Rebate

[BOB W]

I just got my UT 2008 tax program.... All it asks is:

1: Was the rebate the same as projected from last years return?

2: If not, how much was rec'd> enter 0 if none.

That is it ............

That new line is left blank if it was the same as projected. That line only shows an amount that the worksheet develops.

[tpert]

I just got my UT 2008 tax program.... All it asks is:

1: Was the rebate the same as projected from last years return?

2: If not, how much was rec'd> enter 0 if none.

That is it ............

That new line is left blank if it was the same as projected. That line only shows an amount that the worksheet develops.

That is how the program should work if the situation in 2008 is the same as 2007 or if the taxpayer would be eligible for less based on the 2008 income and dependents. If the person would be eligible for more using the 2008 income and dependents, the person would get a stimulus credit equal to the difference.

[BOB W]

It just seemed like so many posters were confused in this thread that the simplicity of it all had to be posted.

[Black Bart]

I agree.

It just seemed like so many posters were confused in this thread that the simplicity of it all had to be posted.

As a confused, simplistic mortal in a minefield, I'd like to ask -- at the risk of being slapped around -- a question: For those who didn't file in '07 and whose only '08 income is Social Security benefits and interest income (less than minimum filing requirement), are they out of the picture? Stated another way, do they have to have enough income to be required to file a "real" return in order to qualify for that refundable credit?

[DonPriebe]

For those who didn't file in '07 and whose only '08 income is Social Security benefits and interest income (less than minimum filing requirement), are they out of the picture? Stated another way, do they have to have enough income to be required to file a "real" return in order to qualify for that refundable credit?

For 2007, if you put your SS and minimal interest on a 1040A, the bottom line of that 1040A wouldn't show that you were getting a rebate. Only the notation on the top of the form told the IRS to use special processing to issue you an advanced rebate check.

For 2008, those same numbers will still show zero tax until you get to line 70. The worksheet for that line calculates what your rebate should be based on the 2008 data and then subtracts the advanced rebate check you got last year (if any). The net rebate you are stilled owed (if any) goes back on line 70 of the 1040 as a refundable credit. No special processing is needed; you get the rebate as a normal refund.

[S T]

Interesting Post

Is Dyne posting because of Seniors on SS that might not have filed a 2007 tax return?? then I fnd the post interesting.

Not that I will have any of these seniors on SS only to file to obtain a rebate, but there still might be some out there that we can help obatin their rebate. I talked to many toward 10/15/08, but most had already filed.

I have a handful of clients that did not qualify for the rebate on the 2007 filings, that possibly could obtain the credit on their 2008 tax filings, filed in 2009. But I have been in close contact and watching them closing to see!

Sandy

[Black Bart]

Don

For 2007, if you put your SS and minimal interest on a 1040A, the bottom line of that 1040A wouldn't show that you were getting a rebate. Only the notation on the top of the form told the IRS to use special processing to issue you an advanced rebate check.

Yeah, we did lots of those.

For 2008, those same numbers will still show zero tax until you get to line 70. The worksheet for that line calculates what your rebate should be based on the 2008 data and then subtracts the advanced rebate check you got last year (if any). The net rebate you are stilled owed (if any) goes back on line 70 of the 1040 as a refundable credit. No special processing is needed; you get the rebate as a normal refund.

I haven't seen the worksheet, but I understand how the calculations you're describing worked for '07 and I guess you're saying it's the same for '08 except for subtracting off the previous payment and not two checks. What I was really asking was if the same "income" ($3,000 wages/SSA,/VA) rules would apply again for '08. I thought maybe the previous artificial ceilings/qualifiying types of income rules might have been discarded and they'd have to make enough to file an ordinary '08 return to get the credit, but I suppose the worksheet would have told me that. Thanks.

[dyne]

To ST: Yes, I did post because of seniors who received social security benefits who did not file a 2007 tax return. At two recent tax seminars several tax preparers did not understand this issue, so I wanted to spread the news. Apparently I did not word my comments properly. I have understood the issue from the beginning but was confused by some of the comments on several tax message boards. Best wishes to all.

[opie]

Is Dyne posting because of Seniors on SS that might not have filed a 2007 tax return?? then I fnd the post interesting.

Not that I will have any of these seniors on SS only to file to obtain a rebate, but there still might be some out there that we can help obatin their rebate. I talked to many toward 10/15/08, but most had already filed.

I have a handful of clients that did not qualify for the rebate on the 2007 filings, that possibly could obtain the credit on their 2008 tax filings, filed in 2009. But I have been in close contact and watching them closing to see!

Sandy

I think that is part of his point and that part is a good point. It would have been more interesting to discuss that instead of whether a refundable credit should be considered a PAYMENT (cause that's what the IRS calls it on their website).

Per the IRS instructions:

Recovery rebate credit. This credit is figured like last year’s economic stimulus payment, except that the amounts are based on tax year 2008 instead of tax year 2007.

There still is a chance for nonfilers to qualify for the Stimulus Credit based on filing of a 2008 return. However, there is no January deadline. As I read it this would default to the normal three-year rule for filing to get this credit.

We should be encouraging our clients with nonfiling relatives who are not required to file but otherwise eligible for the credit to file a tax return for 2008 even if it is not filed for a couple of years.

Does anyone see anywhere that this credit would not be eligible for the normal limits on claiming a refund?

[opie]

I haven't seen the worksheet, but I understand how the calculations you're describing worked for '07 and I guess you're saying it's the same for '08 except for subtracting off the previous payment and not two checks. What I was really asking was if the same "income" ($3,000 wages/SSA,/VA) rules would apply again for '08. I thought maybe the previous artificial ceilings/qualifiying types of income rules might have been discarded and they'd have to make enough to file an ordinary '08 return to get the credit, but I suppose the worksheet would have told me that. Thanks.

Black Bart,

The worksheet does use the same rules for '08. It has a line for adding in the total Social Security received amounts (which I would expect all professional software to automatically include if you properly entered it in the income information) and a line for entering the amount of any nontaxable veterans’ disability or death benefits received (which may or may not be included depending on whether your software has a place to enter this for other purposes like computing sales tax table amounts).

[Bees Knees]

For those who have not yet seen the worksheet, click on this link:

http://www.irs.gov/pub/irs-pdf/i1040gi.pdf

and go to page 62. That is the final worksheet found in the 1040 instruction book.

[BOB W]

The worksheet, for 99.99999% of your clients, will be a non-issue. I'm sure some of you will have issues that need to be addressed on the worksheet and good luck in getting the facts straight for the worksheet. Some problems may be encounted for new clients but for returning clients your tax program will handle them quickly.

[opie]

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!

Dyne,

There is an interesting aspect to what you are saying about January. Not all of the sites you mention describe it that way, but you are correct that both the IRS and Pine Tree Legal seem talk about a special rule to receive a separate PAYMENT if filing early enough. I tend to think that the IRS would be talking about early January for someone who does not wait for 1099-Rs or W-2s such as a person surviving solely on Social Security or other nontaxable sources who knows what the total amount will be:

IRS:

If you missed the Oct. 15 deadline for filing an income tax return for a economic stimulus payment, don't worry. You can receive a payment in 2009 by filing an income tax return when the filing season opens in January.

Pine Tree Legal:

NOTICE: Did you miss the October 15, 2008 filing date? You can still claim your one-time stimulus payment by filing a 2008 tax return in early 2009. If you try to file this year, after October 15, the IRS is not assuring payment. All IRS payouts this year must be completed by Dec. 31. So the later you file, the higher the chance that you will not get your rebate this year and will have to try again next year.

None of your other sites you claim mentioning this corroborate this statement that a separate PAYMENT still exists.

Here is what I found doing searches on the sites you referenced:

• Did not find any reference to a January deadline or an extension of time to receive the Stimulus Payment past the October 15 deadline on Wealthy Reader. Only the credit is discussed for filers after that deadline.
• Your TurboTax site "dumbs down" the technical issues into "consumerese" and calls the Stimulus Credit a "Second Chance Rebate." In my opinion, this is not "wrong" but very misleading. Later they refer to the Stimulus Payment as a credit when they say, "The rebate, for most people, is actually an advanced credit on their 2008 taxes. That credit will NOT need to be repaid, be deducted from your 2008 tax refund or be taxed later." Not really good prose. I would say this is likely to cause confusion among non professionals.
• I've already commented about the TaxBrain site. You really can't rely on a site like that for tax information.
• Cassar.net agrees more with me than with you when it says: "By law, the IRS cannot disperse any economic stimulus payments after Dec. 31. However, people who may be eligible for an economic stimulus payment can claim a credit in 2009 by filing a 2008 income tax return." Only problem I have is I do not see where the credit is limited to 2009. I think the normal statute of limitations applies.
• The same regarding your reference to Congressman Steve Cohen's site which says word-for-word exactly the same when it says, "By law, the IRS cannot disperse any economic stimulus payments after Dec. 31. However, people who may be eligible for an economic stimulus payment can claim a credit in 2009 by filing a 2008 income tax return. "

[tpert]

Opie,

The identical comments you found from those two sites was taken directly from IR 2008-109, dated 9/23/08.

Regarding the comments on irs.gov,I am not sure why the IRS website emphasizes filing in January but I think that message is directed specifically at individuals who are not required to file a tax return.

I would, though, add a word of caution to filing in January. During last year's rebate frenzy, I had two elderly clients come to me to file "just to get the rebate they heard about" who were actually required to file a tax return and had a tax liability. I am not sure why the IRS had never contacted them before except that the liability they would have owed was relatively small. I did tell them that they should have filed earlier years as well and that they would likely be required to file for 2008 as well, but they seemed to be guided by some unwritten rule that seniors who just get pensions and social security don't have to file tax returns (they also had interest and dividends, but that falls under a different rule...."it's already their money so they don't have to pay tax on it twice"). They did not like the idea of paying a balance due and then getting $300 back later because they had been told things like "The $300 was free to seniors." I got several follow-up calls because their friends and relatives kept telling them I was wrong. In retrospect, it might have been easier for them to wait until 2008 when they could simply have the credit applied against their liability and do one transaction instead of two.

I am sure no one on this board needs to be told, but filing a tax return in January before the 1099's are issued and before you have a chance to see what was really earned can be dangerous. Be sure to ask all the correct questions.

[dyne]

I interpreted irs.gov comments to indicate that persons who are not normally required to
file and did not file a 2007 return may file a 2008 tax return during this coming filing season to
obtain the recovery credit and refund. IRS.gov says in part...."by filing an income tax return
when the filing season opens in January...." NOT just during January, but during the
entire filing season.