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The check may not be in the mail for people who don’t file a tax return or who owe back taxes
More than 130 million American households will begin receiving tax rebate checks between May and July. If people want to receive the economic stimulus payments from the government the first thing they must do is file a federal tax return, according to a University of Missouri Extension tax expert.
"There were some misnomers that the Social Security Administration would share its information with the IRS and people could receive checks without actually filing, but that's not the case," said Andrew Zumwalt, director of the Missouri Taxpayer Education Initiative. "You have to file in order to receive a fiscal stimulus rebate."
This also applies to many seniors and people in low income tax brackets who normally don't file federal tax returns.
People who owe federal debt may not receive their tax rebate check.
"If you owe back taxes, defaulted on government student loans or if you haven't been making child support payments then the government will treat your basic tax rebate like a regular refund from the government, and they'll intercept it and keep the money," Zumwalt said.
According to Zumwalt, if this happens people will get a letter in the mail informing them of the situation.
The maximum rebate is $600 for an individual and $1,200 for a married couple filing jointly. Families with dependent children under the age of 17 will receive an additional $300 per child. If a child is born this year the family may still receive a rebate.
"You do have a second chance," Zumwalt said. "If you don't qualify based on this year's taxes, you can file next year and receive the rebate check again."
To qualify, a person must have at least $3,000 in income which includes most Social Security benefits, certain railroad retirement and veterans' benefits, and earned income.
If a taxpayer uses direct deposit on his or her 2007 tax return, the IRS will electronically deposit the money. Taxpayers who don't use direct deposit will receive their checks by mail.
There is some confusion regarding if the rebate money is going to be taxed at all.
"The fiscal stimulus payment is not taxable at the federal level, but some states may decide to tax the rebate," Zumwalt said.
For more information about tax related issues visit
the University of Missouri Extension Web site,
www.extension.missouri.edu.
Resource: Andrew Zumwalt, 573-884-1690
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Last update: Friday, March 07, 2008
