Want your tax rebate check? You gotta file first!
The economic stimulus package that President Bush signed into law on Feb. 13 means that around 130 million Americans will be eligible to receive a tax rebate check beginning in May. But theres a catch that lower-income seniors need to know about!
Those eligible to receive Uncle Sams tax rebate must have a valid Social Security number and have earned at least $3,000 in 2007 which includes earned income, Social Security, Railroad Retirement and veterans benefits (SSI does not count). But heres the catch. In order to receive it, you have to file a 2007 federal tax return.
Even if you arent normally required to file a income tax return and around 20 million seniors and low-income workers arent you must file one this year if you want to receive your rebate. The reason for the mandatory filing is because the IRS will be using the information on your 2007 tax return to determine your eligibility and to calculate the amount of your payment. So no tax return means no rebate!
Note: Wealthier taxpayers whose income tops $75,000 for single filers and $150,000 for married couples filing jointly will face phase-out rebates. This means that their rebates will be reduced by $50 for every $1,000 above the $75,000 and $150,000 income limits.
Rebate checks will range from $300 to $600 for individuals and $600 to $1200 for joint filers. Some taxpayers with children will receive an additional $300 per child. Heres how it breaks down:
• Individuals will receive a minimum of $300 if they paid $0 to $300 in federal income taxes in 2007.
• Individuals who paid between $300 and $600 dollars will receive a rebate equal to the amount of taxes they paid.
• Individuals who paid over $600 in taxes, they will receive a maximum rebate of $600. Note: All of these numbers double for married couples.
Taxpayers who already filed a return do not need to do anything else. However, if you filed a return but reported less than $3,000 in income, you may need to file an amended return to be sure your qualifying Social Security or veterans benefits are counted. Adding these benefits on an amended tax return will not increase an individuals tax liability but will establish eligibility for the stimulus payment.
Savvy Tips: If you have other questions about the tax rebate payments visit the IRS Web site -- www.irs.gov -- where youll find the most accurate and up-to-date information. Or if you dont have access to the Internet, call the IRS helpline at 800-829-1040.
And for help preparing your taxes, dont forget about AARPs Tax-Aide program. A free tax preparation and counseling service available to older taxpayers, and you dont have to be an AARP member to get help. To locate a Tax-Aide site near you (there are more than 7,000 nationwide), call 888-227-7669 or visit www.aarp.org/taxaide.
Jim Miller is a contributor to the NBC Today show and author of The Savvy Senior books.