"Stimulus Package" 'rebate' must be paid back

[Kathryn41 3,205]

A friend just sent me this interesting tidbit of information:

"I've been reading various articles about the proposed Stimulus Package that was passed yesterday and is heading to the President for sighing, but no where dd I catch that this is an advanced on the possible refunds from filing 2008 taxes by April of 2009. It's been treated as though it is a "gift."

CNN:

The package, which passed the Senate 81-16, will send rebate checks to 130 million Americans in amounts of $300 to $600 for people who have an income between $3,000 and $75,000, plus $300 per child. Couples earning up to $150,000 would get $1,200. The checks are an advance on next year's refunds, and most, if not all of the money, will be deducted from taxpayers' refunds in 12 months' time. [note: this sentence was removed from the CNN article within 2 hours and is no longer part of it.]

"My team will be sitting down with the IRS tomorrow, and the IRS, right in the middle of tax filing season ... will be working to get checks out," said Paulson, who helped broker the deal.

Nuts and Bolts

The rebates are tied to a reduction of the 10% bracket from 10% to zero for the first $6,000 of taxable income in 2008, Luscombe said.

"I guess they need some legal basis to give a rebate check so that's what they came up with," he said. "That would be tied to the 2008 return. That's similar to (the 2001 tax rebate), so basically you would reflect the rebate check as sort of a prepayment on your 2008 return."

The rebate is not taxable at the federal level, and it's unlikely the states would tax it, though that's not entirely clear at this point.

The text of the bill also verifies this.

http://readablelaws.org/index.php?title=Bi...ple_Act_of_2008

Edited February 8, 2008 by Kathryn41

[Hilarious Clinton 452]

It's not a gift however you look at it. It's our money in the first place.

Everyone take $20 from your left pocket and put it in your right. LuckyStrike just gave everyone on VJ a 'rebate'. What a swell guy.

[Peikko 1,575]

You would have to be particularly nuts to imagine that any government is just going to give away money especially if the goverment doesn't have a suprlus of funds. Clearly they have to re-coup this loss somehow.

[SMOKE 1,426]

It's not a gift however you look at it. It's our money in the first place.

Everyone take $20 from your left pocket and put it in your right. LuckyStrike just gave everyone on VJ a 'rebate'. What a swell guy.

thanks lucky!

[Trumplestiltskin 5,791]

You would have to be particularly nuts to imagine that any government is just going to give away money especially if the goverment doesn't have a suprlus of funds. Clearly they have to re-coup this loss somehow.

If I remember rightly your regular income tax refund is supposed to counts as 'income' for the following year.

[Marilyn. 340]

so we don't have a choice...?? if we get this rebate, they are going to take it out of our next years refund?? I almost would rather not get the rebate then

and what if your refund next year is going to be less then the rebate??

[Chica Yeyé 41]

so we don't have a choice...?? if we get this rebate, they are going to take it out of our next years refund?? I almost would rather not get the rebate then

and what if your refund next year is going to be less then the rebate??

I hear you Marilyn --- we're better of returning the darn thing VOIDED. what a scam.

[w¡n9Nµ7 §£@¥€r 123]

If they treat this rebate the same way they did the last one, it'll be treated as taxable income for tax year 2008. That would mean you end up giving back a portion of it, not all of it.

[w¡n9Nµ7 §£@¥€r 123]

Here's the explanation. I can see why people are confused. Bottom line, no - this doesn't come out of your refund. It's a one-time tax cut.

Do I have to pay the rebate back?

No. And here's why.

Your rebate is a one-time tax cut - an advance on a credit you'll receive on your 2008 return.

It's based on your 2007 income initially. If it turns out that your 2008 income and number of children would have qualified you for a larger rebate than the one you received, you'll be sent the difference. If it turns out your 2008 income was lower than in 2007 and you should have gotten a lower rebate, you get to keep the difference.

"If you were supposed to receive a larger payment than you did, you will get the extra money," said Treasury spokesman Andrew DeSouza. "If you received more than what you should have gotten, you will not be penalized."

http://money.cnn.com/2008/02/08/pf/taxes/r...sion=2008020815

[Marilyn. 340]

oh ok.. I guess that makes sense..

[♥JP♥ 5]

Thanks for clearing that up Gupt!

[Tsup2 0]

Do I have to pay the rebate back?

No. And here's why.

Your rebate is a one-time tax cut - an advance on a credit you'll receive on your 2008 return.

It's based on your 2007 income initially. If it turns out that your 2008 income and number of children would have qualified you for a larger rebate than the one you received, you'll be sent the difference. If it turns out your 2008 income was lower than in 2007 and you should have gotten a lower rebate, you get to keep the difference.

"If you were supposed to receive a larger payment than you did, you will get the extra money," said Treasury spokesman Andrew DeSouza. "If you received more than what you should have gotten, you will not be penalized."

http://money.cnn.com/2008/02/08/pf/taxes/r...dex.htm?cnn=yes

[mawilson 2,133]

and what if your refund next year is going to be less then the rebate??

Then you'll owe them money. Obviously.

[Marilyn. 340]

Do I have to pay the rebate back?

No. And here's why.

Your rebate is a one-time tax cut - an advance on a credit you'll receive on your 2008 return.

It's based on your 2007 income initially. If it turns out that your 2008 income and number of children would have qualified you for a larger rebate than the one you received, you'll be sent the difference. If it turns out your 2008 income was lower than in 2007 and you should have gotten a lower rebate, you get to keep the difference.

"If you were supposed to receive a larger payment than you did, you will get the extra money," said Treasury spokesman Andrew DeSouza. "If you received more than what you should have gotten, you will not be penalized."

http://money.cnn.com/2008/02/08/pf/taxes/r...dex.htm?cnn=yes

and what if your refund next year is going to be less then the rebate??

Then you'll owe them money. Obviously.

actually no..

[mawilson 2,133]

and what if your refund next year is going to be less then the rebate??

Then you'll owe them money. Obviously.

actually no..

Well yeah, I posted it first, then read Gupt's commentary.