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News has been circulating about economic stimulus payments, or more commonly referred to as rebates, coming to some 130 million Americans. You may be wondering about the details of these rebates and whether or not you are entitled to one.  

What is a stimulus payment?
In February, President Bush signed into law the Economic Stimulus Act of 2008, a bill to help encourage economic growth. The Act calls for economic stimulus payments, or rebates, for 130 million Americans. 

Most taxpayers will get the full amount available for the stimulus payments – without having to take any special action – after they file their federal tax return. The payments, up to $600 for singles and up to $1,200 for couples filing jointly, began the first part of May and will continue until December 31, 2008, to accommodate for those who file later in the year. 

All stimulus payments will be nontaxable and they will not affect benefit payments. 

Even some non-filers – those who make a small amount of income but do not usually have to file – can get the payments. But they must file a federal tax return for 2007 to do so. See the next section for more information if you are a non-filer.

To determine your estimated stimulus payment for 2008, click here to use the IRS’s Economic Stimulus Payment Calculator.  

Some non-filers should file
If you had income in 2007, but not enough to require federal tax, the law provides for a minimum payment of $300 for singles and $600 for couples filing jointly. If you – alone or with the person with whom you are “married filing jointly” – had at least $3,000 in total “qualifying income,” you probably qualify. 

“Qualifying income” includes the following:

• Wages reported on Form W-2
• Net self-employment income
• Social Security benefits reported in box 5 of the 2007 Form 1099-SSA, which you would have received in January 2008 (you may also add up last year’s payments to report)
• Tier 1 Railroad Retirement benefits reported in box 5 of the 2007 Form 1099-RRB, which you would have received in January 2008
• Veterans’ benefits received in 2007, including veterans’ disability compensation and pension or survivors’ benefits from the Veterans Affairs Department (you may also add these up and report the total)
• Nontaxable combat pay, if you elect to include it as earned income on your federal tax return

Supplemental Security income cannot be counted as “qualifying income” for stimulus payment purposes. 

Besides the stimulus payment, you also qualify for a $300 payment for each child in your household under age 17 last year. 

How to file
Even though it is past the filing deadline, you must file a 2007 federal tax return to receive your stimulus payment. You can see a sample of a filled out Form 1040A (the short form) on the IRS’s website by clicking here. 

Key things to remember for filing Form 1040 or 1040A include:

• Report all earned income and self-employment income on line 7 of Form 1040 or 1040A.
• Total your 2007 Social Security, tier 1 Railroad Retirement benefits, and veterans benefits and report under “Social Security” on line 20a of Form 1040 or line 14a of the Form 1040A.
• Report nontaxable combat pay on line 66b of Form 1040 or line 40b of Form 1040A.
• Claim any child tax credit on line 52 of Form 1040 and line 32 of Form 1040A.
• Write the words “Stimulus Payment” across the top of your tax return.

If you electronically file your taxes, your stimulus payment will be automatically calculated and you will not need to indicate it on the top of your tax return.

If you already filed but did not include all “qualifying income,” you can file an amended return on Form 1040X. 

If you filed and then moved, be sure to file a change-of-address card with the U.S. Postal Service. 

Who is not eligible?
The IRS says the stimulus payments will not go to anyone who:

• Does not file a 2007 federal tax return,
• Owes zero tax and had less than $3,000 in qualifying income in 2007,
• Can be claimed as a dependent on someone else’s return,
• Does not have a valid Social Security number (each person filing, including those “married filing jointly,” must have their own valid SSN),
• Is a nonresident alien, or
• Filed Form 1040NR, 1040NR-EZ, 1040PR, or 1040SS for 2007.

If you don’t qualify this year, you may be able to qualify next year. The 2008 tax instructions will include a worksheet to help you if you did not qualify for a payment or if you received a reduced amount. This worksheet will help determine if you can obtain a benefit when you file your tax returns next year.

Get tax-filing assistance
It is still recommended to get filing assistance even though it is past the filing deadline. You can still take advantage of our partnered tax services: TurboTax^® Online^SM and Jackson Hewitt^®*. Plus, we’re offering great member discounts on both services to save you money. Click here for more information about filing your taxes today! 

There are also programs in place to help you if you earn a low- or moderately-low income or if you are elderly:

• Volunteer Income Tax Assistance (VITA) is for low- and moderate-income taxpayers. Click here for more information on VITA.
• Tax Counseling for the Elderly (TCE) provides free tax help to those 60 and older. As part of this IRS-sponsored program, AARP offers the Tax-Aide counseling program at more than 7,000 sites nationwide during the filing season. Click here for more information on TCE.

Don’t get scammed
Watch out for phone and email scams. The IRS says it will not call or email taxpayers about the stimulus payments or to ask for any financial information. Scam emails and information about scam calls should be forwarded to phishing@irs.gov.

For more information
Detailed information on the stimulus payment is also available on the IRS’s website by clicking here. 

For further clarity on your specific stimulus payment, consult your tax specialist or accountant.

Sources:
www.nafcu.org, "2008 Stimulus Payments," March 2008,  http://www.nafcu.org/Content/ContentGroups/
2008_Stimulus_Payments/08SPbrochure_color.pdf
www.irs.gov, "Economic Stimulus Payments Information Center," March 29, 2008,  http://www.irs.gov/newsroom/article/0,,id=177937,00.html
www.turbotax.intuit.com, "Rebates and Refund Transfers Using Santa Barbara Bank & Trust" May 6, 2008, http://turbotax.intuit.com/support/kb/
tax-content/tax-tips/6255.html

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