Economic Stimulus Act of 2008

[Brad Imsdahl]

http://www.thetaxbook.com/updates/2007/2-11-2008_Update/WNS-18-23.pdf

This is the link to the update for the new law. The pages in TTB that are affected by the new law will be posted on our updates page with a 2/11/2008 posting date, as well as the update for the WebCD.

[S T]

Many Thanks

Thanks Brad and Paul for working so hard to furnish this information timely.

Sandy

[BOB W]

I'M POSTING TO BRING THIS BACK UP TO THE TOP.

I missed it yesterday................

[Jiggers]

Thanks

Thanks, Brad.

Now, if the IRS would work as fast as you to get the workings of this Stimulus Package to us, so we know what to advise those that don't normally file!

[Larmil]

I would guess usually nothing

Thanks, Brad.

Now, if the IRS would work as fast as you to get the workings of this Stimulus Package to us, so we know what to advise those that don't normally file!

The bill gives an additional $31 million to the SSA to administer distribution of the refund checks. Until I hear different I will advise my clients on Soc. Sec. that probably do have to file
simply for purposes of the refund.

[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

[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.

[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.

[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.

[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.

[BOB W]

Just moving the thread to the top...

[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)?

[Ray]

correction

I guess that should read line 46 rather than 44

[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).

[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.