Those $600 rebate checks about to spew forth from the Treasury as part of a $168 billion economic stimulus plan are an advance on a 2008 tax credit. We explain how this works after the jump.
Who Is Eligible?
Anyone who files a 2007 tax return with an adjusted gross income between $3,000 and $87,000. The limits are twice as high for couples filing jointly. Since the rebate is tied to your tax return, your rebate will be delayed if you file for an extension, so get your documents in order by April 15.
How Much Is The Rebate Worth?
The rebate is initially worth $300, but rises to match the tax you owe up to $600. Couples filing jointly get twice as much, up to $1,200. The rebate’s value decreases by $50 for every $1,000 earned above $75,000.
What Exactly Is Being Rebated?
Congress implemented a one-time tax cut for income earned in 2008. Rather than delay the benefit of that cut until you file your tax returns in 2009, Congress is giving you the money now.
What Happens If I’m Not Eligible This Year?
If you don’t qualify now (either your AGI is below $3,000 or above $87,000,) but do qualify next year, you can still claim the credit when you file your returns for 2008. If you qualify this year, but not next year, congratulations, you win, enjoy your free money.
Great! What Should I Do With My Rebate?
The government wants you to immediately inject your rebate into the economy by buying all those delicious consumables we love to write about. Saving or paying back student loans is not what they have in mind.
How Will the Economic Stimulus Tax Rebate Affect 2008 Tax Returns? [Consumerism Commentary]