Tax refund? Tax stimulus rebate? How to get both of them faster

This tax season, many of us can look forward not only to a tax refund, but also to a one-time tax rebate, ranging from $300 to $1,200, plus $300 for every child.

To get that rebate, you must file a 2007 federal tax return.  And if you want that new rebate faster, you should file your 2007 taxes electronically and arrange for direct deposit of your tax refund. Doing so will automatically will also ensure direct deposit of your rebate. The IRS asserts this route is faster and more secure than snail mail.

How long can you expect to wait for your refund if you do it all electronically? As little as 10 days from the time the IRS confirms it got your return. And your rebate? The IRS says the earliest rebates will be distributed in early May.

Though the IRS hasn't said so, it stands to reason that early filers would get their rebates early as well. Conversely, it's a sure bet that if you file for an extension, you'll have to wait beyond that time for your rebate. That's because the IRS must have your 2007 return before it can determine the size of your rebate.

Other rebate facts:

•You must have at least $3,000 in income to get the rebate. At $75,000 in adjusted gross income for individuals and $150,000 for couples filing jointly, the rebate begins to phase out.

•If you're eligible to be claimed as a dependent on someone else's tax form, you're ineligible for the rebate. For example, college students who earned more than $3,000 can't get the rebate simply by asking their parents to forego claiming them as dependents.

•A number of folks who normally wouldn't file an income tax form, including certain veterans,  Social-Security recipients, and recipients of Railroad Retirement benefits, may be eligible for the rebate. But they MUST file a 2007 return in order to get it.

•If you've filed a 2007 return already but haven't included the benefits mentioned above--which might qualify you for a rebate--you can file an amended return, Form 1040X, available at  www.irs.gov.

•Beware of e-mail and phone messages on the rebate that purport to be from the IRS. They are most certainly are scams.

Comments

[Tobie Stanger (Consumer Reports)]

A delay in filing your return does not affect your eligibility for a rebate. However, you won't get the rebate until after you've filed.

[Donald Price]

Are tax free bonds considered as part of ones Adjusted Gross Income for the stimulus refund.

[Tobie Stanger (Consumer Reports)]

No. Income from tax-free bonds is considered unearned income. The IRS says only certain types of unearned income--from Social Security, for instance--will qualify toward the rebate. Income from tax-free bonds is not among those categories of unearned income that qualify for the rebate.

[Donald Price]

If my unearned income of taxfree bonds puts me over $150,000,
will my wife and I be eligible for the rebate. We do have Social Security to reach the needed minnimum income.

[Tobie Stanger (Consumer Reports)]

So is your only income from Social Security and the tax-free bonds? Or is there other income? If so, from what sources? I need to know in order to give you the right answer.

[Donald Price]

In reference to my previous question: We have an income loss on our farm operation, we have income from principle and interest on the sale of a farm, we also have interest from CDs and my wife receives a pension from teaching. We also are drawing money from our IRAs.

[Donald]

My Social Security gives me enough earned income to qualify for the tax rebate, but I need to know what is included in the Adjusted Gross Income. Are Tax Free Municipal Bonds included in the Adjusted Gross Income?

[Sonia Abrego]

My husband and I filed a joint tax return and we claimed my parents they do not work and are both over 55 years and we provide more than 50 percent of there income. How will the rebate work in that situation?

[Tobie Stanger (Consumer Reports)]

Sonia:

If you're asking whether you'll get the additional $300 rebate for each dependent, the answer is no. The dependent must be under age 17 to qualify you for that rebate.

[rhonda]

I am a singlemom/homemaker, my only income this year was my child support (+$3,000). Will I qualify for any rebates on my chldren? All are under 17 years of age and reside with me full time. Also I have joint custody of a niece, (4 yrs old), how will the rebate work on her if i qualify?

[Tobie Stanger (Consumer Reports)]

Donald (I assume you are Donald Price, from an earlier comment):

Sorry it took so long to get back to you. Your question was so interesting, I had to talk to the IRS and two CPAs to confirm what I suspected.

Yes, you and your wife would be eligible for the rebate, assuming the combination of earned income and Social Security benefits are greater than $3,000 in 2007, but do not exceed the limit of $174,000, after which the rebate is completely phased out for couples filing jointly.

As for your tax-free municipal bond interest, it is not considered in the determination of whether you qualify for the rebate. Only earned income (up to $150,00) or adjusted gross income (between $150,000 and $174,000) are considered, and the tax-free bond interest does not figure into either of those. So you could have millions in tax-free income from muni bonds, and that income would not disqualify you.

Amazing but true.

[Tobie Stanger (Consumer Reports)]

Rhonda,

Unfortunately, you are not eligible for either the basic rebate ($600 for a single or head-of-household filer), or for the $300-per-child rebate.

Your child support is not considered earned income, which is the basis of eligibility for the basic rebate. And in order to be eligible for the child rebate, you have to be eligible for the basic rebate.

[Kendra Phillips]

****STIMULUS TAX REBATE CALCULATOR****

I found this site in searching to estimate my tax rebate. I've seen many others trying to do the same. Hope it helps!

[Tobie Stanger (Consumer Reports)]

Kendra,

I'm not sure why, but the calculator doesn't link from your comment. But here's one I found, courtesy of the Associated Press:

http://hosted.ap.org/specials/interactives/wdc/rebate_calculator/index.html?SITE=PAREA&SECTION=HOME&TEMPLATE=template2.html

[davey]

I have a 16 year old and filed jointly,but i was already refunded around 3k in federal, and earned income credit,does that mean I just get $600+$300?Or does it go on your taxable income,which was $750

[Nicole Bailey]

Sorry my original email address was incorrect.

For those who owe on state taxes will they still receive a stimulus refund check or is it intercepted by the state?

[Tobie Stanger (Consumer Reports)]

Rhonda:

I should have qualified my earlier comment by noting that you will have another chance at the basic and child rebate next tax season (2009). If you can demonstrate on a 2008 federal tax return that you had at least $3,000 in qualified income in 2008, you'll be eligible for the rebate, which will be delivered after your file your 2008 return. Check this URL at the IRS Web site for a discussion of what's qualified income:

http://www.irs.gov/newsroom/article/0,,id=179181,00.html

[Tobie Stanger (Consumer Reports)]

Nicole:

The states operate tax-collecting agencies that are independent of the IRS. So no, the state will not intercept your rebate.

[Tobie Stanger (Consumer Reports)]

Davey,

The stimulus rebate is related to how much federal tax you paid for 2007, not the size of your refund. If as a couple filing jointly you paid, say, $100 in federal tax, you would get a basic stimulus rebate of $100. The basic stimulus rebate is capped at $1,200 for married couples filing jointly, so anyone who pays federal tax of more than $1,200 for 2007 will only get $1,200.

Once you're eligible for the basic rebate, you are also eligible for the full child rebate of $300. That rebate is not pro-rated based on how much tax you paid. So you'll get the full $300.

FYI, you'll have a shot at more of the basic rebate when you file your tax return for 2008. If you can demonstrate on your 2008 federal return that you paid more in tax for 2008 than the $100 on your '07 return, you'll get more rebate money. (But you'll have to wait 'til spring or summer of next year to get it.)

[Jay]

If you get a disabilty check as my only income and it is 7,000 and your daughter claims you on her taxes, can you still file for the 300.00?

[Tobie Stanger (Consumer Reports)]

If you are claimed as a dependent on someone else's tax return, you are not eligible for any rebate.

[Pablo]

Hi Tobie, I am married, filing jointly. I am service disabled and receive wartime VA Compensation (over 3000)and SS Disability (over 3000). SSD is accounted for on our return but VA Comp is not. My wife works and had 3200 withheld but after deductions we ended up actually paying 675 to the IRS. Whats up with us??
Thanks

[PJ]

In regaurds to the 2008 tax rebate. My husband and I filed joint with injured spouse form and we have 2 children together. He owes back child support from a previous marriage. I understand that his portion will more likely be offset to pay what's due, but will they take the $300 rebate for each child owed to us for our children to payback his back support? Or, will they follow our joint return to separate and disperse the rebabtes for our children, my husband and myself.

[Tobie Stanger (Consumer Reports)]

Pablo:

I assume you're asking if you and your wife will be eligible for the rebate. If I understand you correctly, your total tax liability was $675 for 2007. If that is so, I believe you will get a rebate of $675 as a couple filing jointly. (Taxpayers get back no more than they pay in, and any couple who's paid more than $1,200 will only get $1,200.) If you have kids, you'll get an additional $300 per child; it's not related to the size of your tax liability.

Your case is complicated, though, so you might check with the IRS at 1-(800) 829-1040 to confirm. Press 1 and then 5 to be connected to a live person. Ignore the IRS's suggestion to press "7" for tax rebate info. It's just a recording.

[pat miller]

we do not file since our only income is ssdi. the total exceeds $3,000. since we do not file what paperwork do we need to complete pat