Economic stimulus payments are a federal government program designed to put money in the pockets of the taxpayers in the hopes that it will be spent in the marketplace and stimulate a sluggish economy. The program has been criticized and praised, and only time will show if it has the desired effect.
If you had $3,000 of qualifying income in 2007, you may be eligible for a 2008 stimulus payment. There are, however, other criteria that must be met. The qualifying income must be from, or a combination of, your earned income, Social Security benefits, railroad retirement or Veterans Affairs benefits. You, and family members on your 2007 tax return, must have valid Social Security numbers. Neither you, nor any family members on your return can be claimed, or are eligible to be claimed, on anyone else's federal tax return. To get the nontaxable payment in 2008, you must have filed your 2007 federal tax return. If you are not required to file a return, because your income is too low or your income is tax-free, you must still file a return to receive the payment.
How much of an economic stimulus payment you are entitled to is based on several factors, including filing status, number of dependents and your tax liability. If you have no net tax liability, your payment is $300 if your filing status is single, or $600 if you are married, filing jointly. If you have a tax liability, the economic stimulus payment is equal to your tax liability but cannot exceed $600 if you file as single or $1,200 if you are married, filing a joint return. You receive an additional $300 for each child who was under 17 years of age as of December 31, 2007. If you are single and your adjusted gross income is $75,000 or more, your payment is reduced by 5 percent of the income above the threshold. If you did not file a 2007 return, you can file an amended return on Form 1040X to receive the benefit. You must file within three years of either filing your return or within two years from the date you paid the tax, whichever is later.
Certain income is not considered as qualifying income by the Internal Revenue Service for the purpose of qualifying for the economic stimulus payments. While Social Security retirement is considered to be qualifying, Supplemental Security Income, known as SSI, is not. Pension and annuity payments provided by state and local governments and rental income also do not qualify. If the eligible person died, but did file a 2007 tax return, the payment goes to the estate of the deceased or to the deceased's representative who filed the return. You cannot receive the payment if you are a nonresident alien. If you did not qualify in 2007, but will qualify in 2008, complete the worksheet provided with your 2008 taxes to determine if you are eligible.
Visitors Also Saw
Who Is Exempt From Federal Withholding?What Do the Area Numbers in a Social Security Number Represent?How to Get a Copy of a W2 FormAlternative Energy Tax CreditsShould I Claim 1 or 2 on My Taxes?Steps to File Your TaxesWhat Are 3 Ways to Reduce Income Taxes?How to File Income Tax Form 1040EZHow to Change the Status on a W-4Tax Questions for Marriage