How tax rebates work in stimulus package

[fed-up]

Source: San Francisco Chronicle

..
To help people who earn little or nothing - and might be more likely to spend their rebates - Congress said that anyone who had at least $3,000 in income from a job, self-employment, Social Security and/or certain veterans benefits would get a flat rebate of $300 if single or $600 if married filing jointly, even if they don't owe income tax.

If your 2007 federal tax liability is between $300 and $600 (single) or $600 and $1,200 (married), your rebate will be equal to whatever you paid in tax.

Anyone who gets a rebate of any size will get an additional $300 for each child eligible for the child tax credit in 2008. To qualify, the child must be younger than 17 on Dec. 31, 2008.

Higher-income people won't get anything.

..snip

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/02/12/BUOAV0BJP.DTL

[cushla_machree]

1. what confuses me is

The federal government is giving me back $200 on my taxes because I didn't make enough and overpaid them. So do people like me NOT get a refund?

[joeglow3]

2. If you made $3,000 in AGI

You WILL get a rebate check.

[efilon]

3. From reading the bill it

seems to me like it is like that last rebate that we got and will be paid back with our taxes next year. In other words, a loan not a rebate. Anyone know for sure? :shrug:

[fed-up]

8. from the article I posted

"The rebates represent a 2008 tax cut. But instead of getting the tax cut next year, when you file your 2008 return, you'll get it this year."

[joeglow3]

10. yep

Exactly. The last time we got a rebate, the tax cut was already in place, so it was really just a 6 month advance. This time, it is the same EXCEPT, the rebate is related to a NEW tax cut that takes place in 2008 only (a reduction of the lowest tax brackets and an expansion of the child tax credit). Thus, the majority of people will file their 2008 return as if nothing happened and get to keep their rebate (representing the effect of the ’08 tax cut).

[Juneboarder]

4. My wife and I are having our first child this August.

Would the child tax credit be available to us?

[EmperorHasNoClothes]

7. Unfortunately, no

It will depend on your most recent filing, and the refunds are supposed to come out in May/June.

[fed-up]

9. from the article I posted

"If it turns out that you would have gotten a bigger tax rebate based on your 2008 tax return, the IRS will refund you the difference. For example, a middle-income family that has a baby born in 2008 should be able to reap an extra $300 when they file their tax return next year, Luscombe says."

[Juneboarder]

13. Sorry for the triple posting...

My computer freaked out on me and when I next looked it posted my last comment 3 times. I don't know how to delete if, if possible, or I would have done so already. :)

Thank you for the info... my wife and I can take all the help we can get right about now.

[SlipperySlope]

15. My understanding is "yes".

My understanding is "yes", but not until 2009.

The tax rebate is an advance on a new credit that will show up for your 2008 taxes filed in 2009. The check you get this spring is an estimate of what your actual rebate will be, based upon your 2007 filing data.

When you file your 2008 taxes (in 2009) you will claim one additional child, and make up the extra $300 then.

Confusing enough?

[Juneboarder]

5. My wife and I are having our first child this August.

Would the child tax credit be available to us?

[Juneboarder]

6. My wife and I are having our first child this August.

Would the child tax credit be available to us?

[Zorra]

11. Thanks for the info.

:hi:

[LiberalFighter]

12. The last I knew whatever we receive this year will be taxed next year.

[RantinRavin]

18. wrong

it is not taxable income anymore than a normal tax refund is.

[mike_c]

14. so does that mean your 2007 tax liability is simply reduced...

...by $300 (or whatever)? Or does everyone who qualifies for a rebate get a check? It SOUNDS like the former if I read the OP correctly but that is tantamount to an economic stimulus that has ALREADY been spent. I mean, if you owe $500 in additional taxes (not uncommon for me) does this mean I'll only have to pay $200 of the amount I owe or does it mean I'll pay the full amount owed for 2007 taxes and get a rebate check for $300 later? The two scenarios might be equivalent from a revenue perspective but the second scenario will likely result in my "paying out" more in economically stimulating ways, e.g. doing something cool on vacation, buying something I might not otherwise buy, etc.

[high density]

16. Your 2008 tax liability is reduced

If you still owe on 2007 or earlier taxes by the time the check is cut, then they're going to deduct whatever you owe from the check. You still need to pay the money you owe for 2007 by April 15 unless you want penalties, etc. The checks aren't coming until spring and are basically an advance on a tax cut that wouldn't be realized until we file our 2008 tax returns.

[mike_c]

17. gotcha-- thanks!

That's what I'd originally thought.