WORTHINGTON -- Plenty of rumors are circulating, and confusion comes into play as citizens wonder what they need to do to qualify for the Economic Stimulus Payment (ESP) rebate, but the answer is rather simple -- the vast majority of qualifying individuals simply need to file a 2007 tax return.
According to the Internal Revenue Service (IRS), the U.S. Department of the Treasury will begin sending economic stimulus payments to more than 130 million individuals in May. The payments will continue to be sent out through late spring and summer.
The IRS plans to notify people by mail about their eligibility, the amount of their ESP rebate and when they can expect to receive a check. The first general notice will explain the stimulus program. The second notice will confirm eligibility, payment amount and approximate timetable. Taxpayers should keep this notice to assist them when they prepare their 2008 tax return next year.
Who is eligible?
To be eligible, a person needs to have qualifying income of more than $3,000. This consists of salaries, wages, self-employment income, Social Security benefits, railroad retirement benefits, veteran's disability compensation and pension or survivor's benefits from the Department of Veteran's Affairs. If a person's income is more than $75,000 -- $150,000 if they file jointly -- the eligibility for the rebate phases out incrementally.
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Recipients can expect to receive a rebate equal to the amount of tax on their 2007 return, with a maximum of $600 and a minimum of $300. For those who file jointly, the maximum is $1,200 and the minimum $600. Taxpayers will get an additional $300 rebate for each eligible child -- one who has lived with the taxpayer for more than half of 2007, who is younger than the age of 17 and who did not provide more than half of their own support during 2007.
Myths debunked
The ESP will not reduce or increase the amount owed when a 2008 return is filed and is not taxable. The IRS states direct deposit is the best way to receive payment, so even if a person isn't due a refund on their 2007 tax return, filling out the bank routing information will allow the ESP to be direct deposited.
One myth circulating is that taxpayers will be contacted by phone or e-mail about the rebate.
"Watch for scams," the IRS states.
Some people who use needs-based benefits programs such as food stamps have wondered if the ESP rebate will affect their program details, but the IRS says it will not have any effect on their eligibility.
Common questions
Darcy Doeden, who answers calls for the Minnesota River Area Agency on Aging Senior Linkage Line in Slayton, said the most common questions from seniors about the rebate are from people who normally are not required to file a tax return.
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"A lot of them are just wondering if they are eligible," Doeden said. "Basically, what we're getting is people wanting to know what they need to do to get (the rebate)."
Many low-income social security recipients are not required to file normally and have not looked at a 1040A form in years, but Doeden said the process is quite easy and the Linkage Line staff has been able to walk many people through the process over the phone.
"It really doesn't take much," Doeden explained, "We are encouraging people to call the Linkage Line, and we can help them."
The Linkage Line staff has also referred people to AARP and assisted with 3-way calls.
"Most have heard about (the rebate), but haven't really looked for information," Doeden stated. "They just call and ask if there is someone that can help them fill out the form."
Seniors who need help can call the toll-free Linkage Line at (800) 333-2433.
The Tax Counseling for the Elderly (TCE) Program also provides free tax help to people ages 60 and older. To find an AARP Tax Aide site, call (888) 227-7669 or visit the AARP Web site at www.aarp.org .
Exclusions and limitations
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To be eligible for a stimulus payment, taxpayers must have a valid Social Security number. According to the IRS, those who file using an Individual Taxpayer Identification Number (ITIN), an Adoption Taxpayer Identification Number (ATIN) or any other identification number issued by the IRS are not eligible for the rebate. Both individuals listed on a married filing jointly return must have valid Social Security numbers to qualify.
Those who file form 1040NR, PR or SS are not eligible. These returns are generally filed by Nonresident Aliens, residents of Puerto Rico and residents of the U.S. Virgin Islands, Guam, American Samoa and the Commonwealth of the Northern Mariana Islands.
Also ineligible are individuals who can be claimed as dependents on someone else's return.
For more information
The IRS Web site, www.irs.gov , is the best source for additional information about the stimulus payments. According to an IRS stimulus fact sheet, the Web site will soon have an online tool that will allow taxpayers to calculate the amount of their payment and to check on the status of their specific payment.
