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February 2, 2009 - Howard Nemenoff
Welcome to the first of what will be many blogs written on the subject of personal income taxes. I want to express my thanks to the Pine Island Eagle for allowing me the opportunity to share information with you. I expect to publish articles on a weekly basis, hopefully on subjects that are interesting and affect your personal income tax situation. If you leave comments and/or questions, I will do my best to answer in a very timely fashion. If there are specific topics that you would like to hear about, please feel free to email me or leave suggestions in your comments. So, on to the first topic.

Two maxims seem very appropriate for the IRS, “Nothing is as easy as it seems” and “For every hard and fast rule, there is an exception.” This is very true for the Economic Stimulus Rebate, called the Recovery Rebate Credit (RRC). Most everyone who has been able to receive funds from the rebate is appreciative of it, but very few actually understand it. The RRC promised to pay individuals up to $600 each plus a $300 payment for qualified dependents. Most qualified recipients received their rebate after filing their 2007 taxes. The monies that were received are not considered income for you 2008 taxes. It seems very straight forward, but that’s not so true.

The RRC is meant to be a tax year 2008 credit. It was paid early based on the information reported on your 2007 return. If you had earned income of at least $3,000, or Social Security/Railroad Retirement Benefits or VA disability payments, or a combination of these over $3,000, or had a tax bill of at least $1.00, you were potentially qualified to earn a rebate of at least $300 and up to $600 (I say potentially because if you made too much money you were disqualified – phase-out’s began at $75,000 or $150,000 for Married Filing Jointly.) The amount you received was based upon your tax bill (Line 46 Form 1040). If your taxes were $0 - $300 you received $300. If your taxes were $301 - $599, you received whatever that amount was. If your taxes were $600+ you received $600. For Married Filing Jointly couples, if your taxes were $0 - $600 you received $600, $601 - $1199 you received that amount, $1200+ you received $1200. Additionally, you received an extra $300 for each qualifying child under the age of 17 before 1/1/2008 (I’ll get into how to define a qualifying child in a later posting). One result of the Rebate was that those tax payers, who normally did not have to file a return, had to file a return to receive the rebate.

So, what happens if you didn’t file last year or if you didn’t receive the maximum rebate, all is not lost. Since this is actually a 2008 credit, you can still receive it or if you didn't recieve the maximum, maybe you qualify for more. When you are completing your 2008 tax return, you should calculate how much of a rebate you qualify for. To do this, you need to look at your Earned Income, Social Security, Veterans Payments, Adjusted Gross Income, and your Income Tax. If a combination of Earned Income, Social Security, and Veterans Payments are greater than $3,000, you are eligible. If your Income Tax is greater than $0, you are eligible. The rules are the same as mentioned above, but now it applies to your 2008 tax return.

Some possible scenarios that would result in an additional payment include:

A newborn in 2008 could create a $300 RRC payment.

A person (or couple) who made too much money in 2007, but less in 2008 may now qualify for the RRC.

A person who was a dependent in 2007 but is not one in 2008 may now qualify.

A person (or couple) who did not meet the minimum requirements in 2007, but does in 2008 may now qualify

A person who was eligible for the rebate but failed to file a 2007 return by October 15, 2008 and meets the qualifications for 2008, may qualify.

A person(s) who did not receive the maximum credit in 2007, got married and in 2008 their joint income qualifies them for more, would received the extra monies.

Obviously, there are many scenarios. So, as mentioned above, you should figure out how much your payment should be, based on your 2008 return and compare it to what you were eligible for based on your 2007 return. If it is higher in 2008, claim the refund (it will be claimed on line 9 on the 1040ez, line 42 on the 1040a, or line 70 on the 1040). Of course, you must have the correct amount for how much you actually received last year. The best way to confirm the amount is at the IRS website. Go to

You will need your Social Security Number, your filing status (single, married filing jointly, etc.) and the number of exemptions claimed. The website will then tell you how much you received. Keep in mind that if the IRS took the rebate because of a previous tax debt, other government debt, child support debt, etc., the rebate is still considered to have been paid.

Make sure that you get the correct information . If it is not correct, the IRS may delay your refund. The IRS is experiencing difficulties with many tax payers filing incorrect rebate requests. Of course, one way to get it right is to have your return prepared by a qualified professional.


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