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Tell 200 million taxpayers that they'll be getting a share of $130 billion in tax rebates and you're sure to bring smiles to a lot of faces. You'll also prompt many quizzical looks ... and an avalanche of questions.
Kiplinger.com has received more than 1,000 questions and comments about the tax rebate program since we began reporting on it this past February. Here are the answers to your most frequently asked questions. Since we first published this story in May, we've added even more answers to your questions. Click on the topic below that most concerns you.
Questions on the rebate mailing schedule
Questions on rebate eligibility
The Ultimate Question: Where's My Rebate?
REBATE AMOUNTS
Shorted on the rebate?
Wait a minute. I'm married, filed jointly. My husband has received a $600 rebate check. I thought that we would each receive $600 or $1,200 jointly. Where is the other half of our rebate?
Good question. Most married couples filing jointly qualify for a $1,200 rebate. Your payment may be less than the maximum for one of several reasons. If your tax liability for the year was less than $1,200, for example, you wouldn't qualify for the maximum. If your adjusted gross income was more than $150,000, the size of your rebate would have been squeezed. It can also be reduced to cover back taxes, child support or student loan obligations. Of course, it could be a mistake, too. Within a couple of weeks of getting your check, you should receive a notice from the IRS explaining how the amount was figured.
Shorted on a rebate, too?
I'm a single mother. I was told the adult of head of household gets $600 and my daughter would get $300. But my letter says I get $300 and my dependent gets $300. What's going on?
The letter should have explained why you got less than the full $600 rebate for single taxpayers. Was your tax liability for 2007 less than $600? Some low-income workers who didn't have a big enough tax bill to qualify for the $600 rebate could qualify for a $300 one.
Why no extra $300 for 18-year-olds?
Why was 17 the cutoff for dependents? That makes no sense.
Basically, Congress offered the extra $300 per child for any dependent child who qualifies for the child tax credit. And the cut off for that credit is age 17.
350,000 rebate checks failed to include $300 for children
I received my stimulus payment, but it didn't include money for my kids. Does the IRS plan to send me an additional check?
Yes. You're among about 350,000 taxpayers caught up in a snafu that resulted in the extra $300-per-child rebates not being included in their parents' rebate checks. You don't need to do anything to get the money. The IRS says it is identifying affected taxpayers and will send separate checks -- starting in early July -- to cover the shortfall.
Amend a return to claim rebate for kids?
Will obtaining a Social Security number later in 2008 help me get a rebate for my two dependent children? When I filed my 2007 returns in February, my children were not eligible for SSN, so I used the ITIN (individual taxpayer identification number). I anticipate that later this year they will get their SSNs. If I file an amended return and use the SSN instead of ITIN, will I get the $300 per child?
Sorry, but the amended return won't bring you an extra rebate. All is not lost, however. Remember, the rebate is really the advance payment of a 2008 tax credit. Because you did not get the $300 for each child via a rebate, you can claim the credit for them when you file your 2008 return, if they have valid Social Security numbers by that time. You'll get the money as either a bigger refund or lower tax bill next year.
Back taxes or back child support owed: Where does the rebate go?
My ex husband owes my son child support and he owes back taxes, too. Will the IRS take his stimulus check to cover his back taxes or will it go to my son?
The IRS can intercept a rebate to cover back taxes, back child support or unpaid student loans. Your question is which debt gets first claim on the dough? No surprise here: The IRS will use the money to cover the tax debt first; only if money is left over will it go toward the child support.
Paying taxes on the installment plan: What happens to the rebate?
I'm paying my 2006 tax bill on the installment plan and have made all my payments on time. Will I get my rebate, or will the IRS seize it and apply it to my tax bill?
Your rebate will go to reduce what you owe. On the bright side, that will reduce the amount of interest and penalties you owe on the tax debt. If your rebate is enough to wipe out the old tax bill, you'll get any leftover amount as a rebate.
If I'm on an installment plan for 2007 and on time with my payments, will I still be receiving a check, or will it go to cover the taxes owed for 2007? I saw the same question, but for 2006 taxes, which, in my case, are paid.
The same rules are supposed to apply to rebates that apply to refunds, and part of the installment agreement is that any refunds go first to pay the back taxes. So, if the system is working as it should, I'm afraid your rebate will be applied to the balance due on your '07 return. If that happens, you should get a notice from the IRS explaining that the balance due has been reduced.
Student loan debt and the tax rebate
I owe back payments on my student loans. Will the IRS use any rebate to pay that back?
Yes. The IRS can intercept your rebate -- just as it can a tax refund -- and apply it against student loan debt on which you have defaulted.
The rebate and back state taxes
If I owe for state taxes, not federal, will the state intercept my rebate check?
If the state has reported the debt to the IRS then, yes, your rebate can be diverted to cover what you owe state revenuers. If that happens, you should receive a notice from the IRS explaining what happened.
Supplemental Security Income and the rebate
Will the IRS keep my stimulus check if I am paying back an overpayment on my SSI benefits?
Generally, overpayments of SSI benefits are recovered by reducing future checks. If you are no longer receiving SSI, however, the government can intercept your rebate to repay the overpayment of SSI benefits. If this happens, you should receive a notice explaining what's what.
The rebate's impact on next year's tax bill
Is this a rebate on 2007 taxes, or an advance on next year's refund like the last tax rebate?
You have a good memory and, like the 2001 rebates, this really ought to be called a "prebate" because it is a prepayment of a special tax credit created for 2008. Because the point is to stimulate the sluggish economy, though, Congress didn't want Americans to have to wait for their money until they file 2008 tax returns next spring. So, the prepayment was authorized and the "rebate" misnomer was born.
The rebate is based on information on your 2007 return. If things change (say you have a new baby during 2008) and you really deserve a bigger credit than the rebate you get this year, you'll get the added amount when you file next spring. What happens if things change and you deserve a smaller credit than the amount you received as a rebate (say a child turns age 17 in 2008)? Don't worry. You don't have to pay back the excess.
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REBATE MAILING SCHEDULE
Which Social Security number controls the mailing schedule?
Whose Social Security number will the IRS go by when it mails the stimulus check if I'm married filing jointly?
The IRS will use the first Social Security number on your return to determine the mailing date of the rebate.
Late filers and the rebate schedule
I filed after April 15 and the payment date for my Social Security number has passed. How long will it take for me to get my stimulus payment?
Don't start looking for your check for at least six weeks after you filed your return. The IRS says it will take at least that long to get you your money.
Filing an extension affects timing of the rebate
We filed for a filing extension. Will we still get a rebate check?
A rebate delayed is not a rebate denied, but the IRS says it will take at least six weeks from the time you actually file your 2007 return to get your rebate check. So if you file at the extension deadline of October 15, you may not get your check until early December.
Social Security benefits and the rebate
Will Social Security recipients who have their checks deposited via direct deposit receive their rebates on the direct deposit schedule or the mail schedule?
How your Social Security benefits are deposited has no bearing on the payment of the tax rebate. If you completed the direct deposit information on your 2007 tax return (regardless of whether you had a refund coming), your rebate will be direct deposited to the account listed on your tax return. If not, your rebate check will be mailed to you.
Refund anticipation loans and the tax rebate
I chose direct deposit for my 2007 tax refund but also requested a refund anticipation loan from my preparer. How does that affect my stimulus payment?
Taxpayers who took RALs or agreed to have return preparation fees deducted from their refunds cannot receive their stimulus payments by direct deposit. You'll get a paper check even though your tax refund was deposited directly into your account.
How changing banks affects direct deposit of rebate
I had my 2007 tax refund direct deposited and have since changed banks. Will my rebate check be sent back to IRS then mailed?
Yes. When the IRS tries to directly deposit your rebate into a closed account, the electronic payment will be rejected. The agency will then convert your rebate to a paper check and mail it to you.
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REBATE ELIGIBILITY
Does no refund mean no rebate?
We didn't receive a refund this year. Instead, we had to pay extra when we filed our 2007 return. Does that matter when we get our tax rebate, or do we even get one?
Whether you owed extra tax or got a refund has no bearing on your qualification for a rebate. Check out our tax rebate calculator to see if you qualify. If you do, the timing of your check will be based on the last two digits of your Social Security number. See the schedule.
No Social Security number means no rebate
My husband files his taxes with a tax identification number because he does not have a Social Security number. Will we still get the stimulus?
No. Congress specifically banned rebates for anyone filing without a valid Social Security number. On a joint return, both spouses must have a valid Social Security number or both lose out on the rebate.
Does a business loss wipe out a rebate claim?
We filed for a loss on our business, but my wife had wages. We filed jointly. Do we qualify for a rebate check?
The rebate is based on your net tax liability on your 2007 return. If your business loss wiped out the tax bill all together, you should still receive a rebate of $600 if your wife earned at least $3,000 in wages. Because the rebate is actually a prepayment of a 2008 credit, there's a chance you could qualify for more of the credit when you file next spring.
No rebate for filers of 1040NR
I'm a U.S. citizen living overseas. I filed a 1040NR. Am I eligible for a rebate check?
Social Security disability and the tax rebate
I am on Social Security disability. Do I still get a rebate check?
Yes. Congress came up with special rules for citizens who otherwise would not need to file tax returns so they could be eligible for the rebate. Recipients of Social Security disability benefits can qualify. Find all the details here.
Death and the tax rebate
My father passed away in 2007, and I'm executor of his estate. Should I expect a rebate check?
If a 2007 tax return was filed for your father and he would have been eligible for the rebate were he still alive then, yes, you can expect a rebate. Rebates are based on 2007 tax returns.
Bankruptcy and the tax rebate
I heard that if you have filed bankruptcy in 2007, you will not receive a rebate check. Is this true?
No. The tax rebate is based on the information on your 2007 tax return. If you are otherwise eligible for a tax rebate, filing for bankruptcy will not affect that fact.
Retirees and the rebate
Do the same rebate amounts apply to retirees as wage earners?
Your work status doesn't matter. The rebates are based on the information on your 2007 tax return. Whether you are working or retired, you can qualify for the maximum rebate if you owed at least $600 in taxes for 2007 if you filed a single return or $1,200 if you filed a joint return.
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REBATE SCAMS
Responding to IRS emails on the rebate
I got an e-mail from the IRS asking for information so it could directly deposit my rebate into my bank account. Will that speed things up?
No, but it could cost you. This is a phishing scam; the IRS does not send e-mails requesting personal or banking information. This has become so prevalent, however, that the agency has set up a special mailbox and asks taxpayers to forward suspicious e-mails to phishing@irs.gov. The IRS will try to track the suspicious e-mail to its origins and shut down the scam.
WHERE'S MY REBATE?
Call in the big guns for rebate help
I still haven't received my rebate check. When I call the IRS help line, I either get a busy signal or am put on interminable hold. I'd love to help stimulate the economy, but how can I shake my money loose?
First, realize that, as of the middle of June, just 78 million rebate payments had be mailed or electronically transmitted to bank accounts. That means that about 40% of eligible taxpayers are still waiting.
So, you're not alone in your frustration. Although the IRS told Congress in June that it was proud about how smoothly the rebate program is going, the agency admitted there have been plenty of glitches ... like the 350,000 parents who didn't get the extra $300 for each qualifying child or the 22,000 who got someone else’s letter explaining how their rebate was being calculated or the 1,500 taxpayers whose Social Security numbers were accidentally disclosed when the IRS sent their rebates to the wrong bank accounts.
The agency has also admitted that it has been overwhelmed with inquiries about the rebates. In one week in early June, the IRS received 6.2 million call attempts compared with about 1.5 million the year before. So far this year, nearly 25 million taxpayers who got through the busy signals at the IRS help lines subsequently gave up and hung up before getting to a real person
What can you do to figure out where your money is? Try the agency's Where's My Stimulus Payment? tool. Or, go over the IRS's head and call your U.S. representative or one of your U.S. senators. A staffer in a local or D.C. office should be able to help cut through the red tape at the IRS to get you an answer. Check a phone book for a local number or call the U.S. Capitol switchboard at 202-224-3121 and ask to be put through to your congressman or woman's office.
RELATED LINKS | |||
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The Tax Rebate Calculator | ||
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Will My Rebate Check Ever Come? | ||
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Is This Leagal? Ways to Boost Your Tax Rebate | ||
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How to Make Your Tax Rebate Go Further | ||
POSTED BY: p ruvolo (June 25, 2008 05:32 PM)
our home burned down in the CA wildfires. I suppose we do not get $1200 because the loss reduced our tax liability to 0? What a country!
POSTED BY: kevin mccormally (June 27, 2008 10:33 AM)
For p ruvolo, whose casualty loss reduced tax liability to zero. First, condolences on the loss of your home. But here's some good news: Remember, you get two bites at the stimulus apple. Since it is an advance payment of a 2008 tax credit, if you don't get the benefit via a rebate this summer, you can claim the credit on your 2008 return when you file next spring (assuming you qualify based on 2008 income).
--kevin mccormally (editorial director for Kiplinger)
POSTED BY: John (not a Tax guy) (June 27, 2008 03:41 PM)
Tracie - If the child was 17 yrs old in 2007, then they can be claimed.
Dianna - If you are separated, you will have to spit the money among yourselves. If that can't be done, take care of it in the divorce settlement.
P. Ruvolo - Your house may have burned down, but you had a job (and filed a return) in 2007, right? Plus your house burned this year. Either way, your tax liability comes from INCOME tax NOT property tax.
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