The TGB Interview: Mrs. Hughes
Rejected By a Green Group

Elders and the Stimulus Package

category_bug_politics.gif 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.]

Comments

Thank you for this post,Ronni. I have heard so much conflicting information regarding this payment,I really didn't know whether or not we were going to get the money.

You have cleared up a lot of my questions.

Another Crackpot idea out of Foggy Bottom has been exposed. It won't work. Aside from the fact that GWB is so late to the table of fiscal responsibility, his enablers are hoping that this massive expenditure will make the economy look good until they are out of office and then they can blame the big time recession that is surely on it's way on the next President.

Thank you for the information, Ronni. I didn't think my S. S. income would count since it isn't taxable. I guess I'll get my pittance after all and I will spend it.

Hi Ronni - as always, your information is spot on. It's just such a shame that people who haven't filed taxes in years will need to bother to do this piece of paperwork again - jump through this hoop. Our AARP tax-aide volunteers will be inundated with nuisance filing, IMHO.
be well and warm.

“The stimulus payment will not reduce or increase your refund when you file your 2008 return.”

Like you, I had found this quote a few weeks ago--and I still wonder what it means. "They said" the same thing the last time an economic stimulus was presented. As it turned out, that time at least, it was true, as stated. However, the amount of refund is not the same as the amount of the check that is sent to the filer. The check, in that case, was reduced by the amount that had previously been sent out. I don't know about this time, of course.

My stepkids were telling me last week that the rebate was only a "loan" and that you would see it repaid in your 08 tax refund/tax owed.

Kman and I argued with them that this was a recipe for disaster for the average Joe/Jane Taxpayer.

Thanks for doing my homework! Now I can play my trump card on the ever-so-smart offspring!

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