How will rebate be handled on 2008 Return?

[Brad Imsdahl]

We will be posting another update soon that will cover the new law, and provide you with examples to help you answer your client questions.

[BOB W]

Anybody have a hard copy of the new bill?????

[JohnH]

Bob:
Just follow the link posted by mwarney (2nd one back).
That will take you to Thomas (and the text of the bill).

[BOB W]

Bob:
Just follow the link posted by mwarney (2nd one back).
That will take you to Thomas (and the text of the bill).

I did that but I couldn't find it....???

OK I found it, but too much to read today. I hope Brad make quick work of a recap...................I don't care about the business issues yet but need to recap the "Rebate"/Advanced refund"... The word Advanced Refund is still in the Bill...????

[JohnH]

Found a good explanation

I posted this over on the ATX FOrum, and I'm copying & pasting here. If I'm wrong on any of these points I know I will eventually be corrected:

Maybe the following info will answer some (but not all) of the questions about who gets what, and when:
.

http://www.house.gov/jct/x-16-08.pdf

(Focus on pages 3-6)
It clearly puts to bed a few of the speculations about the nature of the payment, including:

1) It is clearly a rebate, based on income showing on the 2007 return.
2) It will not be added to income next year.
3) It will not be deducted from 2008 withholdings or added back to 2008 tax.
However, we will need to ask clients if they received it and account for it on the 2008 return only because any entitled taxpayer who did not get a check will be able to claim an additional credit on their 2008 return - that seems fair.
4) They did anticipate that not everybody will file on Apr 15, and they did take that into account by stating that extension filers will get their checks after they file.
5) I'm not sure about the $300 credit per child, but it appears that it is also a true rebate and will not affect the 2008 child tax credit in any manner.

[JoshinNC]

I'm still reading this to say that

there will be a credit on the 2008 return (filed in 2009) with the credit to be offset by the amount "advanced" to the TP in 2008. This way a TP who was eligible by the definition but for some reason did not recieve the advance would be able to take the credit on the 2008 return.

I sure hope somebody can give us some guidance soon. Had three appts. this morning and all three asked me how much they would get, when would they get it and whether it would be an offset, taxable income or "free" money. I basically talked them in circles for 5 minutes and then moved on to other topics quickly.

[Brad Imsdahl]

I can post it tonight, or sometime Sunday, depending upon when I get it back from Paul. I can’t release it or provide any details until he puts his 2 cents worth in.

[BOB W]

I knew we could count on you and your team.

[BOB W]

How are you doing with that recap Brad????????

[Valarie]

The one thing that I wasn't aware of is that the rebate for children is only valid if the child "lived with you and is eligible for the child tax credit"

So that eliminates the possibility to receive the rebate if your child is 17-23... But what happens in the case where the child "lives" with Mom and Dad has the right to claim the child??

Hmmm...

Valarie

[BOB W]

The one thing that I wasn't aware of is that the rebate for children is only valid if the child "lived with you and is eligible for the child tax credit"

So that eliminates the possibility to receive the rebate if your child is 17-23... But what happens in the case where the child "lives" with Mom and Dad has the right to claim the child??

Hmmm...

Valarie

Mom would still claim HOH and 1040 line 4 would be completed....

Dad would claim Single w/dependent ( if unmarried)....

This should give Mom the credit and Dad none............... I'm guessing...

[Valarie]

Bob-

What if Mom has remarried, and does not qualify for HOH or EIC.. there would be NO reason for child to appear on their return... not a dependent, not eligible for EIC or HOH status..

Is the rebate lost??

Valarie

[Jesse]

Mom would still claim HOH and 1040 line 4 would be completed....

Dad would claim Single w/dependent ( if unmarried)....

This should give Mom the credit and Dad none............... I'm guessing...

I thought you saved me, as I told one of my clients, before this rebate BS started that she would not loose anything if she gave up the dependency deduction on Form 8332. But then it occurred to me that because she has two children she did not need to put a name on 1040 line 4.

I'm just dreading the day she receives he check and she's upset because she is out $300. How was I to know?!

[Valarie]

No way to know..

Until the Bill is signed into law, there is no definitive answers - that is what I've told my clients so far..

There are so any unanswered questions regarding the rebates...

Valarie

[BOB W]

I thought you saved me, as I told one of my clients, before this rebate BS started that she would not loose anything if she gave up the dependency deduction on Form 8332. But then it occurred to me that because she has two children she did not need to put a name on 1040 line 4.

I'm just dreading the day she receives he check and she's upset because she is out $300. How was I to know?!

How rediculas(?) would it be to put your "give away" child on 1040 line 4 even if you already have another qualifying child for HOH? Would this "give away" child still count toward your rebate??

I know, I'm shooting in the dark...................