Economic Stimulus Act of 2008

[Zee]

Even if the taxpayer does not have to file a normal tax return do they need to file this year just so the IRS know they exist so they would qualify for the FREE money? I pose this question for mainly the people living just off SS and no other source of income. I have heard conflicting information and just want to clearify before I start calling some clients that do not need to file but may want to this year.

It appears to me a return should be filed even if filing isn't necessary. How else would they qualify for an Advance Rebate? I'm also assuming they can be e-filed.

[Larmil]

Ir-2008-18

Even if the taxpayer does not have to file a normal tax return do they need to file this year just so the IRS know they exist so they would qualify for the FREE money? I pose this question for mainly the people living just off SS and no other source of income. I have heard conflicting information and just want to clearify before I start calling some clients that do not need to file but may want to this year.

Says you MUST file to get rebate,

[superman]

Does everryone have to file?

Even if the taxpayer does not have to file a normal tax return do they need to file this year just so the IRS know they exist so they would qualify for the FREE money? I pose this question for mainly the people living just off SS and no other source of income. I have heard conflicting information and just want to clearify before I start calling some clients that do not need to file but may want to this year.

[Zee]

President Bush has signed legislation. It's official.

[Bees Knees]

Is anyone understanding from this how the $300 per child is going to work. I thought when they started talking about this that everyone with children was going to qualify for the child rebate.

Now it looks like that only people eligible for the child tax credit is going to get it. It also doesn't say if the Aditional Child Tax Credit is going to factor into the equation. So if someone was eligible for $500 of the $1000 child tax credit, then I am assuming they will not get the $300 for their child because the tax liability has already zeroed out. Or are they going to just say that if you received any amount of child tax credit then you qualify for the $300 extra per child.

From the update:

Special rules. In the case of certain taxpayers:
• The credit will not be less than $300 ($600 MFJ), and
• The credit will be increased by $300 multiplied by the number of children that qualify
the taxpayer for the child tax credit under Section 24(c).
The following taxpayers qualify for these special rules:
• The taxpayer has qualifying income of at least $3,000, or
• The taxpayer has a net income tax liability which is greater than zero, and gross
income which is greater than the sum of the basic standard deduction plus the
exemption amount (twice the exemption amount in the case of a joint return).

So you will note that it does not say you actually have to receive some benefit from the child tax credit. Your tax could already be zero and the child tax credit, and/or additional child tax credit does you no good.

The only requirements are you have to have a child that would qualify you for the child tax credit, and you either have at least $3,000 of qualifying income, or your tax liability is greater than zero with gross income in excess of the standard deduction and personal exemption.

[quicksam]

Is anyone understanding from this how the $300 per child is going to work. I thought when they started talking about this that everyone with children was going to qualify for the child rebate.

Now it looks like that only people eligible for the child tax credit is going to get it. It also doesn't say if the Aditional Child Tax Credit is going to factor into the equation. So if someone was eligible for $500 of the $1000 child tax credit, then I am assuming they will not get the $300 for their child because the tax liability has already zeroed out. Or are they going to just say that if you received any amount of child tax credit then you qualify for the $300 extra per child.

[Bees Knees]

This package for individuals is based on the lesser of 1. net income tax liability or 2. $600 ($1200 MFJ)

Referencing 'net income tax liability' am I right in assuming we are talking about line 44 of the 1040 (i.e. before credits) or are we talking line 63 (i.e. after credits applied and SE tax added)?

The update defines net income tax liability as:

Net income tax liability. The term net income tax liability means the regular tax liability, plus any additional tax under AMT, minus any nonrefundable personal and other credits (but not reduced for the child tax credit).

[Ray]

correction

I guess that should read line 46 rather than 44

[Ray]

Hate to ask dumb questions but...

This package for individuals is based on the lesser of 1. net income tax liability or 2. $600 ($1200 MFJ)

Referencing 'net income tax liability' am I right in assuming we are talking about line 44 of the 1040 (i.e. before credits) or are we talking line 63 (i.e. after credits applied and SE tax added)?

[BOB W]

Just moving the thread to the top...

[taxmandan]

The only complicated thing is getting everyone to tell us next year if and how much of a rebate they received, so we can see if they get any additional credit.

Hopefully theIRS will do like they did with the advance child tax credit and give us a website to check on amounts paid as an advance refund.

[BP.]

The 10% bracket for 2008 is still in play.

The only complicated thing is getting everyone to tell us next year if and how much of a rebate they received, so we can see if they get any additional credit.

Thank you for all the info, Bees, especially these 2 clarifications.

[Bees Knees]

It is similar to what happened with the Child Tax credit advance refunds many years ago. They increased the Child Tax credit, but then sent rebate checks the summer before. If they didn't get their rebate check that summer, they got an increased Child Tax credit.

This is the same thing. They added a new refundable credit for 2008, but then they are going to give it to you this summer as an advance refund. If you don't get your refund this summer, you get the refundable credit when you file your 2008 return.

Since they are giving you a new credit for 2008, either in the form of an advance refund or refundable credit, your withholding for 2008 is not affected. This final version is not the same as the initial versions the President originally proposed where they were going to do away with the 10% bracket in exchange for the rebate. The 10% bracket for 2008 is still in play.

The only complicated thing is getting everyone to tell us next year if and how much of a rebate they received, so we can see if they get any additional credit.

[JohnH]

$3,000

$3,000 Refund for 2008.

This is a true rebate - it won't affect 2008 withholding or 2008 taxes, except for people who qualified for the rebate initially but for whatever reason didn't receive it. Those people will get the rebate amount when the file their 2008 return.

[oceanlovin'ea]

Reduce refund next year?

Okay, maybe I am dense this morning, but I still don't quite get the full picture. Will this affect the refund that people would get when they do their tax return for 2008.

Example, Bill and Mary file tax return for 2008, MFJ. They have 2 children. Their refund would be $3000. They qualified for and received an $1800 refund check. When I prepare their tax return for 2008, will they get a refund then of $1200 or $3000.

Linda F