Economic Stimulus Payment Q&As: Offsets, Taxpayers Outside the U.S. and More


Notice: Historical Content

This is an archival or historical document and may not reflect current law, policies or procedures.

Updated Aug. 5, 2008

Following are answers to questions regarding the economic stimulus payments. Scroll down the list for information on offsets, taxpayers residing outside the United States and other topics. Or choose one of the following categories:

  1. Eligibility
  2. When Will I Get the Payment?
  3. Did I Get the Right Amount?
  4. Amended Returns
  5. Change of Address
  6. Taxpayer Identification Numbers
  7. Direct Deposit
  8. Armed Forces
  9. Business
  10. Offsets, Taxpayers Outside the U.S. and More

Offsets, Taxpayers Outside the U.S. and More

Q. My stimulus check was lost or destroyed. How do I get a new one?

A. Call the IRS toll-free at 800-829-0582 and, when asked for an extension, enter 726. Overseas taxpayers may call 215-516-2000 (not a toll-free number). If your stimulus check has not been cashed, we can normally provide a replacement within six to eight weeks. If your stimulus check has been cashed, the Financial Management Service will provide a claim package which includes a copy of the check. FMS will review the claim and the signature on the cancelled check before determining whether another refund can be issued.

Q. I'm eligible for a payment but I still owe federal income tax from a prior year. Will my payment be reduced?

A. Yes. For this purpose, the stimulus payment is treated like any other tax refund. This means that part or all of your payment can be used to pay past-due federal or state income taxes or non-tax federal debt such as student loans and child support.

Q. How will I be notified if my stimulus payment was used to offset an outstanding debt?

A. If this occurs, you will receive a letter explaining how the stimulus payment was applied.

Q. I am filing a joint tax return with my spouse who has a past-due obligation. How can I ensure that I still get my share of our joint stimulus payment?

A. In this situation, you are considered an injured spouse. To get your share of a joint income-tax refund, as well as your share of the stimulus payment, you can file Form 8379, Injured Spouse Allocation. You will get your share of these payments, and your spouse’s share will be applied to his or her past-due federal or state income taxes or non-tax federal debt such as student loans and child support. Your allocation request will be processed more quickly if you attach Form 8379PDF to your regular 2007 federal income tax return.

Q. How will the IRS treat a stimulus payment when there is an innocent spouse involved?

A. An innocent spouse determination for a 2007 income tax return would follow the filing of the return. In most instances, the stimulus payment will be issued before such a claim is filed and before a determination can be made.

Q. My spouse and I have divorced and the stimulus payment check is made out to both of us. Can I cash it?

A. If the check is made payable to both of you, then both must endorse the check. Even if you and your spouse are now divorced, both must sign the check. By law, each spouse is considered to receive half of the payment in cases where a joint 2007 return was filed.

If the filers chose to have their tax refund direct-deposited, the stimulus payment will be directly deposited into the same account that received the tax refund.

Q. Is my stimulus payment taxable?

A. No. You will not owe tax on your payment when you file your 2008 federal income tax return. But you should keep a copy of the IRS letter you receive later this year listing the amount of your payment.

Q. If my stimulus payment is not going to affect my 2008 tax refund or increase the tax I owe next year, why is it I need to retain the letter that lists how much I received?

A. In the event you do not qualify for the full amount on your 2007 return but you do on your 2008 return, you will need to have the letter as a record of the amount you previously received.
Q. Will the payment I receive in 2008 reduce my 2008 refund or increase the amount I owe for 2008?

A. No, the stimulus payment will not reduce your refund or increase the amount you owe when you file your 2008 return.

Q. I owe some money on my 2007 tax return but the amount I owe is less than my expected stimulus payment. Can I wait to pay the balance due and simply let my stimulus payment cover it?

A. You should file your 2007 return and pay the entire balance. You should not wait for your economic stimulus payment to offset the balance due. If you wait, penalties and interest will accrue between April 15 and the date the balance is paid, even if it is ultimately covered by the stimulus payment.

Q. Who can sign a tax return if the taxpayer is mentally or physically unable to sign it?

A. If the taxpayer is mentally incompetent and cannot sign the return, it must be signed by a party with a valid power of attorney or a court-appointed representative who can act for the taxpayer. If the taxpayer is mentally competent but physically unable to sign the return or POA, a valid "signature" is defined under state law. It can be anything that clearly indicates the taxpayer's intent to sign. For example, the taxpayer's "X" with the signatures of two witnesses might be considered a valid signature under a state's law.

Q. Is the "stimulus payment" statement required for correct processing of low-income/Social Security/VA benefits returns? Will the lack of the statement have a detrimental effect on taxpayers whose returns were filed without it?

A. No, as long as the information is in the correct place the IRS will be able to calculate the correct stimulus payment amount.

Q. If I live in Puerto Rico, the U.S. Virgin Islands, American Samoa, Guam or the Commonwealth of the Northern Mariana Islands, will I get a stimulus payment?

A. In many cases, the answer is yes. But special rules in the law apply to these five U.S. territories (possessions). In general, the tax authorities in each possession will make stimulus payments to eligible residents. The law provides guidelines under which the Treasury Department will make payments to each possession for this purpose. People in these areas with questions about the economic stimulus payments should contact their local tax authority.

Q. Federal employees residing in some U.S. territories are required to file two tax returns, one with the territory and one with the IRS. Will two checks be issued, and, if so, should they return one of the checks? Which check should be returned?

A. Individuals residing in the U.S. territories should receive their economic stimulus payment from the territory. If a stimulus payment is received from both the United States Treasury and the territory, the Treasury payment must be returned to the Internal Revenue Service. The U.S. territories include American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and the U.S. Virgin Islands.