Ask Kim
Second Chance at a Rebate
If you had a child or your income declined last year, you might qualify for this tax credit when you file your 2008 return.
By Kimberly Lankford, Contributing Editor, Kiplinger's Personal Finance
January 19, 2009
I've heard that you can apply for a stimulus rebate check when filing your 2008 tax return if your 2008 income was lower than your 2007 income. Is that true?
Yes it is true. People who didn't qualify for the full rebate check last year have a second chance to get the money when they file their 2008 tax return.
Those rebate checks that most people received last spring and summer were actually a tax credit for 2008, which would normally reduce your 2008 tax bill. But to get the money into people's hands quickly to stimulate the economy, Congress had the IRS make a prepayment of the credit. That meant the rebate was figured based on information from your 2007 return.
Most single filers received a $600 rebate, and married couples received $1,200, plus $300 for every dependent younger than 17. The rebate amount started to phase out if your 2007 adjusted gross income was more than $75,000 for single filers, or more than $150,000 for married couples filing jointly. For people who earned more than that, the rebate was reduced by $50 for every $1,000 you earned above the income limit. It phased out entirely at $87,000 for single filers without children and $174,000 for joint filers without children.
If you earned too much to qualify based on your 2007 income, but earned less than those limits in 2008, then you'll be able to claim the rebate when you file your 2008 taxes.
You may also qualify for some rebate money this year if you had a child in 2008, or if you were originally ineligible for a rebate because you could be claimed as a dependent on another person's tax return in 2007 but cannot be claimed as a dependent in 2008.
If you didn't originally qualify for the rebate but do this time around, then the amount will be a credit on your 2008 tax return and will be included in your refund (not sent as a separate check). You can figure out the credit when you file your form 1040 for 2008 -- the instructions for form 1040 include the calculation, or your tax-filing software will figure the credit for you.
The IRS also has some new resources to make it easy to figure out if you'll be getting the rebate. See the IRS’s Recovery Rebate Credit Information Center and Questions and Answers About the Recovery Rebate Credit at the IRS’s Web site.
People who had a good year don't need to worry: If you earned more in 2008 than you did in 2007, you don't have to pay back the rebate.
Reader Comments (7)
Posted by: Liz at 01/21/2009 03:06:40 PM
What if the opposite is true? I.e. you didn't make enough last year to get a refund (less than $3000), but this year you did?
Posted by: Pat at 01/29/2009 09:54:42 AM
This was the case for me and I received a rebate so you should be ok. Emphasis on should but I don't see why it'd be any different for you
Posted by: Muriel at 01/29/2009 12:51:19 PM
I made 23,000 in 2007. I only recieved a $300.00 rebate. When filing my taxes this year I recieved an extra $300.00. Is this the tax credit from last year? it states that single filersget $600.00 dollars?
Posted by: William at 01/29/2009 03:54:52 PM
"If you didn't originally qualify for the rebate but do this time around, then the amount will be a credit on your 2008 tax return and will be included in your refund (not sent as a separate check). You can figure out the credit when you file your form 1040 for 2008 -- the instructions for form 1040 include the calculation, or your tax-filing software will figure the credit for you." Located on the second to last paragraph are some helpful links on how to include the rebate on your 2008 Tax Return.
Posted by: mother of 4 at 01/29/2009 04:49:38 PM
I did my daughters taxes for her, and she did not qualify last year, but the software I used told me that she did qualify this year for $600. According to this article it will come ADDED to her federal refund and not as a separate check(?)
Posted by: Nora at 01/29/2009 05:49:38 PM
What if you filed your taxes and didn't claim the credit??
Posted by: Patricia Van Dyke at 02/02/2009 02:48:11 PM
My husband and I are both retired on social security, althougH he works a part time job. We only got $300.00 in the rebate last year. Our neighbors on both sides of us got $1,800.Thsy are retired also. I wrote my Senator but still have no answer.