5 Myths About The Upcoming Tax Rebate Stimulus Check

There are a lot of myths and rumors going around out there about the upcoming stimulus check. Tax Cat is in full debunk mode this morning. Careful of the claws, ladies and gentlemen. He gets touchy when tax season ends and he has to retire the glasses for another year and go back to ruining things in Chad’s apartment.

5. Myth: The tax rebate is taxable income and I’ll have to pay taxes on it next year.

Fact: The rebate is a rebate. It is not taxable income. You will not have to pay taxes on this money.

4. Myth: People who aren’t normally required to file a tax return can’t get the rebate.

Fact: If you have at least $3,000 in certain types of income, you may be eligible for the economic stimulus payment. People who qualify include Social Security Recipients, Veterans Affairs Recipients, Railroad Retirement Recipients, and Low-Wage Workers.

3. Myth: The IRS will call or email you about your rebate check, and they can help you get it faster if you give them your bank account information.

Fact: The IRS is not going to contact you about speeding up this rebate check, and they never contact anyone via email. Ever. At all. Filers who used direct deposit will see their money more quickly, but no one can help you get it “faster.” You will receive your money based on the last two digits of your social security number. You can check out the schedule by clicking here. Don’t give out your banking info to scammers!

2. Myth: I don’t qualify for the rebate because I’m a stay-at-home mom and don’t make $3,000.

Fact: If you’re married, filing a joint return, and have $3,000 in taxable income between you — you qualify for the rebate.

taxcatsaysgoodbye.jpg1. Myth: This is just an advance on next year’s tax return! I’ll get less next year!

Fact: This is incorrect. Marketplace’s Tess Vigeland figured out where this silly little rumor was coming from: “the last time the federal government issued checks, back in 2001,the stimulus was indeed an advance, of sorts, on the Bush administration’s tax cuts. The bottom line went from 15 percent 10 percent. So, maybe folks are assuming that it is the same this time. It is not. This is not an advance on next year’s refund.”

We know you’re all sad that tax season is over, but you can always snuggle up to Tax Cat on Facebook.

(Photos:Chad Beckerman)

Comments

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  1. AD8BC says:

    Always good to get my money back.

    Now, if only the government would reduce their spending to compensate.

  2. deserthiker says:

    I think #2 is not completely correct. If you have $3000 income between you, you qualify for UP TO $1200. You don’t automatically get $1200.

  3. kingoftheroad40 says:

    cool free money or is it ????

  4. B says:

    Actually, if you’re a stay at home Mom, married and filing jointly, you should get at least $1500, since it’s hard to be a mom with no children.

  5. jiminyxmas says:

    On the more important topic of Tax Cat… he now has a Facebook:

    [www.facebook.com]

  6. EyeHeartPie says:

    @deserthiker:

    True. Check this site out for more info on the rebate check.

    [usgovinfo.about.com]

  7. Meg Marco says:

    I’ve reworded it to make it more accurate.

  8. KyleOrton says:

    While it’s not an advance on the refund, the rebate does apply to your 2008 taxes as the Tess Vigeland link mentions; they’re just giving it to you now in the hopes that you buy a lot of crap ASAP.

    This way, if your situation changes in 2008 (become a parent, like me) we will get that extra $300 when we file next year.

  9. rdm says:

    “The IRS is not going to contact you about this rebate check, and they never contact anyone via email.” Um – they already put something in regular mail about the rebate check. No?

  10. jiminyxmas says:

    @rdm: you’re kind of a moron, aren’t you?

  11. Caveat says:

    What about the negative myths?
    1. If you are unemployed all year and lived off of your meager savings you get NOTHING. You have to have had EARNED INCOME.
    2. Individuals making over $75K or couples making over $150K will get their rebates reduced.

  12. acknight says:

    Re #1: it’s not Federally taxable income. While most states have pledged not to count it as taxable income if they have state income taxes, that’s not absolute.

  13. Anonymous says:

    The pics are awesome!

  14. kjherron says:

    What about the IRS program to send you the rebate in the form of consumer goods, instead of cash? They covered it on Marketplace radio, so it must be true!

  15. jenl1625 says:

    On #4 – while it’s true you can get the rebate even if you normally don’t file, you do have to FILE (or be included in someone else’s filing) this year in order to get it . . . which is probably where the myth comes from.

  16. I wish I had a Tax-Cat to call my own.

  17. ConsumptionJunkie says:

    I am TC’s biggest fan.

  18. krom says:

    Actually it does seem that #3 is partially true, looking at the schedule linked. If you gave the IRS your direct deposit information, you’ll get your rebate *on or before* May 16; otherwise, checks won’t be *mailed* out until *after* May 16 and as late as June.

  19. synergy says:

    So we owed money, but I still put in direct deposit info. Will they use that to give us the money?

  20. AD8BC says:

    @synergy: From what I was told, yes. That’s what TurboTax did for me, and I checked on it…

  21. Bladefist says:

    I hate facts and being fully aware. Now I cant bash bush for only giving the rebates for free to the rich. dang it

  22. I would really, really, love to belive #5 isn’t a myth, but I wouldn’t put if past the outgoing administration to amend the tax code to make this so.

    And what about at the state level? This is a federal rebate: can’t the state choose to view it as taxable income.

  23. ClayS says:

    @Bladefist-미국사람:
    I’m sure you can twist the facts anyway you like and plenty of ignorant people will believe you. You know what Goebbels said, “the bigger the lie…”.

  24. Bladefist says:

    @ClayS: i dont know what you are smoking. nobody here believes me lol. And dang it, read the article man. Quit being so paranoid. You little saying, from Goebbels I guess, applies to you. Your probably want one those ‘Bush Lied’ nut cases. Like liberal congress would let Bush do anything remotely viewable as wrong before putting him on trial.

    Take your pills before you post

  25. ClayS says:

    @Bladefist-미국사람:
    No, I continually hear blame Bush rhetoric in this forum. Bush and most rebulican administrations advocate lower taxes. That of course has usually been twisted into tax cuts for the rich only. If you were being sarcastic in your first post, I didn’t recognize it in midst of the anti-bush posts.

  26. Trai_Dep says:

    Here’s hoping that Tax Cat and Is Tax Season Over Cat make hot, mewling, back-clawing Cat Sex until the rebates come out. Because they’re both SO cute and they have so many things in common.

  27. FrankTheTank says:

    @Bladefist-미국사람: Yes, to paraphrase Kanye, George Bush hates Rich People.

  28. mzs says:

    @synergy: [www.irs.gov]

    Q. If I’m not expecting a refund, should I still fill out the direct deposit line on my return so I can get my Stimulus Payment direct deposited?

    A. Yes. Even if you aren’t due a refund on your tax return, filling out the bank routing information will allow for your Stimulus Payment to be direct deposited.

    Anyway I just started thinking about this, for us we are going to be getting more money back than we paid in taxes for 2007 considering the children. How is that going to work-out for the government funding programs in the years to come? I mean you get to add your child tax credit to your tax liability so with two kids kids that puts you well over the $1200 number even if you paid no taxes. Then I would guess that families making between $3000 and $150000 are basically the biggest chunk of filers. It is like the treasury is going to be hemorrhaging money.

  29. trujunglist says:

    I sure would’ve rather not paid out my ass in taxes instead of getting this rebate.

  30. e-gadgetjunkie says:

    #6 If you’re a dependent, you get squat no matter how much you earn. Just learned this one the other night. My fiancee’s parents still claim him as a dependent because they want the tax break (they don’t help support him in any way) and so neither of us will be getting those pretty little checks.

  31. ClayS says:

    @e-gadgetjunkie:
    It might make more sense for his parents to not claim him as a dependent. They will get a $300 rebate by claiming him, but he would likely get a $600 rebate by himself.

  32. @AD8BC: Reduce spending on WHAT, exactly? People tend to be vague on this, particularly the people who want your vote. Bill Clinton’s last defense budget was under $300 billion, and we were scooping up al Qaida at the border and putting them in jail. The last Bush defense budget will more than double that, and they’ve been telling us for years now that we still have terrorists hiding under our beds. Forget what we’re getting for all this extra money, I want to know who’s going to pay for it all. I don’t believe in the money fairy, so save it if that’s your solution.

    Don’t get me wrong; spending cuts are wunderbar, but they aren’t a silver bullet. Far from it. Of course, if you have proof to the contrary, by all means write it up and submit it to your elected representatives for consideration.

  33. AD8BC says:

    @Steaming Pile: First, we could stop providing any kind of government services to illegals.
    Second, we can stop with the pork in congress. Enough said.
    Third, we can get rid of the useless people that are employed by the bureaucracy that the lawmakers have created (the tax code is 17,000 pages. It should be two or three pages tops. Then we wouldn’t need near the government employees at the IRS.
    Fourth, drop federal welfare and food stamps. Local churches and charities took care of this function before welfare was created.

    I would suggest this to my elected officials, but they never listen anyway. There are plenty of places to save money.

  34. AD8BC says:

    @Bladefist-미국사람: I believe you Bladefist.

    @trujunglist: Here Here!

  35. hi says:

    If only I had a facebook account! tax cat if you read this plz hit me up on myspace. nerf on.

  36. iblamehistory says:

    @e-gadgetjunkie:
    Same here, pretty much. We’re both claimed, both paid income tax, and he even OWED money. But we get nothing. And yet, while someone scraped by with $3,000, they’ll get something.

  37. iblamehistory says:

    @ClayS:
    But try to tell that to parents who would be doing away with their substantial dependent credit. I suggested it to my parents, and I got laughed at.

    One of the requirements to claiming someone is that they have to live with you… I don’t live with my parents, but they’re paying my rent while I’m in school, so I understand. They spend a lot in that regard. But my fiancé’s parents pay nothing, and he doesn’t live with them at all. He actually owed money this year, about $100 that we hardly have to spend, and neither of us will get this check.

  38. ryatziv says:

    @AD8BC: I’d vote for you.

  39. stopNgoBeau says:

    @iblamehistory: Then put on his form that no one can claim him, since technically, they can’t claim him. When the IRS audits, they will audit the parents. That will stop them pretty quick.

    And tell them you are going to do this before you do it. That way if they do it and get audited, its their own damn fault.

  40. stopNgoBeau says:

    @AD8BC: I’d vote for you, too. You just dont have a chance of getting elected.

  41. nequam says:

    @krom: I think the point of #3 is to warn people about phishing scams, where they are contacted by emails requesting bank info.

  42. bmt22033 says:

    I realize there won’t be much sympathy for my point of view on this but the thing that irritates me the most about the rebates is that the pols claim that by giving this money to people, they’ll turn around and spend it thereby helping improve the economy. That’s fair enough. But then why put an income cap on eligibility? If they said, “the economy really sucks and we’re going to give tax rebates to the people who need it the most”, then it certainly makes sense to have an income cap. But that’s not what they said. They said, “let’s give this money to people to go spend and that, in turn, will pump money back into our economy”. I feel certain that there are plenty of people/families that earn more than the income cap who would be happy do their part to help the economy by going out and spending a $600 or $1200 tax rebate check from the government. My wife and I both work full time in white collar jobs. We also live in one of the most expensive parts of the country. If it weren’t for that, there’s absolutely no way our salaries would be what they are. As difficult as it might be for a lot of people to appreciate, there really are some parts of the country where $150,000+ a year still makes you a middle class family. With that in mind, it doesn’t make sense to me that you would tell a family that pays, $50k, $60k or $70k in federal taxes alone that they’re not deserving of $1200 to spend like everyone else? Even though his overall tax rate is undoubtedly lower than most people, how do you tell someone like Bill Gates who’s paid hundreds of millions of dollars in taxes (if not more) that he doesn’t deserve $1200 to go spend?

  43. Trai_Dep says:

    @AD8BC: Ah, yes, a $13.8 trillion economy of 300m people, if only it were run by a classroom of reasonably bright sixth graders.
    I’m shocked you skipped the “return to the Gold Standard” suggestion.

  44. chiieddy says:

    @stopNgoBeau: The first year I was out of the house, my parents and I discussed it, and they claimed me as a dependent for the full year (I left in July). This gave them a better credit and they paid me the difference of what I would have gotten in a refund. I came out even and they ended up doing better than they would have without me.

  45. Repique says:

    @AD8BC: Yes, by all means, let’s simplify the tax code!

    I’m sorry, did you like being able to deduct student loan interest, mortgage interest, property tax payments, child care costs, charitable donations, business expenses…

    Let’s cut the whole thing down to one form:

    1. Yearly income:
    2. Box 1 x .3:
    3. Tax owed:

    Much simpler, right?

    Yeah, I’ll pass, as someone who deals with a lot of business tax returns. I don’t want to be the one to explain to them that sorry, this year we can’t take section 179, that there are no more like-kind asset exchanges, no more mileage. I like the tax code, thanks. Even on my personal return. Life is complex. Trying to distill revenue collection into a “simple” process that ignores that complexity would be a disaster.

    On the tax rebates in general: The current theory among folks I know is that what’s happening here is that they’re getting a ton of people to file who haven’t in ages. Which suddenly gives them recent addresses and bank account information for a lot of people. Wouldn’t surprise me if collections on delinquent taxes pay for this whole business. In the meantime, I’m not going to say no to a little extra cash, anyhow. I do wish they weren’t holding out on those with extensions, though, that’s made some folks peevish because it hasn’t been as widely publicized.