Monday, February 2, 2009

Tax Day might make you a little RICHER.

Do you remember the economic stimulus checks that were sent out a while back? From what I understand, a lot of people either didn't get one or received less than they were supposed to. So, if you're one of those people LISTEN UP!!!

When you fill out your TAX FORMS for 2008, you MAY be able to apply for the recovery rebate credit. This is a special federal tax credit for 2008 only!

The recovery rebate is available for individuals who did not apply for the economic stimulate rebate in 2007. It is also available for people who's rebate is higher when calculated using their 2008 financial information.

If you did not file an income tax return for 2007 or did not qualify at the time because your income was either too low or too high you may not have received money that you are due.

Since the economic stimulus package was an advance payment of the Recovery Rebate Credit, the amount of credit you may now claim (if any) will depend on how much you received.
  • If you were paid an amount that was reduced or eliminated by the IRS in order to pay for back taxes, etc., then the amount to enter into the calculator is the amount before that reduction.
  • Your check was based on your 2007 filing status, and the Recovery Rebate Credit is based on your 2008 filing status. Each spouse who filed jointly in 2007 is considered to have received half of the ESP.
  • So, if you switched your filing status to or from Married Filing Jointly between 2007 and 2008 (or you are filing with a different spouse in 2008), you will need to enter only the portion paid to each spouse filing the 2008 return.

If you do not have at least $3,000 of qualifying income in 2008, but you do have enough other income that you are required to file a tax return, you may be eligible for a Recovery Rebate Credit of $300 ($600 if married filing jointly) if your tax (before this credit and before the Child Tax Credit) is at least $1. I'm not sure, but I'm hoping that all of us sweepstakers who got a Misc 1099 might be eligible. You may also qualify for a credit of up to $300 per qualifying child. So, if you gave birth in 2008 you'd be eligible for an extra $300!!!

IMPORTANT - You can't claim this credit if you have already received the maximum amount of the credit in the form of your Economic Stimulus Payment. So, you cannot claim the credit if:

  • You received (before any reductions that paid back taxes, etc.) an Economic Stimulus Payment of $600 ($1,200 if married filing jointly) and you have no qualifying children.
  • You received (before any reductions that paid back taxes, etc.) an Economic Stimulus Payment of $600 ($1,200 if married filing jointly) plus $300 per qualifying child, and you do not have additional qualifying children in 2008.

For more information, please see the IRS Recovery Rebate Credit Information Center.


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