Rebate Credit

[barzillai]

I am seeing clients who filed MFJ in 2007 and are separated or divorced for 2008 receiving the Rebate Recovery Credit for 2008. This is because the 2007 stimulus payment has to be split equally between the ex-spouses; and if one spouse claims all of the kids, it inflates their rebate amount. Everything I have looked up indicates this is correct, but it doesn't seem right.

Any opinions would be appreciated.

Thanks

[Bees Knees]

You are correct. The stimulus payment is split equally between spouses. That allows for the possibility of some creative planning to get extra rebate credit money by shifting kids between each spouse when the spouses file separate in 2008.

May not seem right, but those are the rules.