In hopes of staving off recession, on 13 February, President Bush signed an economic stimulus package. In an early version of the legislation, elders who receive Social Security benefits were excluded from the rebate, but the Senate pushed back and elders were included in the final bill.
Because our economic problems are long-term in the making and deeply entrenched, the idea that people running right over to the local Wal-Mart to spend their one-time mini-windfall will get the economy back on track didn't make sense to me. Now it appears the people aren't even going to spend that money:
“An Associated Press-Ipsos poll found that only 19 percent of those surveyed said they planned to spend their rebate checks. Forty-five percent said they would pay bills, while 32 percent said they planned to invest the money.”
- AP, 14 February 2008
But the legislation is a done deal, so here are the facts and what you need to do to receive your rebate. It’s pretty simple.
People who earn at least $3,000 adjusted gross income through wages, Social Security or veteran’s disability benefits are eligible for the rebate. Amounts range from $300 at the lowest level of income to $1200 for couples at the high end. Individuals who earn more than $75,000 and couples who earn more than $150,000 in adjusted gross income are not eligible.
You must have a valid Social Security Number. Those with an Individual Taxpayer Identification Number (ITIN) are not eligible. And you must file a 2007 tax return even if you did not earn enough to owe any tax. Rebates are determined by your 2007 tax return.
The rebates are not taxable on your 2008 income tax return. In researching this story, I ran across several reports stating that any refund due taxpayers on their 2008 returns will be reduced by the amount of their rebate. According to the IRS, this is not true:
“The stimulus payment will not reduce or increase your refund when you file your 2008 return.”
There is a lot of good information in Q&A format on details of the rebate package at the IRS website.
Payments will start being mailed out (or direct deposited if that is what you select on your 2007 tax return for any refund) in early May, so it would behoove you to file by the 15 April deadline.
[At The Elder Storytelling Place today, Nancy Leitz writes an engaging, childhood recollection in My Brother the Pope.]