The Internal Revenue Service moved quickly after the economic stimulus package was passed this month to get the word out about who will get the tax rebates of $300 to $1,200.
Since then, confusion has grown.
One misconception is that the rebate will be taxed as income on next year's return, says IRS acting Commissioner Linda Stiff. Another is that the rebate will reduce next year's refund.
With misinformation swirling, the IRS recently took another stab at clarifying the rebate rules.
Here is the update:
Who is eligible?
More than 130 million households will get a rebate. To qualify, you must have at least $3,000 in income to receive the minimum rebate of $300 for an individual or $600 for a couple filing jointly.
Income for this purpose includes wages, railroad retirement benefits and certain disability and survivor benefits from the Department of Veterans Affairs. It also includes Social Security retirement, survivor and disability benefits but not Supplemental Security Income or investment income.
The maximum rebate is $600 for an individual and $1,200 for a married couple filing jointly.
Parents eligible for a rebate will receive $300 for each qualifying child. The child must be under age 17 as of the end of last year and live with you for more than half the year.
Rebates begin to be reduced once adjusted gross income tops $75,000 for an individual and $150,000 for a couple. Your total rebate is reduced by 5 cents for every $1 you make over those thresholds.
You must file a 2007 tax return. The IRS will use this to determine eligibility and calculate the size of the rebate.
If you have filed your return, don't worry. You don't have to file again to get the rebate, as some fear, Stiff says.
About 20 million people aren't required to file a return because they earn too little. They still must file to get the rebate.
Stiff says the IRS will send a notice to veterans and Social Security beneficiaries who usually don't file about how to submit a tax return.
The IRS is encouraging them to file a 1040A form and write on the top "Stimulus Payment."
If you need help filing a return, the IRS, AARP and community groups will be offering free assistance.
Low- to moderate-income households can get free help at one of the Volunteer Income Tax Assistance programs. To find the nearest location to you, call 800-906-9887. To find an AARP Tax-Aide site, call 888-227-7669.
Despite the outreach, many people might never learn about the rebate and not file a return, says William E. Massey, a senior tax analyst with Thomson Tax & Accounting.
Massey says he has called his aunts - ages 78 and 93 - to let them know that he will file returns for them.
If you do discover too late that you should have filed a 2007 return to get the rebate, you can always do so next year and get the money, Stiff says.
When does the money arrive?
A rebate won't be lumped together with your regular tax refund. You'll get a separate payment.
Rebates likely will be disbursed based upon Social Security numbers or geographic area, Stiff says.
The IRS will send you a letter if you're eligible for a rebate. It will follow up with a notice of the amount within a week before you get the money.
The earliest rebates will be received in the first week of May by those who used direct deposit when filing their 2007 returns. Even if you're not due a refund for 2007, you can make sure the rebate is directly deposited into your account by filling out the bank routing information on your return.
Those who don't use direct deposit will start receiving paper checks the second week of May.
The IRS plans to set up a system where you can check online to find out when you'll get your rebate, similar to how you can now track your refund online.
If you moved since filing your 2007 tax return, make sure you send the IRS a change of address form so you get your rebate, Massey says.
Who won't get a rebate?
You won't get money if you can be claimed as a dependent on someone else's tax return. Sorry, students.
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