Millions of seniors will get rebates... if they file

by Center for Personal Finance editors

NEW YORK (2/25/08)--Calling all senior citizens who haven't had to file a tax return in the past: If you want an economic stimulus rebate check this year, you need to file a 2007 federal tax return (CNNMoney.com Feb. 15).

If you're like most people, you won't have to do anything extra to get the rebate--simply file your 2007 tax return and show at least $3,000 in qualifying income. But if you had at least $3,000 in earned income--and therefore qualify for the rebate--but otherwise weren't required to file a return, now you must file if you want the rebate.

Both the Internal Revenue Service and AARP are making a special effort to reach out to about 12 million low-income seniors who may not realize they need to file a tax return to get their rebate.

Here's what you need to know:

• You must file. Since the rebate is based on your 2007 income, you can't get the rebate until you file your 2007 tax return and show at least $3,000 in qualifying income (CNNMoney.com Feb. 11). If you file by April 15, the Treasury Department estimates you can expect a rebate check sometime between May and early July. If you file an extension, you may not see the rebate check until the end of the year.

• Other benefits count. If you're a Social Security recipient, veteran, and/or retired railroad worker who otherwise wouldn't need to file a tax return, now you must file to get the rebate (irs.gov February). Perhaps you had $500 in earned income, plus at least $2,500 in qualifying benefits; in this case, you're eligible for the rebate. Report those benefits on Line 20a of Form 1040 or on Line 14a of Form 1040A. The only other lines to fill out are name, address, and Social Security number.

• Make it clear. Write "Stimulus Payment" at the top of any form you file.

• Opt for direct deposit. It's the fastest way to get your refund and rebate payments. If you opt for high-cost refund anticipation loans (not recommended by consumer advocates) or any other loan agreement with your tax preparer, your rebate will be sent via check so it doesn't go into the tax preparer's account.

• Keep 'em separate. Rebate checks will be sent separately from any 2007 tax refund amount you're expecting.

• Already filed? As long as you filed and reported at least $3,000 in qualifying income, you'll receive the rebate and don't need to do anything else. If you filed but your qualifying income was less than $3,000, consider filing an amended return (Form 1040X) if you discover you really did receive enough total income to qualify for a rebate.

• Need help? Don't spend $100 or even $50 on a tax preparer if you're getting a $300 or $600 rebate check. Instead, visit one of the IRS's Volunteer Income Tax Assistance program (VITA) sites, which offer free tax preparation for lower income and elderly individuals. VITA volunteers typically are located in community and senior centers, shopping malls, libraries or schools. Call 800-829-1040 or 888-227-7669 for tax counseling for elderly individuals.

Note that anyone who owes back taxes or past-due child support will have at least part of the rebate applied to those or other nontax federal liabilities.

It's estimated that 117 million low- and middle-income households, 20 million senior citizens receiving Social Security payments, and 250,000 disabled veterans will get a rebate check (CNNMoney.com Feb. 11). In general, most individuals will receive payments of up to $600 (up to $1,200 for joint filers). Each qualifying child increases the amount by $300.

For income thresholds and more information, visit irs.gov.


Printed Saturday, July 5, 2008

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