Stimulus Checks Will Not Cut Into Your Rebate

False reports have circulated that the stimulus checks are an advance on your tax rebate and were going to cut into your tax rebate. That’s not the whole story. Yes, it’s an advance, but it’s an advance on an additional credit Congress passed for your 2008 earned income. It’s too late to do that for 2007, seeing as it’s already over. “So the government is making me borrow from myself?!?!?” No. Congress is giving your 2009 self a $600 credit, and is sending that $600 back in time by one year.

The Skinny on the Stimulus Plan [WSJ]
PREVIOUSLY: $600 Rebates Are A Tax Credit Advance
(Photo: Getty)

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  1. cmdr.sass says:

    Who would have thought that Congress could complicate something as simple as tax policy? /sarcasm

  2. Toof_75_75 says:

    So the $600 will never lower any of my tax returns? Is that what I’m to understand?

  3. Does this have anything to do with Biff stealing the Sports Almanac from Martie?

  4. ladycrumpet says:

    Let’s hope no one steps on a butterfly and changes the presidency in the future. :p

  5. AD8BC says:

    @Toof_75_75: Yes. Your 2008 taxes have been reduced by $600. Instead of waiting until next year for you to get that extra $600, they are sending it to you a year in advance.

    I’m all for lowering taxes… but the guv’ment needs to reduce the spending as well.

    @cmdr.sass: As far as I am concerned, tax policy should take no more than one or two pages. It should be that simple. Something fair, no loopholes, etc.

  6. juri squared says:

    So, is this a sort-of non-apology for the previous article, which was hugely confusing on this point?

  7. missbheave (is not convinced) says:
  8. Mr. Gunn says:

    The complicatedness of this has nothing to do with the fact the current president’s term is up this year, does it?

    Whatever ill effects taking on this much more deficit spending will cause won’t show up until next administration, but I’m sure that’s not the reason for setting it up this way.

    People are smart enough to connect “Bush gave me $600 in 2008″ and “…and now the dollar is worthless in 2009″, aren’t they?

    /no, they aren’t. you’ve seen how many people voted for Huckabee?

  9. Tux the Penguin says:

    @Mr. Gunn: I really think this last less to do with the final year of the Bush presidency and a whole lot more to do with the fact that there are national elections at the end of this year. As people have said, this is more of a political stimulus package than an economic stimulus package.

    And can we please stop attacking Bush on this issue? In case you haven’t noticed, the Democrats aren’t exactly moaning about deficit spending right now…

  10. AD8BC says:

    @Mr. Gunn: You know what, I bill myself as a conservative… but I am convinced that, if we keep going down this path of massive government spending (on both sides of the aisle) and then taking money away from the people who earn it… then nobody from either party is going to fix it.

    We need to get real people elected into office, on all levels… not lawyers looking to make loopholes, not people who take campaign money from people in exchange for promises… there should be a new law that states that candidates must campaign with ZERO dollars donated…. or they should be allowed to raise a pawltry sum (maybe a million) so that they can set up a campaign office, and a website. That’s all you need. Let the media do your campaigning for you… talk radio for the conservatives, CNN for the liberals.

    Then real people, using real common sense, can run this country. Real people electing real people… kind of sounds like the original intent?

  11. warf0x0r says:

    @ladycrumpet: Yes, because if the T-Rex got loose I’d think he’d go right for the children.

  12. sir_eccles says:

    To quote my accountant on Monday “No, it’s free money”

  13. B says:

    Any chance they could send it back to my 1783 self, then deposit it in a savings account for me?

  14. SkittleKicks says:

    @B: Why that far back? How about just about 20 years back and put it in Microsoft stock?

  15. youbastid says:

    @jurijuri: It seems to be just that!

  16. youbastid says:

    @SkittleKicks: Microsoft stock is worth $28. Wouldn’t be much of a windfall.

  17. youbastid says:

    Today:
    “False reports have circulated that the stimulus checks are an advance on your tax rebate and were going to cut into your tax rebate.”

    Headline from 2/9
    “$600 Rebates Are A Tax Credit Advance”

    Maybe time to do some house cleaning, consumerist!

  18. missbheave (is not convinced) says:

    @AD8BC: So they are really just giving my money back to me? I am borrowing money from my future self?

    At least the dollar is worth more now than it will be in 2009…

  19. m4ximusprim3 says:

    @youbastid: How is the 2/9 headilne inaccurate again?

    Granted, if it said ‘newly fabricated 2008 tax credit advance’ It would be more accurate, but I got it just fine the first time.

    Seems to me the problem is people making authoritative comments which are devoid of actual facts.

  20. vllygrrl says:

    Hmmm…I’m confused. Due to a severance package/unemployment/string of wacky consulting jobs, we ended up just over the couples threshold, and will probably only get $750 or so instead of $1200. I expect that we’ll be well under that threshold this year on our income – does that mean they’ll owe me the rest when we do our taxes next year? Probably not…

  21. AD8BC says:

    @missbehave: Exactly. It was a one-time tax reduction for 2008. They just wanted to get your money to you before the elect…. uh, I mean, they wanted to get the money to you quick so you can spend it and save our economy.

  22. orielbean says:

    Actually, Youbastid, their stock split enough times that you would still have made out like a bandit.

  23. m4ximusprim3 says:

    @vllygrrl: Ooh, good question. I know if you have kids this year, you’d get the rest of the credit come next spring. I don’t know if that extends to wages. I would think it would have to (they just use your 07 to extrapolate, but the actual credt rules apply to your 08 return).

    The neat thing is that if they overpay you in 07, you get to keep the excess in 08. Good fun for those of us in line for promotions in the coming year :)

  24. youbastid says:

    @m4ximusprim3: It’s not inaccurate, per se, but you can tell by reading the comments that the word choice was causing much of the confusion.

  25. Chewyrobbo says:

    @ MAX FISCHER PLAYER
    Nice. I am still laughing at your comment. That sums everything all up in one.

  26. AD8BC says:

    @youbastid: Not innacurate. But improperly worded. Maybe not on purpose, at least here.

    But the rest of the media, in order to create a big fuss, probably did word it that way intentionally.

  27. missbheave (is not convinced) says:

    @AD8BC: sigh. so much for the iphone I thought Bushy was going to pay for.

  28. hi says:

    this is why time travel is bad

  29. mac-phisto says:

    @AD8BC: i once simple met a farmer from ohio in a pittsburgh bar that said one of the most profound things i’ve ever heard:

    “a politician knows all the problems, but only a statesman has solutions. too bad this country hasn’t had one since thomas jefferson”.

  30. Buran says:

    @m4ximusprim3: But doesn’t it mean my 09 rebate will be smaller?

  31. mthrndr says:

    @mac-phisto: What about Lincoln? Wilson? FDR? I agree with the first part of the statement, but the second….eh, not so much.

  32. tande04 says:

    @Buran: No, nothing is smaller. Its pretty much free money.

    Next year you’ll get a $600 credit which will reduce the amount of tax you owe by $600. They’re just giving it to you now in check form.

    Say you over paid this year by $1000, you get a $1000 refund. Next year you do the same (you should really look at changing your w-4). You over pay $1000 and you get a tax credit of $600. Since you already got that $600 you’re only going to get the $1000 which is exactly what you’d of gotten anyway.

  33. notallcompaniesareevil says:

    “So the government is making me borrow from myself?”
    Well, do you know who pays taxes and redeems gov’t debt. Yep, the taxpayer. So this statement is actually 100% true.

  34. danger says:

    “false reports”?

    You mean, the Consumerist posted a bunch of confusing crap. And you’re still confusing things. A tax REBATE is NOT THE SAME as a tax REFUND.

    Please stop reporting on it!

  35. erica.blog says:

    Who needs time machines when you have Congress :)

  36. doctor_cos wants you to remain calm says:

    If you look closely at the checks, they will be dated 2009.

  37. jarchie219 says:

    Okay. Now that we ave been on topic for a while, lets talk about immigration some more.

  38. forgottenpassword says:

    Ok,,, just please someone explain this to me. Since I usually end up paying back about $150 to the government every year (instead of getting a refund like most people)…. how does this effect me?

  39. threeoutside says:

    I’m completely confused now. This didn’t help me understand it at all. But then I’m pretty slow about this stuff.

  40. efolgate says:

    great way of putting it. Don’t worry people, the government is dumb, but not dumb enough to ask for the money back next year!

  41. Catperson says:

    I’m still confused about one thing: I only pay about $600 in taxes a year and I end up getting it all back. So does this mean I won’t get anything back next year? Because that’s what it sounds like.

  42. nequam says:

    @Catperson: As long as you make $3000, you will get a rebate check this year. Next year, you will still get your typical refund. The rebate is in addition to your refund.

  43. dainell says:

    The explanation focuses on how, if you your tax calculation next year hows you’re entitled to a bigger payment, you’ll get the additional money with next year’s rebate. An example is if you get another child.

    What it doesn’t say is what if next year’s calculations shows you’re entitled to a smaller payment. You’ll have to pay the difference to the IRS. They have effectively gotten you to spend now the money you’re expecting to get next year, which later it turns out you’re not entitled to get after all.

    Is this possible, for example if you lose one or more child (through death or the child simply getting old enough that they no longer qualify as a dependent)?