Economic Stimulus Payment Q&As: Eligibility
Updated July 16, 2008
Following are answers to some of the most commonly asked questions regarding the economic stimulus payments. Scroll down for eligibility-related information or choose from one of the following categories:
- Direct Deposit
Q. I have not yet filed my 2007 tax return. Can I still qualify for a stimulus payment this year?
A. Yes, but you must file a 2007 tax return. The IRS encourages you to file a return even if your income is low or much of your income is tax-free. If you qualify for a payment, you can ensure that you get it by filing your return by Oct. 15, 2008.
Q. What do I need to do to get an economic stimulus payment?
A. All you need to do is file a federal income tax return for 2007. If you requested an extension to file, you will fill out your return, reporting all your income, deductions and credits as you normally would prior to Oct. 15, 2008. Even if you are not otherwise required to file a tax return, you must file a 2007 return prior to Oct. 15, 2008 in order to receive a payment this year. Although some filers, such as high-income filers, will not qualify for a stimulus payment, most will.
The IRS has provided special filing instructions for those who do not otherwise have a filing requirement. This includes low-income workers, Social Security beneficiaries, certain railroad retirees and those who receive certain benefits from the Department of Veterans Affairs. The instructions explain which lines on the tax return the filers need to complete.
You do not need to calculate the amount of the stimulus payment. If you want to estimate the amount of your payment, use the Economic Stimulus Payment Calculator.
If you file a return and qualify for a payment, the IRS will automatically figure it and send it to you. The IRS will also send you a notice showing the amount of your payment. You do not need to call the IRS or fill out any other special forms.
Q. How do I find out if I am eligible?
A. The easiest way to find out is to use the Economic Stimulus Payment Calculator. Most people with a 2007 net income tax liability qualify. This includes most people who get tax refunds. Net income tax liability is the amount shown on Form 1040, Line 57, plus the amount on Line 52. For 1040A filers, it is the amount on Line 35 plus the amount on Line 32. For Form 1040EZ filers, it is the amount on Line 10.
Families with children under 17, as of Dec. 31, 2007 will qualify for an additional payment. Some people with no tax liability also qualify. This includes Social Security and Railroad Retirement beneficiaries, recipients of certain veterans’ payments, low-income workers with earned income and/or benefits of at least $3,000 and individuals who have combined income of at least $3,000 from any combination of these sources.
Some higher-income taxpayers will not receive a stimulus payment or will receive a reduced payment.
Q: I normally don't need to file a tax return. How do I know if I'm one of those people who may be eligible to receive an economic stimulus payment?
A: This group includes some recipients of Social Security, Railroad Retirement or veterans' benefits as well as taxpayers who do not make enough money to normally have to file a 2007 tax return. For example, this can include low-income workers, those who receive Social Security benefits or veterans’ disability compensation, pension or survivors’ benefits from the Department of Veterans Affairs in 2007. These people 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. For people filing joint tax returns, only a total of $3,000 of qualifying income from both spouses is required to be eligible for a payment.
Q: I normally don't have to file a tax return but have enough in qualifying income to receive a stimulus payment. How do I find out more about how to file a tax return? Is there a special form?
A: The IRS developed a special Form 1040A requiring only a few lines to be completed. If you qualify, all you need to do is fill out Form 1040A where indicated. A sample version of Form 1040A illustrates which lines to fill out. These materials will be included in a special mailout this summer to people who don't normally file. More information is available in Fact Sheet 2008-16.
Q. If I'm filing a tax return this year just to get a stimulus payment, by when do I have to file?
A. The sooner you file the sooner you can receive your stimulus payment. If you have obtained a valid six-month extension to file or if you are filing to establish your eligibility for the stimulus payment, filing by Oct. 15, 2008 means the IRS can process your return and issue a stimulus payment before the end of the year.
Q. I want to estimate my payment. Please explain how it is figured.
A. There are two parts to the stimulus payment: a basic amount based on tax liability, filing status or other qualifying factors if there is no tax liability and an additional amount based on whether a qualifying child is reported on the return.
Basic Amount of Payment: Taxpayers who had a net income tax liability will receive a payment, unless they can be claimed as dependents on someone else’s return, are high-income individuals or do not have a valid Social Security number. The payment is equal to the taxpayer’s net income tax liability but no more than $600 for a single person or $1,200 for a married couple filing a joint return. The minimum payment is $300 for a single person or $600 for a married couple filing jointly.
People with no net income tax liability will usually get a minimum payment of $300 for a single person or $600 for a married couple filing jointly as long as they have qualifying income of at least $3,000. To figure your qualifying income, add together the following amounts:
Wages that are reported on Form W-2.
Net self-employment income.
Social Security benefits reported in box 5 of the 2007 Form 1099-SSA, which would have been received in January 2008. People who do not have a Form 1099-SSA may estimate their annual Social Security benefit by taking their monthly benefit and multiplying it by the number of months during the year they received the benefit.
Certain Railroad Retirement benefits reported in box 5 of the 2007 Form 1099-RRB, which recipients would have received in January 2008.
Veterans’ benefits received in 2007, including veterans’ disability compensation and pension or survivors’ benefits received from the Department of Veterans Affairs. People who weren’t required to file a tax return can estimate their annual veterans’ benefits by taking their monthly benefit and multiplying it by the number of months during the year they received the benefit.
Nontaxable combat pay if the taxpayer elects to include it as earned income.
Extra Money for Qualifying Child: Eligible taxpayers who qualify for a payment may receive an additional $300 for each qualifying child. To qualify a child must be under age 17 as of Dec. 31, 2007.
Phase Out: The stimulus payment –– both the basic component and the additional funds for qualifying children –– begins to phase out for individuals with adjusted gross incomes (AGI) over $75,000 and married couples who file a joint return with AGI over $150,000. The combined payment is reduced by 5 percent of the income above the AGI thresholds.
Here are two examples of how the phase out works:
An individual with AGI of $80,000 and federal income tax liability in excess of $600 would qualify for a basic rebate of $600. Because this individual’s AGI exceeds $75,000, however, her rebate is reduced by $250 (the credit is reduced by multiplying the amount of AGI over $75,000 by 5%). The taxpayer receives an economic stimulus payment of $350.
A married couple with two children, AGI of $160,000 and federal income tax liability before the child tax credit exceeding $1,200 qualifies for a basic rebate of $1,200 and an additional qualifying child credit of $600 for a total rebate of $1,800. But because the couple’s AGI exceeds $150,000, their rebate is reduced by $500 (the amount of AGI over $150,000 multiplied by 5%). The couple receives an economic stimulus payment of $1,300.
Use the Economic Stimulus Payment Calculator to determine your eligibility and estimate the amount of your payment.
Q. I am filling out the special Form 1040A to report my qualifying income. Which Social Security benefits should I report on Line 14a?
A. The economic stimulus law refers to the same definition of Social Security and Railroad Retirement benefits used in IRS Publication 915. Thus, Social Security monthly retirement, survivor and disability benefits, or the Tier 1 Railroad Retirement benefits equivalent to those Social Security benefits, all count. This is the amount reported to you by the Social Security Administration as “Net Benefits for 2007” in Box 5 of Form SSA-1099 or by the Railroad Retirement Board in Box 5 of Form RRB-1099. Report this amount on Line 14a, Form 1040A. Determine the amount of your Veterans' benefits by multiplying your monthly benefit by the number of months during 2007 that you received the benefit. Supplemental security income (SSI) payments are not considered Social Security benefits and thus cannot be included. Because SSI is not taxable, it is not reported to you on Form SSA-1099.
Q. Does my supplemental security income (SSI) qualify as Social Security benefits for the purpose of the Economic Stimulus Payment?
A. No, supplemental security income (SSI) payments are not considered Social Security benefits and cannot be included. Because SSI is not taxable, it is not reported to you on Form SSA-1099. Only the amount shown in Box 5 of Form SSA-1099 is consider to qualify as Social Security benefits for purposes of the Economic Stimulus Payments.
Q. Are pension and annuity amounts provided by state, federal or private sector employers considered "qualifying income" in determining eligibility for the economic stimulus payment by those who are not otherwise required to file?
A. No, these payments are not included in the legal definition of "qualifying income."
Q. Does rental income qualify as qualifying income?
A. Rental real estate income is not earned income for purposes of the economic stimulus payment, unless it is net earnings from self-employment, as is certain farm rent or income received in the business as a real estate dealer.
Q. My child turned 17 in December 2007. Do I still get the extra child payment?
A. Not in this case. Eligible taxpayers who qualify for a payment may receive an additional $300 for each qualifying child. But to qualify, a child must be under age 17 as of Dec. 31, 2007. In other words, if a child was 16 or younger at the end of 2007 and meets the other eligibility requirements, then the child will qualify for the $300 stimulus payment.
Q. Will receiving an economic stimulus payment in any way affect my eligibility for other federal benefits, such as temporary assistance for needy families, food stamps or Social Security? Will it count as income for purposes of my Social Security benefits?
A: No. The stimulus payments do not affect eligibility for federal benefits.
Q. If an individual dies, what happens to his or her direct deposit or stimulus check?
A. Stimulus payments are issued in the name of the individual eligible for payment on a filed 2007 income tax return or to the account designated by the individual on that return. This includes situations where a person has died after filing a return or where the final 2007 income tax return was filed by a personal representative or surviving spouse. Any issues or concerns involving a decedent's filed return or the related stimulus payment should be addressed by the legal representative of the decedent's estate. See Publication 559 for more useful information for survivors and personal representatives.
Q: I know some people won’t get a stimulus payment. How do I know if I’m one of them?
A: You won’t get a stimulus payment in 2008, if any of the following apply to you:
You don’t file a 2007 tax return.
Your net income tax liability is zero and your qualifying income is less than $3,000. To determine your qualifying income, add together your wages, net self-employment income, nontaxable combat pay, Social Security benefits, certain Railroad Retirement benefits and certain veterans’ payments.
You can be claimed as a dependent on someone else’s return (whether or not you actually are claimed as a dependent on someone else's return). For example, this would include a child or student who can be claimed on a parent’s return.
You do not have a valid Social Security Number.
You are a nonresident alien.
You file Form 1040NR or Form 1040NR-EZ, Form 1040PR or Form 1040SS for 2007.
Q. I don’t qualify for a stimulus payment based on my 2007 return. But my tax situation will be different in 2008. Will I qualify for any special benefit?
A. Possibly. The 2008 tax instructions will include a worksheet to help those who did not qualify for a payment or those who received a reduced amount determine if they can obtain a benefit when they file their 2008 tax returns next year.