Beginning this spring, more than 130-million people will get rebate checks from the government in amounts from $300 to $1,200, plus $300 for each child, under an economy relief bill passed by Congress this week. All must file an income tax return for 2007 to qualify.
Who gets a rebate?
Anyone who pays taxes or earns at least $3,000, including through Social Security or veterans' disability benefits. Singles with adjusted gross income of more than $75,000 and couples with more than $150,000 get only partial rebates.
Who does not get a rebate?
People who earn less than $3,000, illegal immigrants, anyone who does not file a tax return, singles with incomes exceeding $87,000 and couples with incomes exceeding $174,000. The caps rise by $6,000 per child.
What do you have to do to get the rebate?
Eligible people must file a 2007 tax return with a Social Security number for each person listed.
How much is the rebate?
Single taxpayers get a rebate of at least $300, with couples receiving at least $600. The rebate will be equal to the taxes they paid, up to $600 for singles and $1,200 for couples, plus an additional $300 per child. That amount will be reduced by $50 for every $1,000 above the income limits of $75,000 for singles and $150,000 for couples.
People who earn too little to pay taxes but at least $3,000, including elderly people whose only income is from Social Security and veterans who live on disability payments, will get $300 if single or $600 if a couple.
How are the rebates calculated?
Rebates are calculated on the basis of taxpayers' 2007 adjusted gross income, which includes salaries and wages, interest, dividends, capital gains, taxable pensions, royalties and farm or rental income. It does not count contributions to individual retirement accounts, 401(k) retirement plans, tax-free health savings accounts or student loan interest payments. Rebates for low-income people who don't pay taxes, including the elderly and disabled veterans, will be a flat $300 if single and $600 for couples.
When will the rebates arrive?
The Treasury Department says the IRS will begin sending out rebates in May.
Will the rebates be deducted from taxpayers' regular tax refunds?
No, the rebates are on top of any tax refund.
Where does the money come from?
The government will borrow the money to pay for the rebates, adding to the federal deficit. The rebates are projected to cost about $151.7-billion this year and an additional $16.3-billion next year, according to the Joint Committee on Taxation.
Will taxes be withheld from the rebate checks?