Thursday, March 20, 2008

File Your Tax Return to Get Your Economic Stimulus Check

To help reduce the effects of a slowing economy, the Internal Revenue Service (IRS) will send tax rebate checks to over 130 million households beginning in May 2008 and continuing through the summer.

In order to qualify for the rebate, however, individuals and households must file a 2007 tax return.

The IRS will use the 2007 tax return to determine eligibility and calculate the basic amount of the payment. In most cases, the payment will equal the amount of tax liability on the return with a maximum amount of $600 for individuals ($1,200 for taxpayers who file a joint return) and a minimum of $300 for individuals ($600 for taxpayers who file a joint return).

Even those who have little or no tax liability may qualify for a minimum payment of $300 ($600 if filing a joint return) if their tax return reflects $3,000 or more in qualifying income.

For the purpose of the stimulus payments, qualifying income consists of earned income such as wages and net self-employment income as well as Social Security or certain Railroad Retirement benefits and veterans' disability compensation, pension or survivors' benefits received from the Department of Veterans Affairs in 2007.

However, Supplemental Security Income (SSI) does not count as qualifying income for the stimulus payment.

It is also important to note that a payment under the economic stimulus plan does not have any effect on eligibility for needs-based programs such as Food Stamps or TANF.

For more information about the economic stimulus plan, go to the IRS Website at http://www.irs.gov/newsroom/article/0,,id=177937,00.html.