Until the American Recovery and Reinvestment Act passed in February 2009, many American were wondering, “Will there be another government stimulus check?” The final stimulus package reveals that only certain Americans will receive one-time economic stimulus payments of $250, but most Americans will not get another check. The only chance most Americans have at seeing a tax rebate in 2009 is through the Recovery Rebate Tax Credit explained below.
Who Gets 2009 Stimulus Checks?
One-Time Payments for Retirees, Disabled Veterans, Supplemental Security Income Recipients
The American Recovery and Reinvestment Act of 2009 provides for a one-time payment of $250 to disabled individuals, retirees, and those who receive Supplemental Security Income (SSI) from the Social Security Administration. Railroad retirement beneficiaries and disabled veterans who receive benefits from the U.S. Department of Veterans Affairs will also get a check. According to the IRS, individuals will receive these payments from their respective agencies and not the IRS.
What is the Recovery Rebate Credit? Not a Second Stimulus Check
Other than the people mentioned above, no one else will get a tax rebate unless it's a Recovery Rebate Tax Credit. The recovery rebate is not another stimulus payment in addition to the 2008 tax rebate; it is simply a chance for anyone who did not receive an economic stimulus payment in 2008 due to certain circumstances to get a second chance at the same rebate check. The IRS has noted, however, that most taxpayers will not qualify for this second-chance stimulus check.
According to the IRS, major factors that could qualify an individual for the Recovery Rebate Credit include the following:
- A financial situation that changed dramatically from 2007 to 2008.
- The person didn’t file a 2007 tax return.
- The individual gained an additional qualifying child in 2008.
- An individual was claimed as a dependent on another person’s 2007 tax return, but is no longer considered another person’s dependent in 2008.
For more details about this second chance at receiving a 2008 tax rebate, see the article Recovery Rebate Tax Credit.
Economic Stimulus Checks: Are They Taxable, Do They Have to be Repaid?
A hotly contested issue is whether 2008 tax rebates are taxable. They are not. Taxpayers do not have to pay them back on their 2008 tax returns. Last year’s tax rebates simply affect the amount of this year’s Recovery Rebate Credits individuals are eligible to receive. The IRS noted instances of early versions of 2008 tax software incorrectly adding 2008 stimulus payments to taxable income. Ultimately, a taxpayer should not report the 2008 tax rebate as taxable income on an individual income tax return regardless of what a tax preparer says or tax software indicates.
Related economic stimulus package & government stimulus check article:
$250 Stimulus Check Facts for Veterans, Retirees
Another Obama administration initiative:
Obama Health Care Reform for Americans
Resources:
IRS Economic Stimulus Payment Information Center
Form 1040, U.S. Individual Income Tax Return
Lena Gott - Lena Gott is a Certified Public Accountant who gives practical financial advice to her readers.
Comments