Rebate

[opie]

HR 5140 states:"HR 5140 would provide REBATES to certain persons filing individual income
tax returns for taxable years 2007 OR 2008" www.irs.gov says that taxpayers who failed to
file a 2007 tax return to obtain a rebate may file a 2008 tax return to get the rebate.
www.myincometaxrebate.com provides details.

My understandiung of HR 5140 regarding these rebates is that it added section 6428 to the code. Paragraphs (a) through (e) define the credit in terms of 2008 income. Paragraph (f) describes how this will be coordinated with the Advance Refunds of Credit. Paragraph (g) says how to compute the Advance Refund based on the 2007 income instead. It clearly states that the Advance Refund based on the 2007 income is not allowed after December 31 2007, so if a taxpayer failed to qualify in 2007 he may use the 2008 income to attempt to qualify. Anyone who qualified based on 2007 income but won't using the 2008 income will not have to give it back. Anyon who failed to file a return by October 15 (the IRS defined date) will only get the second chance based on 2008 income. If they would have qualified in 2007 but don't for 2008 and did not file the 2007 on time, they are not able to use the 2007 income to qualify on their 2008 return.

It is quite clear in the law and it is quite clear in the IRS worksheet for the 2008 return that the only thing used for computing the eligible amount in 2008 is the 2008 income. The only amount used from 2007 is the Stimulus Payment received based on 2007 income which is used to reduce the amount of the 2008 credit.

This is quite clear in the code and on the IRS worksheet.

[opie]

I looked at the TaxBrain website you referenced. I would not rely on a commercial tax preparation site for answers to your question. One of the problems with such do-it-yourself sites is that they try to translate complex tax situations into common terms and they do not seem to be particularly accurate in their translation. In fact, on that page you reference, it looks like they globally changed 2008 to 2009 and then changed 2007 to 2008. They are encouraging you to file yor 2008 tax return with them now You probably need to seek the advice of a qualified tax professional. Even posting questions here may not fully answer your questions properly.

[Bees Knees]

It is quite clear in the law and it is quite clear in the IRS worksheet for the 2008 return that the only thing used for computing the eligible amount in 2008 is the 2008 income. The only amount used from 2007 is the Stimulus Payment received based on 2007 income which is used to reduce the amount of the 2008 credit.

This is quite clear in the code and on the IRS worksheet.

It is also quite clear on TheTaxAuthority Update posted on 2/11/2008 http://www.thetaxbook.com/updates/th...008_update.pdf and the example given:

The advance refund is based upon the amount that would have been allowed as a credit under Section 6428 if that credit had applied for 2007. Any advance refund paid to the taxpayer will reduce the Section 6428 credit that is allowed for 2008, but not below zero.

Example: Bruce and Vicky file a joint 2007 return. Due to their level of income, they would have qualified for a Section 6428 credit of $700 had the credit applied for 2007. The IRS mails to them an advance refund check of $700 during the summer of 2008 after filing their 2007 return. For 2008, their income is less and they qualify for a $1,200 Section 6428 credit. Their Section 6428 refundable tax credit for 2008 equals $500 ($1,200 minus $700).

[les grans]

"www.myincometaxrebate.com provides details."

Yeah, but sadly it looks like the folks who posted that information just took the explanation of the 2007-paid-in-2008 rebate and changed the dates from 2007 to 2008, and 2008 to 2009. This makes much of the updated article correct, but much of it incorrect, also. Sad. They invested a lot of time and effort in their article last year but then tripped when they "updated" it to 2008/2009.

The rebate rules are pretty much the same for 2008 as they were for 2007 because - pay attention now - it's the same rebate. If you didn't get it then, you still might get it now.

[opie]

It is also quite clear on TheTaxAuthority Update posted on 2/11/2008 http://www.thetaxbook.com/updates/th...008_update.pdf and the example given:

Thank you Bees Knees.

I remember seeing that, too and I believe that most of the current questions were already answered by the date that was posted.

I was responding to Dyne's apparent confusion about how the rebate works. Dyne seems to think that you can just file a 2008 tax return and get the credit you were eligible for in 2007, if for some reason you forgot to file a 2007 return, but it doesn't work that way. I thought this was quite clear throughout most of the 2008 tax season and was explaining to my clients and their older relatives the importance of filing a tax return by October 15 so that they get two chances to qualify. Otherwise, youu are just hoping that you will qualify based on the 2008 return only. I have at least two clients who would not get anything based on 2008 but were eligible based on 2007.

Thanks again.

[Bees Knees]

I remember seeing that, too and I believe that most of the current questions were already answered by the date that was posted.

???

This thread with the question wasn't started until 11/13/2008. That post that I linked has been on this website since 2/11/2008, which is nine months ago. It has been very clear, for nine months now, that the stimulus payment was based on the 2007 return, and the refundable credit is based on the 2008 return, minus whatever you got for a stimulus check last summer.

I'm not sure why there is any confusion, unless you didn't see the original update with examples that was posted on this website nine months ago.

[dyne]

Thank you for all of the comments.
However irs.gov says:"If you missed the Oct. 15 deadline for filing an income tax return
for an economic stimulus payment, don't worry. You can receive a payment in 2009 by
filing an income return when the filing season opens in January. The IRS will have more
information shortly." Notice that this is the IRS website. I assume IRS knows what it is talking about.
The first computation is for people who simply failed to file a 2007 tax return solely to get the rebate.
They can file a 2008 tax return and if they qualify by having sufficient income, etc. IRS will
calculate their rebate which will be refunded during the calender year 2009. The second
computation of the rebate is for people who did file a 2007 return but then filed an amended return which increased their income or meets one of the other requirements and they MUST use the worksheet provided by IRS to determine how much, if any, additional credit or rebate will be allowed and claimed on the 1040 return.
It is all ONE rebate received either during 2008 or 2009.

[David1980]

I'm expecting another $300 rebate on my 2008 tax return, because I didn't have much income in 2007 (got my $300 minimum.)

So when preparing my taxes for 2008 I'll have to enter the amount of rebate already received ($300) calculate the total rebate based on 2008 income ($600) and then get the difference $300). It's all one rebate, I'm still only getting the $600 max for no kids, I'm just kidding half of it on two different year returns.

[opie]

???

This thread with the question wasn't started until 11/13/2008. That post that I linked has been on this website since 2/11/2008, which is nine months ago. It has been very clear, for nine months now, that the stimulus payment was based on the 2007 return, and the refundable credit is based on the 2008 return, minus whatever you got for a stimulus check last summer.

I'm not sure why there is any confusion, unless you didn't see the original update with examples that was posted on this website nine months ago.

Thanks, Bees Knees,

I am not the one who was confused. I saw the update from TMI, but also got updates from CCH, the NATP, and the NAEA. Like I said, most of the questions here were answered long ago. I agree, the fact that there is any confusion at all at this point is disappointing. It is the poster who relies on TaxBrain for his information that I was trying to help.

[tpert]

However irs.gov says:"If you missed the Oct. 15 deadline for filing an income tax return for an economic stimulus payment, don't worry. You can receive a payment in 2009 by filing an income return when the filing season opens in January. The IRS will have more information shortly." Notice that this is the IRS website. I assume IRS knows what it is talking about.

Not sure that there is anything confusing about this.

"If you missed the...deadline, don't worry." Why. Because it is stupid to worry about things you can't do anything about. You missed your chance to qualify based on your 2007 return by not filing it on time, you have chosen to not qualify for the Advance Stimulus Payment.

"You can receive a payment in 2009 by filing an income return when the filing season opens in January." This is also true. Note that they used "can" not "will" and this could just as well be "might" in the way they used it in this sentence. You can file your 2008 return, but that return will not provide you with the Advance Stimulus Payment based on you 2007 income, it will be for the Stimulus Credit based on the 2008 situation.

"The IRS will have more information shortly." They do. They have had the draft 2008 Forms and worksheets for several months. Information about the possibility of qualifying based on the 2008 income is actually already on the page you are quoting from.

I really don't understand the complexity here or the confusion. There were lots of discussions about this on this board and others back in February.

[Bees Knees]

Thank you for all of the comments.
However irs.gov says:"If you missed the Oct. 15 deadline for filing an income tax return
for an economic stimulus payment, don't worry. You can receive a payment in 2009 by
filing an income return when the filing season opens in January. The IRS will have more
information shortly." Notice that this is the IRS website. I assume IRS knows what it is talking about.
The first computation is for people who simply failed to file a 2007 tax return solely to get the rebate.
They can file a 2008 tax return and if they qualify by having sufficient income, etc. IRS will
calculate their rebate which will be refunded during the calender year 2009. The second
computation of the rebate is for people who did file a 2007 return but then filed an amended return which increased their income or meets one of the other requirements and they MUST use the worksheet provided by IRS to determine how much, if any, additional credit or rebate will be allowed and claimed on the 1040 return.
It is all ONE rebate received either during 2008 or 2009.

I think you are confusing the issue. Its not all one big rebate. Its two separate issues.


There will be no stimulus check for those who missed filing their 2007 return, because that is the law. Public Law 110-185 says:

No refund or credit shall be made or allowed under this subsection after December 31, 2008.

That is in direct reference to the stimulus payment based on filing the 2007 return. Don't worry about what the IRS website says because they CANNOT under law give anyone a stimulus check after December 31 of this year.

What they CAN do for those idiots who missed filing a 2007 return is give people a refundable credit under Section 6428 based on filing their 2008 return. This 2008 refundable credit is reduced by whatever stimulus check that was received in 2008 (which was based upon filing a 2007 return). If they received no stimulus check because they didn’t file a 2007 return on time, no problem. They still get a refundable credit based on their 2008 return.

THAT is what the IRS website is talking about.

[dyne]

I agree with most of the posts on this message board but my contention is simply that
those persons who did not file a 2007 tax return ONLY to obtain a rebate may file a
2008 tax return to get the rebate they missed. Most of these people have only social security
benefits and perhaps a small amount of other income and are normally not required to
file a tax return. I believe this rebate or recovery credit or whatever it is called will be
refundable. I am ONLY concerned with whether or not these people who did not file a 2007
tax return should soon file a 2008 tax return. IRS.gov/com clearly says:"you can receive
a PAYMENT in 2009 by filing an income tax return when the filing season opens in
January". The following other websites say the same thing:
wealthyreader.com/
turbotax.intuit.com/support
myinvcometaxrebate.com/
cassar.net/news/stimulus.htm
cohen.house.gov/
ptla.org/
Surely IRS and All these websites are not wrong!
I am aware of the law which seems to indicate that IRS may not mail out any
more stimulus payment refunds after December 31, 2008.
If anyone finds the difinative answer, please let me know.

[opie]

Only thing I saw wrong with your earlier theories is that you seemed to be saying that anyone who qualified in 2007 automatically get the rebate by filing in 2008. Now that you seemingly have changed that to anyone with exactly the same circumstance (i.e., no one moved out, no huge gain on the sale of assets, no lump sum from a retirement plan, no cash out of an IRA, no death of taxpayer or spouse in 2007, etc) is eligible for the same amount as a Stimulus Credit as they would have gotten as a Stimulus Payment, I see nothing wrong with your post. I thought you had a question. I did not know you were just stating what everyone else has known since February. The Rebate Credit was always described as a refundable credit for 2008. Since you are just stating the obvious, I am sorry I wasted my time trying to help you.

As far as how quickly they should file, it is likely up to them. They have already waited this long, why don't you tell them to wait a couple more years. The government was offering them a 2008 credit early. Why would they be in a rush now....they have already indicated they aren't interested.

Regarding the sites you mentioned which call the 2008 Credit a PAYMENT (your caps not mine). That is what you get for relying on consumer sites. I quoted from the IRS Code when I called the Stimulus Payment an Advance Payment and the Stimulus Credit a Credit. You are quoting from TaxBrain and TurboTax. Which do you think is a more authoritative source?

[dyne]

Several people suggested on this or two other tax message boards that:
1. Persons who failed to file 2007 tax returns to get the rebate would NOT get a refund or rebate by filing a 2008 tax return, assuming they qualified, etc. 2. Some who posted indicated that the amount of the recovery credit or whatever it is called was NOT refundable.
I have thought all along that both of these contentions were incorrect. The reference to the
PAYMENT (or refund) referred to the IRS.GOV/com website.

[tpert]

Several people suggested on this or two other tax message boards that:
1. Persons who failed to file 2007 tax returns to get the rebate would NOT get a refund or rebate by filing a 2008 tax return, assuming they qualified, etc. 2. Some who posted indicated that the amount of the recovery credit or whatever it is called was NOT refundable.
I have thought all along that both of these contentions were incorrect. The reference to the
PAYMENT (or refund) referred to the IRS.GOV/com website.

With all due respect, Dyne, there was no such ridiculous discussion in this thread.

The only things stated in this thread was if you don't get the Stimulus Payment based on your 2007 return or if you don't file your 2007 return by October 15, you have to qualify for the Stimulus Credit based on your 2008 income to get anything.

Look at the code, you cannot get the Advanced Payment after December 31. You may think it is a question of semantics, but you will not get a separate payment unless you filed before the October 15 deadline. After that, you can only get the credit. I saw no posts saying it was not refundable. It works like any refundable credit, it might reduce your balance due or increase your refund but it is not a separate payment.

I saw you post your comments on another site and no one there was saying you don't get the credit or that it was not refundable, just that if you died in 2007, you can't get either the payment or the credit if the final return was not filed by October 15. Where was the site that was saying the nonsense you describe. I want to go there and help you beat them up.