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July 16, 2008

Common questions about the economic stimulus payments

ELIGIBILITY

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 those who receive veterans’ disability compensation, pension or survivors’ benefits from the Department of Veterans Affairs. 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.

ADDRESS CHANGES

Q. I have moved since filing my 2007 tax return. How will my payment reach me?

A. Anytime that you move you should file a Form 8822 with the IRS and a change of address notice with the U.S. Postal Service. This will ensure your check and other mail from the IRS is sent to your new address. If the check has already been mailed and you did not provide an update, the check will likely be returned to the IRS. You may call the IRS at 1-866-234-2942 to provide the Assistor with your new address so that they can take steps to have the check reissued.

DECEASED TAXPAYERS

Q. If an individual dies, what happens to his or her direct deposit or stimulus check?

A. Stimulus checks will be sent to eligible individuals even if they have died. The stimulus payment will be issued in the name of the deceased individual eligible or to the account designated by the individual on that return. This includes situations where a person dies 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. [Updated 3/17/08]

PAYMENT TIMING

Q. When will I get my payment?

A. It will generally take a minimum of eight weeks after you file your return to get your stimulus payment.

Payments, both direct deposits and paper checks, have gone out for most of those returns filed by April 15.  Payments will continue to be issued through 2008 for returns filed after April 15. Please allow 8 weeks after filing your tax return before checking on the status of your Stimulus Payment. To check on the status of your Stimulus Payment, please visit us online at, Where’s My Stimulus Payment?, or call the toll-free Rebate Hotline at 1-866-234-2942.

Q. I heard that the IRS has finished sending the Stimulus Payments, is it too late to for me to claim mine?

A. It is not too late.  There is still time to file and claim your economic stimulus payment.  The IRS will continue processing tax returns and issuing stimulus checks for much of the year.   Social Security recipients and veterans who don't normally need to file returns as well as people who received extensions for filing, should file by October 15 to ensure they receive a payment before the end of the year.

Q. I filed after April 15 and the payment date for my Social Security number has passed. How long will it take for me to get my stimulus payment?

A. It will generally take a minimum of eight weeks after you file your return to get your stimulus payment.

Q. It has been more than eight weeks since I filed my return and my payment has not arrived. Can the IRS trace my payment to find out what happened to it?

A. Yes, if it has been more than eight weeks since you filed your return and your payment has not arrived, please visit an IRS Taxpayer Assistance Center or call the toll-free Rebate Hotline at 1-866-234-2942. A list of all Taxpayer Assistance Centers in your state is available at Contact My Local Office.

PAYMENT DELAYS

Q. Will filing an amended return affect my stimulus payment? 

A. An amended return can result in a delayed stimulus payment if the amended return is received before the stimulus payment is issued.  In this situation the stimulus payment will be issued, if applicable, once the amended return has been processed.  Based on the typical processing time for an amended return, the amended return could delay the issuance of the stimulus payment by 8–12 weeks.

In most cases, an amended return will not impact the stimulus payment. While amended returns will be processed to correct the income, deductions and income tax as appropriate, the economic stimulus payment amount will not be adjusted based on an amended return.  The reason for this is that the reconciliation provision within the Stimulus Act gives taxpayers an opportunity to claim and receive any underpayment amount as a Recovery Rebate Credit when they file their 2008 return next year. 
 
In very limited circumstances, amended returns that are filed solely to include previously unreported qualifying income may result in the issuance of a stimulus payment that was not issued based upon a taxpayer's original return.   However, these circumstances are generally limited to low-income individuals and recipients of Social Security, some railroad retirement or certain veteran's benefits who filed their original returns prior to the IRS issuing guidance for their situation.

Q. I filed my return on time, but I haven’t received my stimulus payment, even though the payment date listed for my Social Security number has passed. Why?

A. In general, the payment schedule only applies if your return was received and the IRS finished processing it before April 15. If you filed your return on time, but close to the April 15 deadline, the IRS may not have finished processing it before April 15.

Processing times for tax returns and stimulus payments vary. If you are getting a regular income-tax refund, the IRS will send you that refund first. Normally, your stimulus payment will follow one to two weeks later.  If you are not expecting a regular tax refund, your stimulus payment generally should arrive a minimum of eight weeks after you file.

Also, if you chose direct deposit and requested a Refund Anticipation Loan (RAL) or had your refund deposited into more than one account, your stimulus payment will be issued as a paper check rather than a direct deposit.

PAYMENT TYPES: DIRECT DEPOSIT VERSUS CHECK

Q. I chose direct deposit for my 2007 tax refund but also requested a refund anticipation loan (RAL) from my preparer. How does that affect my stimulus payment?

A. Taxpayers who use Refund Anticipation Loans (RALs) or paid for their return preparation or filing by having those fees deducted from their refunds cannot receive their stimulus payments by direct deposit and instead will get paper checks.

Q. Will the IRS allow me to provide it with direct deposit information, if I didn’t include that information on my original tax return?

A. You cannot correct direct deposit information or request a direct deposit after a return has been filed.

Q. Is there something I can do to prevent my stimulus payment from being automatically deposited into the account that I identified for the direct deposit of my regular refund?

A. Generally, if you designated direct deposit on a tax return, the stimulus payment will go to the account number you designated. If the account number is no longer active, the IRS will send you a paper check. This process may take several weeks.

Q. I chose direct deposit for my 2007 tax refund but also requested my electronic filing and/or tax preparation fees be deducted from my refund. Does that affect my stimulus payment?

A. If you requested that your electronic filing or tax preparation fee be deducted from the amount of your refund, you have entered into a financial agreement with the tax preparation provider or e-file software company for a refund anticipated check (RAC). Although your regular income tax refund is deposited into your bank account it has been routed through your electronic filing software provider or tax preparation provider’s bank, not directly from the IRS. When this happens you will get your stimulus payment in the form of a paper check that will be issued a minimum of eight weeks after the return was filed.

Q. I chose to have my tax refund deposited onto a "stored value card" or debit card through the professional tax preparer I used. Will my stimulus payment be directly deposited onto that same stored value card or debit card account?

A. Yes, unless you requested a refund anticipation loan (RAL) or the account has been closed, in which case you will receive your economic stimulus payment by paper check. Because the IRS must wait until the money is returned, this process may take several weeks.

PAYMENT AMOUNTS

Q. I received my stimulus payment, but it was less than what my friends and neighbors received. Why?

A. Your economic stimulus payment is based on information provided on your 2007 income tax return.

The maximum basic payment is $600 for singles or $1,200 for married couples. Many parents are also receiving an additional $300 for each qualifying child, born after Dec. 31, 1990.

Not all taxpayers will qualify for the maximum amounts.  Your payment may be less than the maximum for one or more of the following reasons:

  • You are single and your net income tax liability is less than $600.
  • You are married and your net income tax liability is less than $1,200.
  • You are single and your adjusted gross income (AGI) is more than $75,000. On Form 1040, AGI is the amount on Line 37.
  • You are married filing a joint return and your AGI is more than $150,000.
  • You married but filing separately and will receive your payment as if you were single.
  • You owe back taxes that reduced your payment.
  • You have non-tax federal debts such as unpaid student loans or child-support obligations that reduced your payment.

Around the time you receive your payment, you also received a notice from the IRS explaining how your payment was calculated. It is important to keep this notice as a record of your economic stimulus payment. If you owed back taxes or non-tax debts that were offset or deducted from your stimulus payment, you should receive a notice with additional information about the offset.

Q. The notice I received shows I should have gotten more than the government actually paid me. What happened?

A. It could be that the payment amount was what remained of your stimulus payment after it was reduced, or offset to collect back taxes or other debts such as a student loan or child support.  In this circumstance, a separate notice is mailed about two weeks after the stimulus payment has been made.

Q. I received a stimulus payment and I want to verify that it is correct. How do I figure the payment, myself?

A. The easiest way to figure the amount is to use the Economic Stimulus Payment Calculator on the IRS.gov Web site. Essentially, there are two parts to the stimulus payment: a basic amount based on tax liability, filing status or other qualifying income, 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: If you had a net income tax liability for 2007, you will generally receive a payment, unless you can be claimed as a dependent on someone else’s return, had higher income or do not have a valid Social Security number.

Your net income tax liability is one of the following:

  • On Form 1040, the amount shown on Line 57 plus the amount on Line 52.
  • On Form 1040A, the amount shown on Line 35 plus the amount on Line 32.
  • On Form 1040EZ, the amount on Line 10.

NOTE: Net income tax liability is not the same as the amount of tax withheld from your pay, the amount of your refund or the balance due on your return.

Your stimulus payment is equal to your net income tax liability, but no more than $600, if you are single, or $1,200, if you are married filing a joint return.

If you had no net income tax liability for 2007, you are usually getting a minimum payment of $300, if you are single, or $600, if you are married filing jointly, as long as you had qualifying income of at least $3,000 in 2007. To figure your qualifying income, add together the following amounts:

  • Wages that are reported on Form W-2.
  • Net self-employment income that is taken into account in computing taxable income.
  • Social Security benefits reported in box 5 of the 2007 Form SSA-1099 you received in January 2008. If you don’t have this form, you can estimate your annual benefit by multiplying your monthly benefit by the number of months (usually 12) you received benefits during 2007.
  • Certain Railroad Retirement benefits reported in box 5 of the 2007 Form RRB-1099 you received in January 2008.
  • Veterans’ benefits received in 2007, including veterans’ disability compensation and disability pension or survivors’ benefits received from the Department of Veterans Affairs. You can estimate your annual benefit by multiplying your monthly benefit by the number of months during 2007 you received benefits.
  • Nontaxable combat pay if you chose to include it as earned income on your 2007 return.

Note: Supplemental Security Income (SSI) is not considered qualifying income and is not included for the purpose of establishing eligibility for the stimulus payment.
Additional Amounts for Qualifying Child: If you qualify for the basic amount, you may receive an additional $300 for each qualifying child. To qualify, a child must have been born after December 31, 1990 and have a valid Social Security number.

Phase Out: Your payment is reduced, or you may receive no payment at all based on your income level. The stimulus payment 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. Your AGI is the amount shown on:

  • Form 1040, Line 37.
  • Form 1040A, Line 21.
  • Form 1040EZ, Line 4.

Q. I received my stimulus payment and it didn’t include money for my kids. Does the IRS plan to send me an additional check?

A: Yes. In July the Internal Revenue Service began mailing approximately 230,000 additional economic stimulus payments after discovering that some tax returns were improperly filed and did not capture the information needed to generate the $300 in qualifying child payments.  To fix the problem, the IRS identified the affected taxpayers and sent them separate checks to cover their qualifying children. The additional payments involving qualifying children are being made by paper check, even if people received their regular tax refund and initial stimulus payment by direct deposit.

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