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IRS
Will Send Stimulus Payments Automatically Starting in May 2008
Eligible
Taxpayers Must File a 2007 Tax Return to Receive Rebate
FEBRUARY 13, 2007 The Internal Revenue
Service advised taxpayers that in most cases they will not have to do
anything extra this year to get the economic stimulus payments beginning in
May.
“If you are eligible for a payment, all you have to do is file a 2007
tax return and the IRS will do the rest,” said Acting IRS Commissioner Linda
Stiff.
The IRS will use information on the 2007 tax return filed by the
taxpayer to determine eligibility and calculate the amount of the stimulus
payments.
The Act also provides for increased Section 179
expensing and increased depreciation allowances for 2008.
According to the Internal Revenue Service, tax
rebate checks will be sent to taxpayers starting in May of this year.
Taxpayers must file a 2007 tax return in order to receive a rebate check.
Most taxpayers will receive rebate check in the amount of $600 for
individuals and $1,200 for couples filing jointly. Some taxpayers with small
amounts of "qualifying income" (more than $3,000) and little or no income
tax liability will receive at least $300 for individuals and $600 for
married couples filing jointly. Qualifying income is generally the sum of
earned income, social security benefits, railroad retirement benefits, and
certain veteran benefits. Rebate amounts will be increased by $300 for each
child eligible for the Child Tax Credit.
Stimulus payments will be direct deposited for taxpayers selecting that
option when filing their 2007 tax returns. Taxpayers who have already filed
with direct deposit won't need to do anything else to receive the stimulus
payment. For taxpayers who haven't filed their 2007 returns yet, the IRS
reminds them that direct deposit is the fastest way to get both regular
refunds and stimulus payments.
Most taxpayers just need to file a 2007 tax return as usual. No other
action, extra form or call is necessary.
In most cases, the payment will equal the amount of tax liability on the
tax return, with a maximum amount of $600 for individuals ($1,200 for
taxpayers who file a joint return).
The law also allows for payments for select taxpayers who have no tax
liability, such as low-income workers or those who receive Social
Security benefits or veterans’ disability compensation, pension or
survivors’ benefits received from the Department of Veterans Affairs in
2007. These taxpayers will be eligible to receive a payment of $300 ($600
on a joint return) if they had at least $3,000 of qualifying income.
Qualifying income includes Social Security benefits, certain
Railroad Retirement benefits, certain veterans’ benefits and earned income,
such as income from wages, salaries, tips and self-employment. While these
people may not be normally required to file a tax return because they do not
meet the filing requirement, the IRS emphasizes they must file a 2007 return
in order to receive a payment.
IF
YOU DON'T FILE A TAX RETURN FOR 2007, YOU WON'T RECEIVE ANY PAYMENTS.
Recipients of Social Security, certain Railroad Retirement and certain
veterans’ benefits should report their 2007 benefits on Line 14a of Form
1040A or Line 20a of Form 1040. Taxpayers who already have filed but failed
to report these benefits can file an amended return by using Form 1040X. The
IRS is working with the Social Security Administration and Department of
Veterans Affairs to ensure that recipients are aware of this issue.
Eligible taxpayers who qualify for a payment will receive an additional
$300 for each child who qualifies for the child tax credit.
Payments to higher income taxpayers will be reduced by 5 percent of the
amount of adjusted gross income above $75,000 for individuals and $150,000
for those filing jointly.
Taxpayers must have valid Social Security Numbers to qualify for the
stimulus payment. If married filing jointly, both taxpayers must have a
valid Social Security Number. And, children must have valid Social Security
Numbers to be eligible as qualifying children.
Taxpayers who file their tax returns using an Individual Taxpayer
Identification Number issued by the IRS or any number issued by
the IRS are ineligible. Also ineligible are individuals who can be
claimed as dependents on someone else’s return, or taxpayers who file Form
1040-NR, 1040-PR or 1040-SS.
To accommodate taxpayers who file tax returns later in the year, the IRS
will continue sending payments until December 31, 2008. The IRS also
cautions taxpayers that if they file their 2007 tax return and then move
their residence that they should file a change of address card with the U.S.
Postal Service.
The IRS will mail two informational notices to taxpayers advising them of
the stimulus payments. However, taxpayers should be alert for tax rebate
scams such as telephone calls or e-mails claiming to be from the IRS and
asking for sensitive financial information. The IRS will not call or
e-mail taxpayers about these payments nor will it ask for financial
information. Scam e-mails and information about scam calls should be
forwarded to phishing@irs.gov.
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