax rebate or bill to reflect that earlier distribution of money. That is the way it worked last time they did this rebate thing and some of the FAQs that I have read make me think that is what is going to happen again this time.

Now to your questions:
1) Agreed
2) Agreed
3) I saw something about it being reduced, not immediately eliminated. So for every dollar over the max you make, you lose $.05 on your rebate check. Hypothetically you are single and earn 85k (10k more than the cutoff). Your rebate check would have been 600, but you lose 10,000 x .05 = 500 so you would get a $100 check instead. Assume you had a child in that, initial check would be 900 minus the 500 for a 400 rebate check. If you earned 90k in that scenario, your rebate checks would be 0 and 150 respectively. (from an IRS FAQ I read)

About your last paragraph... if you file your 2007 taxes and it says you get a refund of 1000 and you are also eligible for a stimulus check of 2400, then you will get your 1k in April (or whenever) and the stimulus checks should start going out in May or June... you would get a total of 3400, but it would be at different times. Remember, I don't think the stimulus check will effect your 2007 taxes at all - I think it will effect what you get back at the end of the 2008 tax year, but it won't effect your total bill for the entire year - just that it was partially paid out early.

And at the end of the year, you will have to account for this money. Remember that this "rebate" will be applied to your 2008 taxes. So if you would have gotten back $700 in the spring of '09 (for your 2008 tax year), you will now only get back $100. This assumes current tax laws.