APPLETON, Wis. -- By now many of you have received a notice from the IRS telling you that you will be receiving a stimulus rebate check sometime this summer. That’s right; the government will be sending you money instead of the other way around. There are only a few catches.

First, to qualify for the rebate, you have to file a tax return. The amount you receive will depend on the information you report on your 2007 tax return. If you are not required to file a return, do it anyway. The earlier you file your return, the sooner your rebate check will arrive.

Second, you must have at least $3,000 in qualifying income. Qualifying income is defined as any combination of earned income (such as wages or taxable income from self-employment), nontaxable combat pay and certain benefits from Social Security, Veterans Affairs and Railroad Retirement.

Unfortunately, if you are eligible to be claimed as a dependent on another person’s return in 2007, you are not eligible for a rebate check. The good news is that if you are not eligible for a rebate check this summer, you may qualify for an additional tax credit when you file your 2008 return. This is because the rebate check is really an advance credit against your 2008 tax liability. For example, if your income was too high in 2007 to qualify for the rebate, you may be allowed to claim a tax credit (up to $600 or $1,200 for joint filers) if your 2008 income is lower. Also, if you were claimed as a dependent in 2007 and won’t be in 2008, you will get the credit on your 2008 tax return.

A common misconception about the rebate check is that the amount you receive this year will be taxable next year. This is not the case. The payment will not reduce your 2008 refund, nor become taxable when you file next year.

If you are curious about whether you qualify for the rebate, the IRS made available and online calculator on their website at www.irs.gov help you determine if you are eligible to receive an economic stimulus payment and if you are, how much you can expect. Anyone who has prepared a 2007 income tax return can use the calculator. It will ask you a series of questions, so you should have your 2007 tax returns handy. After answering the questions, the calculator will provide the projected dollar value of the payment.

Stimulus payments will be sent out in beginning May 2 based on the last two digits of the social security number used on the tax return. On a jointly filed return, the first social security number listed will determine the mail-out time. Because the IRS will use the social security number to determine when checks are mailed, taxpayers may receive their checks at different times than your neighbors or other family members. So sit back and relax, the check is in the mail.

Members of the National Association of Tax Professionals (NATP) work at offices that assist over 11 million taxpayers with tax preparation and planning. The average NATP member has been in the tax business for over 20 years and holds a tax/financial designation and/or a college degree. NATP has more than 18,600 members nationwide. Members include individual tax preparers, enrolled agents, certified public accountants, accountants, attorneys, and financial planners. Learn more at www.natptax.com.

NATP is a nonprofit professional association founded in 1979 to serve professionals working in all areas of tax practice through professional education, tax research, and products. The national headquarters, located in Appleton, WI, employs over 40 staff members.

You must be logged in to comment.