Good Things Come to Those Who Wait, but Rebate Checks Come to Those Who File
by: Debbie Dragon
The much-talked about rebate checks, under the economic stimulus package, was signed into law by President Bush on Wednesday, February 13th. If you are entitled to the rebate check, you have to file a tax return for 2007 as your rebate will be determined based on your 2007 tax information. If you don't file- you won't get the rebate.
There are millions of American's who qualify for the rebate checks, but who wouldn't normally file a tax return. People who earn below a certain income or who are on Social Security aren't always required to file a return, but if they want to take advantage of receiving their portion of the economic stimulus package, they'll need to file a return anyway.
Due to the requirement of filing a 2007 tax return in order to get the rebate check, the IRS estimates having to process an additional 10 million or more returns this year.
Do you usually file your tax return late, or ask for an extension to file? If you do this, you'll be delaying your rebate check- but it is still unclear how the IRS will determine the schedule of mailing out the checks. They'll start mailing in May of 2008- but will no be included with your regular tax refunds, if you receive any. The IRS does report that as soon as it's determined, all of America will know when to expect their checks to arrive.
About a week or so before the check is actually mailed, recipients will receive a letter that informs them of the amount of their own rebate check. If you choose to receive your rebate with a direct deposit, you will probably get the deposit around the same time as the letter telling you how much you are going to get, because direct deposit speeds up the process.
The good news is the rebate will not be counted as taxable income on your 2008 tax return. If your situation changes in 2008 you may actually be eligible for a higher rebate, which you'll receive in the form of a tax refund in 2008- but if the situation changes and would cause you to receive a lower rebate, the IRS indicates that you would not have to repay any of the rebate you received back.
The economic stimulus package may encourage people to file their tax returns earlier this year- but chances are, it will slow the issuance of regular tax refunds because of the additional tax returns the IRS will have to process.
